Changes to Canada’s temporary foreign worker regime to address labour shortages

60 per cent of Canada’s Temporary Foreign Workers are in the agricultural industry. Photo: RWN

The information below is provided by Gowling WLG through Lexology.

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Canada has made a number of changes to its work permit rules that are designed to address labour shortages. The changes will help Canadian employers meet human resources needs and will provide more flexibility to employers in accessing the Temporary Foreign Worker Program (TFWP). The changes will also assist some foreign workers who have been negatively affected by the impact of COVID-19 on Canada’s immigration system, and alleviate some of the administrative burden on the TFWP by reducing the number of renewal requests.

The announcements are available online at: Backgrounder on TFWP Changes and New Measures to Address Canada’s Labour Shortage.

Further details are set out below.

Changes to the TFWP

1. Longer LMIA validity

The validity period of a Labour Market Impact Assessment (LMIA) will be temporarily increased from 9 to 18 months.

To use the TFWP, an employer must first obtain an LMIA from ESDC/Service Canada. An LMIA must be used to apply for a work permit within the LMIA’s validity period.

This change gives employers more flexibility and a longer time period to tap into foreign worker talent. For example, employers with large scale needs for foreign workers who opt to obtain unnamed LMIAs will be able to recruit foreign workers to fill the unnamed LMIA spots over an 18-month period, rather than only 9 months.

2. Longer employment duration under Global Talent Stream (GTS) and High-Wage Stream LMIAs

The maximum length of work permits available under GTS LMIAs (tech workers) or High-Wage Stream LMIAs has been increased from two years to three years.

This change recognizes that due to delays in permanent residency (PR) processing timelines, many foreign workers under those LMIA streams can no longer transition to PR status within two years. A three-year work permit will allow more to do so, without having to apply for a renewal of the work permit before getting PR status.

However, employers should note that if a three-year GTS LMIA is requested, then the employer will need to agree to provide Labour Market Benefits Plan (LMBP) commitments for three years.

3. More flexibility for Low-Wage Stream LMIAs

Rules for Low-Wage Stream LMIAs have been relaxed in a number of ways. This will help sectors such as agriculture, food production, tourism, food services, retail and manufacturing address labour shortages.

The 10 per cent cap on the proportion of low-wage foreign workers that can be hired at a location has been increased to 20 per cent. And for one year, to 30 per cent for employers in Food Manufacturing, Wood Product Manufacturing, Furniture and Related Product Manufacturing, Accommodation and Food Services, Construction, Hospitals and Nursing and Residential Care Facilities.

The Seasonal Industry Cap Exemption is now permanent and will allow seasonal employers to hire Low-Wage stream foreign workers for up to 270 days without needing to consider the cap.

ESDC will no longer refuse to process Low-Wage stream LMIAs for Accommodation and Food Service or Retail Trade employers located in a region with an unemployment rate of six per cent or higher.

Other measures

Immigration, Refugee and Citizenship Canada (IRCC) has also announced some other measures to assist foreign workers.

1. Special PGWP extension policy

A special policy will allow some Post-Graduate Work Permit (PGWP) holders with expiring temporary status to stay in Canada longer. PGWP holders who are in Canada and have a PGWP expiring between January and December 2022 will qualify for an additional open work permit of up to 18 months. Details on eligibility and how to apply have not yet been announced.

This policy will provide more time for eligible PGWP holders to gain Canadian work experience and to transition to PR status. This is beneficial for employers who employ PGWP holders, as those workers may be able to extend their open work permit. Otherwise, employers would have to try to find an employer-specific work permit category, such as obtaining an LMIA, to try to maintain the employment of a worker who holds an expiring PGWP.

2. Extension of policy allowing visitors to apply for work permits

The public policy allowing some visitors in Canada to apply for a work permit from within Canada has been extended to Feb. 28, 2023. This policy was brought in during COVID-19. The applicant would have to be eligible for an employer-specific work permit category.

In limited circumstances, the applicant may be able to obtain interim permission to work while waiting for the work permit application to be processed. If the foreign national is in possession of interim permission, they may continue working until a final decision is made even if they have left and returned to Canada.

See Public Policy allowing Visitors to Apply for Work Permits for further details.

Conclusion

The changes are beneficial to employers and to temporary foreign workers. Employers are being given more flexibility and greater access to foreign talent and some workers will have more time to transition to PR status while being able to work in Canada.

However, it remains to be seen what the effect will be on overall processing times and on the administrative burden put on government resources. Furthermore, obtaining a High Wage or Low Wage LMIA may not help some employers actually get candidates working on the ground in Canada in a timely manner, as the work permit process may still take a long time depending on the citizenship or country of residence of the foreign worker.

Finally, employers should be aware that IRCC intends to bring in further measures to protect foreign workers, and therefore we expect that there will be further changes focusing on employer compliance.