Canada’s Temporary Foreign Worker Program Gets An Overhaul

Citizenship and Immigration Canada (CIC) and the Ministry of Economic and Social Development Canada (ESDC) announced last month (June 20, 2014) that there would be significant changes on the Temporary Foreign Worker Program (TFW), a major reform that will affect employers under the said program. Below is a summary of all the things covered by this reform:
Labour Market Impact Assessment Program    
(1) The Labour Market Opinion (LMO) will be replaced by the New Labour Market Information Assessment (LMIA)
The existing LMO guidelines and requirements will still apply. However, the LMIA will make some changes and will have new requirements for employers under the program.
∎ Before employers can accept temporary foreign workers for a certain position, they will now be required to have a list indicating the number of Canadians that applied for the said position, the number that qualified for interview, and why these Canadians have not been hired.

∎ LMIA officers will be given access to the records of applicants who applied for the position being advertised by the employer. This will be via the Canada Job Bank (CJB), which will soon have a job matching service that will allow Canadian applicants to apply directly to CJB. This will give the latter an idea as to the number of Canadian applicants, their qualifications, and their skills (to monitor how much applicants suit the job).

∎ ESDC will already have access to Employment Insurance (EI) data in order to determine whether an employer is hiring temporary foreign workers while there are unemployed qualified Canadians in the area or if they are hiring TFWs after laying off Canadian workers. Access to EI is also aimed at helping unemployed Canadian workers find matching jobs.

∎ LMIA will be publishing a quarterly list of employers with positive LMIA rating. The goal is to ensure that the employers will first look for Canadian workers before considering TFWs.
(2) New LMIA Application Fee
Employers under the LMO were required to pay $275 for every TFW position requested. Under the LMIA, the fee will now be $1000, non-refundable in case an employer receives a negative LMIA rating or withdraws the request. If the employer requests for reconsideration after a negative LMIA, he will need to reapply and pay another $1000 fee.
Starting 2015, employers will also be asked to pay an additional $100 as privilege fee, with the total payment amounting to around $1100 for every TFW position requested.
(3) Guaranteed 10-Day Processing For Certain Occupations
Some occupations will now be processed for as fast as 10 business days. These include: occupations with the highest demand, occupations with the highest salary, and short-term occupations requiring applicants to work for only 120 days or shorter.
(4) Dividing LMIAs into High-Wage and Low-Wage Positions
Under the LMO, occupations were classified as low-skilled or high-skilled (based on the National Occupational Classification). This will be replaced by a low wage-high wage classification under the LMIA. The basis for the classification will be the median wage for a given province or territory. Those above the median will be high-wage while those below will be low-wage. Below is the median wage (hourly) for each province/territory:

Province/Territory Wage ($/hr)
Alberta $24.23
British Columbia $21.79
Manitoba $19.00
New Brunswick $17.79
Newfoundland and Labrador $20.19
Northwest Territories $32.53
Nova Scotia $18.00
Nunavut $29.96
Ontario $21.00
Prince Edward Island $17.26
Quebec $20.00
Saskatchewan $21.63
Yukon $27.93

This new policy will not affect the current wage for the different occupations but will affect processing of applications based on the wage status of the said application.
(5) Limit on Low-Wage TFWs for Individual Companies
Employers that have 10 or more employees and are applying for a new LMIA will be subject to a cap of 10% low-wage TFWs in their workforce. Employers will be given a transition period; this will not be implemented all at once but will be phased in during the next couple of years.
In case employers exceed the cap at present, the TFWs currently working for them will be allowed to work until the expiry of their work permit. Once the employers re-apply for LMIA, the initial limit for their low-skilled workforce will be 30% or their current percentage, whichever is lower. Starting July 1, 2015, the limit will be 20%, and then finally 10% beginning July 1, 2016.
Exception: Employers with fewer than 10 employees overall.
(6) Refusal of Low-Skilled LMIA Applications in Areas with High Unemployment in Some Occupations
There are cases when the ESDC may refuse to process an employer application for an LMIA in the Accommodation, Food Services, and Retail Trade sectors, especially if he meets all of the following:
∎ If the employer is applying for an LMIA in an economic region with over 6% unemployment (Statistics Canada)

∎ If the employer is applying for an LMIA in an occupation classified by the North American Industry Classification System as under the Accommodations & Food Service or Retail Sales sector

∎ If the employer is applying for an LMIA in any of these occupations:

