Small business owners face new restrictions on hiring low-wage temporary foreign workers, part of a federal government effort to ensure Canadians have the first crack at available jobs. As of November 4, 2024, the Temporary Foreign Worker Program (TFWP) has lowered the maximum proportion of low-wage temporary foreign workers that employers can hire.
Previously, employers in seven sectors with high vacancy rates could hire up to 30% of their workforce through the TFWP. That cap has been lowered to 20% for all sectors and will be further reduced to 10% by 2026.
Key Changes to the TFW Program:
- Cap on Low-Wage Workers: A 10% cap has been imposed on the number of low-wage temporary foreign workers that employers can hire. This cap applies nationwide, including Quebec under the Traitement Simplifié (Simplified Processing) program. Certain sectors deemed critical, such as healthcare and construction, are subject to a higher cap of 20%.
- Wage Increase for High-Wage Workers: The wages for the high-wage stream of the TFW Program have been raised by 20%. This translates to an increase of $5 to $8 per hour, depending on the location.
- Reduced Duration for Low-Wage Positions: The maximum duration for employing a foreign worker in a low-wage position has been reduced from two years to one year.
- Prioritization of Canadian Workers: Employers are now required to demonstrate greater effort in recruiting and hiring Canadian workers before turning to foreign labour. This includes conducting thorough searches and offering wages and working conditions competitive with the Canadian labour market.
What this means for small business owners
These changes will significantly impact small business owners who rely on the TFWP to fill labour shortages, particularly in sectors like food services, accommodation, and retail.
- Challenges for small businesses
- Increased difficulty finding workers: With a smaller pool of foreign workers available, small businesses may struggle to fill vacancies, potentially impacting operations and growth.
- Higher labour costs: Competition for Canadian workers could drive up wages, squeezing already tight margins for small business owners.
- Administrative burden: Navigating the changing regulations and requirements of the TFWP can be time-consuming and complex for small businesses
- What small business owners can do:
- Review current workforce: Assess your current reliance on temporary foreign workers and develop a plan to adjust to the new limits.
- Explore alternative recruitment strategies: Invest in training and development programs for Canadian workers, and consider offering incentives to attract and retain employees.
- Seek professional advice: Consult with an immigration lawyer or HR specialist to understand the new regulations and ensure compliance.
ClearWealth Accounting Advisors can help
Our team of experienced professionals can help your small business navigate the complexities of the TFWP and develop strategies to address the challenges posed by the new limits. We can assist with:
- Understanding the new regulations: We can provide guidance on the latest changes to the TFWP and how they impact your business.
- Developing a workforce plan: We can help you assess your current workforce and create a plan to transition to a more Canadian workforce.
- Managing labour costs: We can help you develop strategies to control labour costs and maintain profitability in a competitive market.
Contact us today to learn more about how we can support your small business. You can reach us at (437) 290-5117 or info@clearwealth.tax
