Canada: Temporary Resident Numbers to be Revisited Through New Measures

March 22, 2024

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Country / Territory

At a Glance

  • In line with the government’s goal to reduce the temporary resident population in Canada from 6.2% to 5% over the next three years, the government has now announced that certain temporary relaxed policies under the Temporary Foreign Worker Program will not be renewed and will end earlier than planned. As a result, effective May 1, 2024:
    • Labour Market Impact Assessments will be valid for six months, down from the current 12-month validity; and
    • The cap for low-wage foreign workers employed by employers in certain sectors will decrease from 30% to 20%.
  • Employers will need to better manage their labour needs and may have less flexibility to hire foreign nationals instead of Canadians.

The situation

The government of Canada will be instituting a “soft cap” on temporary residents in Canada, in line with the government’s goal to reduce the temporary resident population in Canada from 6.2% to 5% over the next three years (including international students and foreign workers) due to housing affordability and other infrastructure pressures.

With this aim, the government has now announced that certain temporary relaxed policies under the Temporary Foreign Worker Program (TFWP) will not be renewed and will end earlier than planned.

The below changes will be effective on May 1, 2024:

CHANGE DETAILS IMPACT

Shorter validity for Labour Market Impact Assessments (LMIA)

 

  • LMIAs will be valid for six months, down from the current 12-month validity. Prior to COVID-19, LMIAs were valid for six months; and under subsequent temporary policies, the validity increased to 18 months in 2022; and decreased to 12 months in 2023 in response to changing labour market conditions.
  • The LMIA is a document that employers in Canada must obtain before certain foreign nationals can apply for a work permit through the TFWP. It proves that employers have taken steps to recruit Canadians and that employing the foreign national in Canada would be beneficial to the labour market.  

 
  • Employers will need to better manage their labour needs and may have less flexibility to hire foreign nationals instead of Canadians.
  • Additionally, the government announced that employers will need to explore every option to consider Canadian citizens, permanent residents and other residents first for job opportunities, before applying for an LMIA — including recruiting asylum seekers with valid work permits in Canada.

Cap decrease for low-wage employers

 

Employers in sectors with demonstrated labour shortages in low-wage positions (including food, wood product and furniture manufacturing, and accommodation and food services) will be allowed to hire up to 20% of their workforce through the TFWP for employers, instead of the current 30% cap. Exceptions will apply to the construction and healthcare sectors. 

 
  • Employers in sectors with low-wage positions may need to fill more vacancies with Canadian citizens, permanent residents or asylum seekers in Canada holding work permits.
  • The exception for construction and healthcare sectors will address current job vacancies across these areas, which are still experiencing significant labour shortages. 
  • Background for the Temporary Foreign Worker Program. In 2022, the government of Canada implemented improvements to the TFWP to address labour shortages throughout the country (following a historic job vacancy peak in Q3 2021, with much of the demand in low-wage occupations). These improvements included longer validity for LMIAs and relaxed hiring and application policies for low-wage occupations, among others. Throughout 2023, the government extended improvements to the program twice but announced it would continue to review the policies as the labour market and economic conditions evolved in Canada and to ensure there was no displacement or negative effects on Canadian workers or working conditions. Upon the second extension, these policies were set to end on August 30, 2024.
  • Reason for forthcoming adjustments. Due to the pressure that immigration growth is presenting in areas such as housing prices, health care, and infrastructure, and other labor market condition considerations, the government is adjusting the TFWP to ensure the program continues to only be used in cases where there are no workers in Canada that can fill necessary roles, which will help decrease the number of temporary workers in Canada.

While Canada continues to promote policies to encourage immigration into Canada (as it continues to face an aging population and critical labour shortages in key sectors), the government is also taking action to recalibrate and stabilize immigration levels to balance economic growth with the pressure that immigration growth is presenting in areas such as housing prices, health care, and infrastructure, and to protect the local labour market.

The government will continue to review the relevant policies as the labour market and economic conditions evolve in Canada to ensure there is no displacement or negative effects on Canadian workers or working conditions. Additional policy changes can be expected over the next year. We will report on relevant developments.

This alert is for informational purposes only. If you have any questions, please contact the global immigration professional with whom you work at Fragomen or send an email to [email protected].

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