Effective this year, Canadian employers must meet prevailing wage requirements for Labour Market Impact Assessments when hiring through the Temporary Foreign Worker Program.
“For LMIA applications submitted as of Jan. 1, 2024, employers are required to update the wages of TFWs to reflect changes to the prevailing wage, at the start of and throughout their period of employment, to comply with Temporary Foreign Worker Program requirements,” states Immigration, Refugees and Citizenship Canada.
Job Bank wages are updated every year in the fall. Last year’s update took place on Nov. 29, 2023.
“This means that after Jan. 1, 2024, if an employer applies for and obtains an LMIA approval for a specific wage rate, they may be required to increase an employee’s wage rate the following November/December of that year, and/or the following years, if the prevailing wage rate increases to a value that is above what the employer was approved to pay on the LMIA approval,” law firm Miller Thomson LLP wrote in a Lexology blog post.
Other changes announced by Employment and Social Development Canada regarding the TFWP include:
- The LMIA approval validity period will be reduced to 12 months from the previous 18-month validity period;
- Employers will continue to be allowed to hire up to 30% of their workforce through the TFWP in sectors with demonstrated labor shortages in low-wage positions (including food, wood product and furniture manufacturing, accommodation and food services, construction, hospitals and nursing and residential care facilities) until Aug. 30, 2024; and
- Employers can hire workers for low-wage positions (those under the provincial or territorial minimum wage) for up to two years until Aug. 30, 2024.
Due to ongoing labor shortages across the country, Canada is eager to attract foreign workers and boost its economy, Canada Immigration News reported.
The Canadian Federation of Independent Business has pegged the loss to Canadian businesses to a lack of workers at up to C$38 billion in contracts and sales, according to Canada Immigration News. In its latest report, Small Businesses in Canada Hit Hard: The Big Financial Toll of Labour Shortages, the 97,000-strong Canadian Federation of Independent Business, representing small and midsize businesses in Canada, claims a lack of workers is hitting business hard — and warns the situation could get even worse in the future.
“Challenging demographics and a failure to truly rise to the moment from governments also mean the current situation could deteriorate further in the future,” the CFIB report states.
TFWs Tend to Work Low-Paying Jobs
That said, research released in December by Statistics Canada finds TFWs are increasingly working in low-paying jobs. In 2019, 45% of TFWs worked in three sectors: accommodation and food services; retail trade; and administrative and support, waste management, and remediation services. This is a significant rise from 33% in 2010.
“The increased concentration of TFWs in these three low-paying sectors can be attributed to the large expansion of individuals holding IMP work permits and study permits and the growing trend of study permit holders seeking employment in these sectors,” according to the study “Foreign workers in Canada: Distribution of paid employment by industry.”
Overall, TFWs accounted for 4.3% of all T4 earners in Canada in 2019, up from 2.2% in 2010.
In addition to the above three sectors, a substantial number of TFWs were also employed in agriculture, forestry, fishing and hunting; manufacturing; professional, scientific and technical services; and educational services. Together, these industries accounted for approximately 28% of the total TFW workforce in 2020, down from 31% in 2010.