Employment and Social Development Canada (ESDC) recently announced significant changes to the Temporary Foreign Worker Program, with a focus on the higher-wage stream. Employers must now offer pay that are at least 20% higher than the median rate for a given job and location starting November 8, 2024.
This bill seeks to enhance the pay requirement for foreign workers in the high-wage stream, aligning it more closely with regional employment markets while also maintaining domestic labour norms.
Authorities predict that this change may affect up to 34,000 workers in Canada, resulting in an hourly salary rise of $5-$8 CAD for those who remain in the high-paid stream (depending on the field of work).
Overview of the TFWP High-Wage Stream and Recent Adjustments
The Temporary Foreign Worker Program was established to assist Canadian businesses in filling temporary labour shortages with skilled workers from abroad. It has several streams, one of which is the high-wage stream, which is intended to fill positions with earnings higher than the provincial or territory median salary.
Under this stream, firms must meet severe wage criteria, which have been further amended by the ESDC to ensure that earnings are comparable with Canadian workers in similar roles.
In addition to the stated changes, the Minister indicated that beginning October 28th, 2024, employers in the TFWP will no longer be allowed to use attestations from professional licensed accountants and/or lawyers to confirm the validity of their business.
Key Changes to Wage Requirements
To qualify for the high-wage stream of the TFWP previously, candidates had to be paid either the median wage for their job and location or a rate matching that of current employees in similar roles at the same company.
Starting November 8, 2024, wages must now be at least 20% above the regional median wage or align with comparable wages at the same employer, whichever is higher. Only base wages count toward eligibility, excluding additional earnings like tips, bonuses, and commissions.
The TFWP has introduced a six-month pause on processing Labor Market Impact Assessments (LMIAs) for the low-wage stream in urban areas with an unemployment rate of 6% or more. Additionally, employers can only hire up to 10% of their staff through the TFWP, and the maximum employment period for workers in the low-wage stream has been shortened from two years to one.
“…By raising the threshold for high-wage stream positions, we are supporting wage growth for Canadians,” said Minister of Employment, Workforce, Development and Official Languages, Randy Boissonnault.
How to Find the Median Wage for Your Position in Your Area
To find the median wage for a specific occupation in your area on Job Bank:
- Visit the “Compare wages” section on Job Bank.
- In the “Job search” field, enter the job title or the National Occupation Classification (NOC) 2021 code that best aligns with the duties and requirements of the position you’re researching. Make sure the job description accurately reflects your role to choose the correct occupation title.
- The median hourly wage will display in the middle column, organized by location or community. If “n/a” appears for your area, look at the provincial or territorial wage, and if that’s unavailable, refer to the national wage for the role.
- If the position requires additional skills or experience beyond those described in the NOC, the wage offered should reflect these additional requirements.
*The NOC is Canada’s system for classifying occupations, defined by the training, education, experience, and responsibilities (TEER) required for each role.
Canada’s Changes to the Temporary Foreign Worker Program: Encouraging Local Hiring and Managing Immigration Levels
Canada has introduced several changes to the Temporary Foreign Worker Program (TFWP) this year, primarily aimed at encouraging Canadian businesses to prioritize hiring local workers. The recent announcement is expected to shift more jobs into the stricter regulations of the low-wage stream within the TFWP. This adjustment mandates that employers provide enhanced support for workers in areas such as housing and transportation. The government believes that these measures will create better job conditions and promote the hiring of Canadian citizens and residents, thereby strengthening the domestic workforce.
These modifications coincide with Canada’s efforts to limit the number of temporary residents—those on work or study permits—to 5% of the country’s overall population. This initiative responds to rising concerns about housing availability and the general cost of living in Canada. To achieve this goal, the government has enacted several additional measures this year, including imposing a cap on study permits for new international students, establishing specific field of study and language requirements for Post-Graduation Work Permits (PGWPs), adjusting eligibility criteria for some Spousal Open Work Permits (SOWPs), and introducing historical temporary resident target levels within the annual Immigration Levels Plan. Collectively, these changes reflect Canada’s strategic approach to manage immigration while ensuring that local labour market needs are met.
Impacts on Employers and the Canadian Workforce
This wage adjustment has mixed implications for employers. For one, it may mean higher costs for businesses reliant on the high-wage stream. While this could lead to budget adjustments, the increased wage rates also offer potential benefits, including higher job satisfaction and retention rates among temporary foreign workers. Companies adhering to these fair-wage standards are likely to attract and retain skilled foreign talent more effectively.
From the standpoint of the Canadian workforce, the updated wage regulations are meant to avoid wage suppression and ensure that local workers are neither undervalued or undercut by international labour. While wages rise to meet regional industry standards, domestic employees’ income expectations become more steady, even while international workers help alleviate labour shortages in vital industries.
In summary, ESDC’s rise in pay criteria for the TFWP’s high-wage stream demonstrates Canada’s commitment to fair labour standards and protecting both domestic and foreign workers. This reform may necessitate modifications for employers, but it represents a step toward a more balanced and equitable labour market. For firms looking to hire in the TFWP high-pay stream, these changes stress the necessity of achieving wage compliance criteria and fostering competitive employment standards.