• • Food Counter Attendants, Kitchen Helpers and Related Occupations
• • Light Duty Cleaners
• • Specialized Cleaners;
• • Janitors, Caretakers and Building Superintendents
• • Other Attendants in Accommodation and Travel
• • Cashiers
• • Grocery Clerks and Store Shelf Stockers
• • Security Guards and Related Occupations
• • Construction Trades Helpers and Labourers
• • Landscaping and Grounds Maintenance Labourers
(7) Shortening the Duration of Work Permits for Low-Wage Workers
At present, the work permit for low-wage workers are valid for two years; this will now be reduced to only one year. The cumulative duration by which low-wage workers can work in Canada will also be reduced (new duration still to be determined).
(8) Introduction of Transition Plans for High-Wage Positions
Employers who are planning to apply for LMIA in a high-wage occupation will now be required to show a Transition Plan that will detail their plans to prioritize the hiring and retention of Canadian and permanent citizens. The plan can include more active recruitment, high wages, and training.
Below are the detailed requirements for employers as part of the Transition Plan:
∎ General requirements: at least 3 activities aimed at recruiting, retaining, and training Canadians and permanent citizens.

∎ Underrepresented groups requirement: at least 1 activity with an organization that serves an underrepresented group (i.e. immigrant or aboriginal group) to determine whether there is someone who is qualified for a position. The activity must be separate from the general requirements.

∎ Permanent resident requirement: at least 1 activity designed to help a TFW transition to the Canadian way of life.
Employers will need to show the results of the mentioned activities when there are inspections or when they reapply for the LMIA in the said occupation.
Exemptions for employers:

∎ Hiring of TFWs for positions requiring unique skills (i.e. nuclear physicist)

∎ Hiring of TFWs for short term positions
• • up to 120 days (i.e. mechanic)
• • • • max of 2 years (i.e. project-based consultant)
Stronger Enforcement and Tougher Penalties

(Increasing the Number and Scope of Inspections & Imposing Monetary Fines For Employers who Break the Rules)
The ESDC will be more closely monitoring the employers who are hiring TFWs. The target is to have an annual inspection of 25% of the companies that hire TFWs. Furthermore, the ESDC will be authorized to:
• Hold on-site visits without prior notice
• Interview TFWs and employees
• Immediately investigate complaint of any possible instance of rule breaking
• Demand documents from employers to show proof that they comply with the new rules
• Compel banks and payroll companies for record access to determine whether the employers abide by the rules or not
Additionally, the Canada Border Services Agency (CBSA) will be strengthened so that it can investigate any complaint. Employers who lie in an LMIA application will be subject to the Immigration and Refugee Protection Act, which imposes a fine of up to $100,000 and imprisonment of up to 5 years (or both) to employers who misrepresent and withhold information concerning immigration issues. The names of employers who are fined will also be disclosed to the public.
International Mobility Programs (“IMP”)    
(1) IMP to Replace LMO-Exempt Work Permit Program
Right now, there are some TFWs who are allowed to apply for a work permit without LMO assessment – the so-called LMO-exempt TFWs. However, since LMIA will be replacing LMO, there will be some changes concerning TFWs who are exempted from LMO assessment. These changes are detailed below and will take effect starting summer next year.
(2) New Fee and Employer Compliance System
In the new system, employers who are hiring LMIA-exempt TFWs will be required to submit the job offer and other pertinent information to CIC. Unless the employers submit the necessary requirements, their prospective LMIA-exempt TFWs cannot get a work permit. This change will bring with it some parallel changes to Canada’s Immigration and Refugee Protection Regulations, after which more details regarding the changes will be released.
Upon the implementation of this system, a new work permit processing fee of $230 will also be in place.
(3) New Privilege Fee for Open Work Permit Applicants
Open work permit applicants will already be required to pay a privilege fee of $100, to be implemented together with the new system next year.
(4) Amending Provincial Annexes
Five provinces in Canada have annexes in their agreement with the government, which offer them certain LMIA exemptions. This will undergo some changes, with some exemptions to be removed. The affected provinces are: Alberta, British Columbia, Nova Scotia, Ontario, and Yukon.
(5) Restructuring of the International Experience Canada Program (IECP)
During the past years, there have been an increase in the number of foreign visitors entering Canada, but the number of Canadians going abroad does not match this number – thus creating an imbalance. This is the reason the IECP is being reviewed to ensure that the numbers will regain balance.
(6) Intra-Company Transfer Program – New Rules for Specialized Knowledge Applicants
Starting June 9, 2014, there has been a change in the program in that applicants are already required to show proof of proprietary knowledge and advanced expertise (instead of just one of the two). They will have to be paid the prevailing wage, with such things as transportation costs excluded from the computation.

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