Demand for temporary foreign workers continues to rise – what effect will the new restrictions have on hiring?
Demand for temporary foreign workers across Canada continued to rise last year, and experts don’t expect that to stop anytime soon — despite restrictions to the program introduced in September.
Third-quarter numbers from 2024, the most recent data available, show Canada approved 50,971 temporary foreign worker (TFW) positions July through September, up from 50,059 during the same period in 2023, according to figures from Employment and Social Development Canada.continues
That number marks a 229 per cent spike from 15,507 approvals from the third quarter of 2021, underscoring the program’s significant expansion in recent years.
“We likely will not see a slowdown of (TFW) approvals until the second quarter of 2025 — but not before that,” said immigration consultant Kanwar Sierah, who also represents migrant workers in their bid to recover tens of thousands of dollars in unpaid wages.
Use of the TFW program by businesses has skyrocketed in recent years in low-wage sectors — including construction and hospitality — sparking criticism of worker exploitation as the unemployment rate climbs across the country.
New rules to the program that took effect in September aim to encourage employers to hire more Canadian workers and combat fraud and mistreatment of migrant workers.
Applications for low-wage workers in regions with high unemployment will be refused in many sectors, with employers limited to hiring a maximum of 10 per cent of their workforce through the program.
The low-wage worker employment period also drops to one year from two.
Workers in agriculture, health care, construction and food security — the sectors hiring the most TFWs — will be exempt from program changes.
Labour experts say the restrictions won’t immediately reduce TFW applications, as the changes will need time to work their way through the system.
Employment and Social Development Canada (ESDC) did not respond to inquiries on whether the government expects to see a decrease in approvals.
Catherine Connelly, a professor at McMaster University’s DeGroote School of Business, and an expert on the temporary foreign worker program, also doesn’t expect to see any big changes in the near future.
“I don’t think these changes will make a big difference,” she said. Much of the growth in the TFW program has been through the low-wage stream, and some sectors under this category are “not really affected by these changes.”
To hire a temporary foreign worker, an employer must submit a labour market impact assessment (LMIA) to ESDC for approval, demonstrating a need for a foreign worker to fill a position for which no Canadian citizen or permanent resident is available.
The program has come under fire for allegations of mistreatment of temporary foreign workers amid surging demand, with employers given the green light to hire almost 240,000 temporary foreign workers in 2023, according ESDC — more than double the number in 2018.
A Toronto Star investigation into the program’s application process found that beginning in January 2022, ESDC directed staff to implement “streamlining measures” when evaluating the legitimacy of applications by employers who want to hire temporary foreign workers.
Routine checks meant to ensure the system is not abused by unscrupulous employers were suspended in an effort to process applications faster. These checks include contacting employers to confirm they actually applied to hire a worker as well as verifying that lawyers and consultants applying on behalf of employers are in good standing with their regulatory bodies.
The federal government in 2022 eased restrictions to the TFW program when Canada had nearly one million job vacancies across the country and the unemployment rate dipped to a record-low of 4.9 per cent.
But Canada’s unemployment rate rose to 6.8 per cent in November, the highest since January 2017, excluding the years of the pandemic.
Connelly says the continued increase in the demand for TFWs “is concerning.”
The unemployment rate indicates “there should be more local workers available for these companies to hire,” Connelly said. “But based on this data, we can see they’re still turning to the temporary foreign worker program.”
Jim Stanford, economist and director of the think tank Centre for Future Work, said that while we can expect the new restrictions to have an impact on the flow of number of TFW applications, it’ll take some time for the number of existing temporary foreign workers to decrease.
“I expect that by a year from now you’ll see a difference” in the number of migrant workers in Canada, Stanford said.
Critics and advocates have repeatedly called for temporary foreign workers to have permanent resident status or, at minimum, open work permits, which would allow them to leave abusive employers without fear of losing their status in the country.
“There are too many employers who really like the idea of a closed work permit and hiring workers who can’t easily quit,” Connelly said. “If the government wants to have this program, it needs to be tightly managed in order to protect workers … from wage theft, unsafe work environments, harassment and exploitation.”
With files from The Canadian Press.
This article was first reported by The Star
