Temporary Foreign Worker Program Overhaul: What Workers Need to Know

On June 20, 2014 the Government of Canada announced major changes to the Temporary Foreign Worker Program (TFWP). These changes have significant repercussions for Canadian employers across the country as well as current and future foreign workers.

The recent TFWP overhaul affects Canadian employers. Of course, many of these changes also have a significant impact on how foreign workers obtain their work permits, as well as what will happen during and after arrival in Canada.
Following is detail of the most important changes and what they mean for current and future foreign workers in Canada.

Labour Market Impact Assessments (LMIAs)

In most cases, Canadian employers need to obtain government approval before hiring a foreign worker. This approval comes in the form of a Labour Market Impact Assessment (LMIA), formerly known as a Labour Market Opinion (LMO).
In the eyes of the government, the responsibility for securing an LMIA rests solely with the employer in Canada. The LMIA process assesses whether the employer is eligible to hire from abroad.
If you are a foreign worker who has received a job offer in Canada, especially from a small or medium sized employer, you should be prepared for the employer to possibly question whether they want to go through this process at all.

LMIA-Based Work Permit Restrictions

In addition to increased LMIA requirements, there are now new time limits placed on work permits that require LMIAs. Individuals whose Canadian job offers are considered ‘low-wage’ under the new LMIA system (that is, individuals who will be paid less than the provincial median wage) will be issued work permits valid for no longer than one year in length. In addition, low-wage applications that were submitted before June 20, 2014 will not be processed. They will be returned with a refund of government processing fees. Employers are welcome to re-apply following the new rules for low-wage LMIAs.
The government has also implied that the maximum work permit length for ‘high-wage’ workers, who are paid a salary that meets or exceeds provincial median wages, will also be reduced. It has been reported that the maximum length will be cut to two years, although this has yet to be formally implemented.
Options remain in place to renew work permits that are set to expire, as well as to transition from temporary worker status to permanent resident status.
Moratorium Lifted for Food Service Work Permits
On April 24, 2014, the government announced a moratorium on LMIA and work permit issuances for certain occupations in the food services sector. As ofJune 20, this moratorium has been lifted and workers in the food sector may once again apply for work authorization.

LMIA-Exempt Work Permits

Work permits that do not require LMIA approval are now known as ‘International Mobility Programs’.
Certain work permits are LMIA-exempt but remain tied to a specific employer. These sorts of permits most commonly pertain to individuals applying under the NAFTA Program and the Intra-Company Transfer Program.
Currently, individuals are able to apply for their LMIA-exempt work permit once they obtain a job offer from a Canadian employer. In the future (date unknown), Canadian employers will be required to submit their job offers for approval to Citizenship and Immigration Canada before the foreign worker can apply for the work permit. Employers will be required to pay a $230 processing fee to have their job offer evaluated.
The foreign worker must still pay the standard $155 work permit application fee when submitting an application.

Open Work Permit Fees

In the future (date unknown), recipients of Open Work Permits will be required to pay a $100 ‘privilege fee’ in addition to the standard application fee of $155. Individuals who are eligible for open work permits include the spouses of foreign workers and students in Canada as well as participants in certain work exchange programs.
All new fees will help to cover government services such as work permit processing and employer compliance inspections.

Working in Canada Today

It is important to note that individuals who are currently in Canada on a work permit will not see any changes made to their current permits. However, any requests to renew or extend their work permits will be subject to the new rules. ——————————————————————————————-
One of our licensed immigration consultants can speak with you in person, online or on the phone about your unique immigration situation and give you a breakdown of your options.
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Big changes to the Canadian Foreign Worker Program – In Detail

navigating-temp-foreign-worker-programImproving Clarity, Transparency and Accountability of the Temporary Foreign Worker Program

To offer greater clarity and transparency, the Temporary Foreign Worker Program (TFWP) is being re-organized into two distinct programs (TFWP and IMP). This will reduce confusion and better reflect the major differences between the various streams.

On Friday, June 20, 2014 a significant overhaul of the Temporary Foreign Workers Program was announced at a lengthy media conference with both Minister of Employment and Social Development Jason Kenney and CIC Minister Chris Alexander presiding.

