Canada to Cut Temporary Foreign Workers by 65,000: New Measures Announced

In a significant move aimed at reshaping the landscape of Canada’s labor market, the Canadian government has announced plans to reduce the number of temporary foreign workers (TFWs) by 65,000 on 26th August, 2024.

This decision, which has far-reaching implications for employers and workers alike, is part of a broader strategy to address labor shortages while ensuring that Canadian citizens and permanent residents have greater access to available jobs.

low-wage temporary foreign workers


Details of the New Measures

The announced measures include a phased reduction in the number of temporary foreign workers allowed into Canada, with the goal of cutting 65,000 positions over the next few years.

The reduction will be implemented through tighter regulations on TFWP applications and a more rigorous assessment process to ensure that employers are making genuine efforts to recruit Canadians before turning to foreign labor.

The new measures will end low-wage temporary foreign workers in regions with unemployment rates of 6% or higher, reduce the percentage of employers’ workforces that can consist of low-wage temporary foreign workers to 10%, and limit the duration of these permits to one year instead of two, with exemptions for certain sectors such as agriculture, food processing, construction, and healthcare.

The Canadian government granted Quebec’s request to put the TFWP in Montreal on temporary hold on August 20. This action attempts to allay worries in the area about how the program would affect the local labor market.

Additionally, the government is set to introduce stricter penalties for employers who do not comply with the new rules. This includes increased fines and the possibility of being barred from accessing the TFWP in the future. The emphasis will be on ensuring that the use of temporary foreign labor is truly a last resort.

Background and Context

Canada has long relied on the Temporary Foreign Worker Program (TFWP) to fill gaps in the labor market, particularly in industries such as agriculture, hospitality, and construction, where domestic labor shortages are most acute. However, concerns have been growing about the reliance on temporary workers and the impact on the Canadian workforce.

The government’s recent decision is a response to these concerns, signaling a shift towards prioritizing the employment of Canadian citizens and permanent residents. By reducing the number of TFWs, the government aims to encourage employers to invest more in training and hiring domestic workers, thereby strengthening the national workforce.

Low-wage Temporary Foreign Workers (TFWs) will now be limited to one-year contracts, reduced from the previous two years. Prime Minister Justin Trudeau emphasized the need for Canadian businesses to focus on training and technology investments rather than increasing reliance on low-cost foreign labor. He stated, “It’s not fair to Canadians struggling to find a good job, and it’s not fair to those temporary foreign workers, some of whom are being mistreated and exploited.”

Conservative MP Melissa Lantsman, the party’s deputy leader, criticized the government’s decision to reduce TFWs, viewing it as a reversal of policies implemented by former Immigration Minister Sean Fraser. Lantsman argued that Fraser’s policies had damaged the immigration system, leaving him now responsible for addressing housing issues.

Mike Moffatt, the senior director of policy at the Smart Prosperity Institute, commended Ottawa’s move to cut the number of low-wage TFWs, calling it “a great first step,” but noted that more needs to be done. He also suggested that the high-wage component of the program should be adjusted, as TFWs have increasingly filled entry-level office positions that could be taken by Canadian workers.

However, the government’s decision to tighten the TFW program has faced criticism from migrant rights groups. Syed Hussan, the executive director of the Migrant Workers Alliance for Change, argued that issues like high unemployment, low wages, and unaffordable housing are not caused by immigrants and migrants but by employer exploitation and policy failures. He emphasized that “Migrants build communities, and they deserve equal rights and respect, not scapegoating,” adding that high immigrant unemployment rates are often driven by “racism and discrimination” rather than the presence of foreign workers.

Impact on Employers and Workers

For employers, particularly those in sectors heavily reliant on TFWs, this policy shift may present challenges. They will need to adapt to the new regulations by increasing recruitment efforts within Canada and possibly raising wages to attract domestic workers. This could lead to higher operational costs, especially in industries where profit margins are already tight.

However, this action may result in greater job prospects for Canadian citizens and permanent residents, especially in areas and sectors of the economy where foreign workers have historically held positions. Long-term advantages from the government’s emphasis on upskilling and educating the domestic labor force may include a more flexible and resilient labor market.

What to Expect

According to Trudeau, the government is also examining the immigration pathways for permanent residents. “We’re keeping an eye on a number of avenues to make sure Canada continues to be a welcoming country for immigration and responsibly integrates newcomers,” he said.

Later this fall, the government intends to unveil a more detailed immigration strategy. The decision was made in response to Trudeau’s dropping polling numbers ahead of the next election, which has many Canadians worried about the volume of immigrants coming to their nation.


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