Contingent workforce programs operating in Canada should prepared for more challenges in securing talent as the country works to reduce the cap on temporary workers allowed through its Temporary Foreign Worker Program. 

Canada in 2022 enacted a Temporary Foreign Worker Program Workforce Solutions Road Map to address tight labor market conditions brought on by the pandemic and to ensure the TFWP met the country’s growing labor market needs. However, recent years have seen a sharp increase in the volume of temporary residents — from a rise in international students, to more foreign workers filling job vacancies, to those fleeing wars and natural disasters, said Honorable Marc Miller, minister of Immigration, Refugees and Citizenship, at a recent press conference. 

In 2023 alone, more than 800.000 non-permanent residents were added to Canada’s population, the vast majority of whom were temporary workers, according to Statistics Canada. It was the second straight year that temporary immigration drove population growth and the third year in a row with a net increase of NPRs.

The federal government plans to decrease the admittance of temporary residents from 6.2% to 5% by 2027. As part of this effort, the TFWP will undergo major revisions effective May 1.  

The cap will be cut down to 20% for most sectors; however, the construction and healthcare sectors will continue to be allowed to hire up to 30% of their workers through the program. Seasonal industries, such as agriculture, fishing and tourism, are exempted from a cap during their peak seasons. 

Labour Market Impact Assessments — which employers that want to hire a foreign worker through the TFWP must apply for — will only apply for six months, half of the current one-year time limit. The government will also place more stringent requirements on employers to prove they’ve exhausted local options, including hiring asylum seekers with valid work permits. 

“The temporary foreign worker program is a last resort,” CBC News quoted Employment Minister Randy Boissonnault as saying at the press conference. “We expect businesses and business owners to exhaust every option and work to prioritize workers here in Canada before applying for temporary foreign workers.” 

Miller said that Canada’s labor market is recovering — or has already recovered — from the pandemic, and employers are experiencing less difficulty filling jobs.  

“Canada, by all accounts, has done a significantly good job compared to its peers in making the workplace and workforce younger,” he said. “Many temporary foreign workers are filling job vacancies in critical industries like construction workers needed to build new homes, early childhood educators to teach our kids and healthcare professionals to treat patients. However, changes are needed to make the system more efficient and sustainable.” 

“Temporary residents” is an umbrella term for a large number of streams and programs under IRCC management, chiefly broken down into a few main categories: 

  • 42% international students
  • 9% temporary foreign workers under the Temporary Foreign Workers Program 
  • 44% temporary workers under the International Mobility Program, which includes further specifics such as those with post-graduate work permits, spousal work permits for students or workers, those temporarily visiting Canada under youth mobility agreements, workers arriving in Canada through intercompany transfers or arrivals through special humanitarian pathways, including those fleeing Ukraine.  

Employment in Canada is now 1.2 million jobs above its pre-Covid-19 February 2020 level, and the unemployment rate was at 5.8% as of February 2024.  

Canada has more than recovered all the jobs lost during Covid-19 and is now at 138% of that number, Miller said, and programs that welcome temporary residents must “reflect the needs and changing demands of the labor market.” 

To that end, Miller directed his department to conduct a review of existing programs that bring in temporary workers and to work to “better align streams with labor market needs and weed out abuses in the system.” 

He cited the need for robust pathways to permanent residence for those who wish to make Canada their home in the long term and “avoid the pitfalls of an economy built solely on temporary workers.”