Background to Changes

The Ministers’ announcements come after what has been a long and grueling controversy surrounding the Program and its administration. In particular, there have been noted employers in the news as of late whose employment practices have been called into question. Stories of replacing Canadian workers with temporary foreign workers to employer abuses in terms of promises of wages and accommodation for their foreign workers have plagued the evening news.

With the new changes that have been made, the Government hopes to strike the right balance between ensuring that the TFWP is flexible enough to respond to Canada’s labour shortages while also protecting the rights of both temporary foreign workers and Canadian citizens.

TFWP Going Forward

The TFWP will now refer to only those streams under which foreign workers enter Canada at the request of employers following approval through a new Labour Market Impact Assessment (LMIA). The new International Mobility Programs (IMP) will include those streams in which foreign nationals are not subject to an LMIA, and whose primary objective is to advance Canada’s broad economic and cultural national interest, rather than filling particular jobs. These new categories will improve accountability, with Employment and Social Development Canada being the lead department for the TFWP, and Citizenship and Immigration Canada the lead department for the IMP.

Temporary Foreign Worker Program Objective:
Last resort for employers to fill jobs for which qualified Canadians are not available

International Mobility Programs Objective:
To advance Canada’s broad economic and cultural national interest

Based on employer demand to fill specific jobs Not based on employer demand
Unilateral and discretionary Base largely on multilateral/bilateral agreements with other countries (e.g. NAFTA, GATS)
Employer must pass Labour Market Impact Assessment (formerly LMO) No Labour Market Impact Assessment required
Lead department ESDC Lead department CIC
No reciprocity Based largely on reciprocity
Employer-specific work permits (TFWs tied to one employer) Generally open permits (participants have greater mobility)
Majority are low-skilled (e.g. farm workers) Majority are high skill / high wage
Last and limited resort because no Canadians are available Workers & reciprocity are deemed to be in the national economic and cultural interest
Main source countries are developing countries Main source countries are highly developed

In the interest of greater transparency and accountability, data for the TFWP and IMP have been re-organized so that statistics on the two distinct programs can be accurately tracked going back 10 years. Of the 221,273 foreign nationals entering Canada in 2013, 62 percent (137,533) came in under the IMP, the other 38 percent, or (83,740), came in under the TFWP.

Using Wage Instead of National Occupation Codes

The Temporary Foreign Worker Program (TFWP) will now be administered based on wage instead of the National Occupational Classification (NOC). The Government has found that Wage is a more objective and accurate reflection of skill level and labour need in a given area. Temporary foreign workers being paid under the provincial/territorial median wage will be considered low-wage, while those being paid at or above will be considered high-wage.

Median Hourly Wages by Province/Territory

Province/Territory

Wage ($/hr)

Newfoundland and Labrador $ 20.19
Prince Edward Island $ 17.26
Nova Scotia $ 18.00
New Brunswick $ 17.79
Quebec $ 20.00
Ontario $ 21.00
Manitoba $ 19.00
Saskatchewan $ 21.63
Alberta $ 24.23
British Columbia $ 21.79
Yukon $ 27.93
Northwest Territories $ 32.53
Nunavut $ 29.96

Source: Labour Force Survey, 2013

The primary categories under the new TFWP

Under the new TFWP, there will be a priority focus on the following occupational streams:

High-wage:positions at or above the provincial/territorial median wage; examples of high-wage occupations include managerial, scientific, professional and technical positions as well as the skilled trades.

Low-wage:positions below the provincial/territorial median wage; examples of low-wage occupations include general labourers, food counter attendants, and sales and service personnel.

Primary Agricultural Streamincludes positions related to on-farm primary agriculture such as general farm workers, nursery and greenhouse workers, feed lot workers and harvesting labourers, including under the Seasonal Agricultural Workers Program, which enables the entry of foreign workers from Mexico and a number of Caribbean countries to meet the temporary, seasonal needs of agricultural producers.

Highest-demand, highest-paid or shortest-duration: Labour Market Impact Assessments for in-demand occupations (skilled trades), highly paid occupations (top 10%) or short-duration (120 days or less) entries will be provided within a 10 business day service standard. As for all requests to hire temporary foreign workers, LMIAs would only be granted after a rigorous review of all of the elements of the employer’s application in each of these cases.

