Businesses face new limits on temporary foreign worker program

Starting today, employers in Canada will face new restrictions on their hiring of low-wage temporary foreign workers — a policy shift the federal government says will push businesses to make a greater effort to hire workers already in Canada.

Under the new restrictions:

• Employers will be limited to hiring 10 per cent of their workforce through the program’s low-wage stream.
• Employers will be unable to hire through this program if they are in census metropolitan areas with unemployment rates of more than six per cent. 
• Contracts for low-wage positions will be generally be limited to one year.

There are some exceptions to the above rules, such as for employers in health care and construction.

The federal government is aiming to rein in the temporary foreign worker program after it loosened hiring rules in the wake of the COVID-19 pandemic. In recent years, the low-wage stream has seen particular growth, with the number of positions approved through this stream nearly quadrupling from 21,394 in 2018 to 83,654 in 2023.

The program’s low-wage stream is for positions whose wages are below the territorial or provincial median hourly wage.

“I think these changes make sense,” said Christopher Worswick, professor and chair of the economics department at Carleton University. 

There’s concern among academic economists that the temporary foreign worker program suppresses wage growth. Worswick said the program gives businesses the option of looking abroad for temporary staff instead of raising wages to attract local employees. 

While Worswick said he agrees with these new restrictions, he thinks Ottawa could go further.

“I actually think we should probably be phasing this program out as soon as possible.” 

Instead, he said, the government should prioritize high-skilled, permanent immigration, and let businesses find staff from a pool of citizens and immigrants. 

Some business owners say they’ve tried and failed to find local workers before turning to the temporary foreign worker program, and that the new restrictions could put them out of business. 

Michael Aitken, who owns the restaurant El Mariachi Tacos and Churros in Mississauga, Ont,. says he relies on the program to find workers with specialized cooking skills that are in short supply in Canada.

“My reaction is a little bit of fear of what will become of El Mariachi,” said Aitken, who through the program employs 14 cooks, two bartenders and a food service supervisor from Mexico.

“Without the cooks that we have, I think our doors will be closed.”

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