Live-in Caregiver Programno change.

New Labour Market Impact Assessment (LMIA) Snapshot

The labour market test that allows employers to bring temporary foreign workers to Canada is being transformed from a Labour Market Opinion (LMO) to a new Labour Market Impact Assessment (LMIA), a process that is more comprehensive and rigorous. Employers must provide additional information, including the number of Canadians that applied for their available job, the number of Canadians the employer interviewed, and explain why those Canadians were not hired. Employers must now also attest they are aware of the rule that Canadians cannot be laid-off or have their hours reduced at a worksite that employs temporary foreign workers.

New and better sources of labour market information will be used to determine if there are Canadians who could fill these positions.

LMIAs are conducted and processed by Employment and Social Development Canada (ESDC). ESDC will refuse to process applications when there are concerns that temporary foreign workers may or will have a significant negative effect on the Canadian labour market.

Current numbers and statistics show that the TFWP is no longer being used as it was intended to be used — as a last and limited resort to allow employers to bring foreign workers to Canada on a temporary basis to fill jobs for which qualified Canadians are not available. The reforms are being implemented to end the growing practice of employers building their business model on access to the TFWP.

Accordingly, the Government of Canada is introducing a cap to limit the proportion of low-wage temporary foreign workers that a business can employ. The cap will significantly restrict access to the TFWP, while ensuring that Canadians are always considered first for available jobs, reducing employer reliance on the program and increasing wages offered to Canadians. It is expected that this measure alone will nearly cut in half the number of low-wage temporary foreign workers once fully implemented.

Employers with 10 or more employees will be subject to a cap of 10 percent on the proportion of their workforce that can consist of low-wage temporary foreign workers. This cap will be applied per worksite of an employer and is based on total hours worked at that worksite. To provide employers time to transition and adjust to this new cap, it will be phased in over the next couple of years.

Effective immediately, employers that are applying for a new LMIA will be limited at 30 percent or frozen at their current level, whichever is lower. This transition measure will be further reduced to 20 percent beginning July 1, 2015 and reduced again to 10 percent on July 1, 2016. The Government may consider lowering the cap further in the future. Temporary foreign workers currently working at work sites over the cap will be allowed to continue working at those sites until their existing work permits expire.

The caps will ensures that large employers with multiple locations cannot be over their limit for low-wage temporary foreign workers at any one of their locations. For example, a large employer with an overall national workforce comprised of 5 percent temporary foreign workers cannot justify bringing in larger volumes of foreign workers at specific locations and having the temporary foreign worker staff at those locations exceed the cap.

The cap sends an important message—temporary foreign workers cannot be used as a business model and employers must do more to recruit, hire and train Canadians. This measure will help drive down the overall number of low-wage temporary foreign workers in Canada and end the distortion in the labour market caused by their prevalence in some sectors and regions.

Refusing Applications in Areas of High Unemployment

Effective immediately, the Government will begin the process of refusal of certain Labour Market Impact Assessment applications in the Accommodation, Food Services and Retail Trade sectors. Specifically, any applications for positions that require little or no education or training will not be processed in economic regions with an unemployment rate at or above 6%.

Reducing the Duration of Work Permits set out in Labour Market Impact Assessments

Effective immediately, the duration of work permits set out in Labour Market Impact Assessments (LMIAs) will be limited to a maximum of one year for all low-wage positions, rather than the 2 year duration that existed previously. Employers of low-wage temporary foreign workers must reapply every year for an LMIA, better-accommodating for changes in labour market conditions that might have occurred.

Reducing the Length of Time a Temporary Foreign Worker can Work in Canada

The TFWP is to be used as a last and limited resort, and to encourage employers to make even greater efforts to ensure foreign workers are coming in on a truly temporary basis and that Employers are encouraged to hire and train Canadian workers before seeking temporary foreign workers. In order to facilitate this transition, the Government will reduce how long a temporary foreign worker in the low-wage stream can work in Canada. This measure will not apply to temporary foreign workers currently in Canada on valid work permits.

Changing the Provincial/Territorial Temporary Foreign Worker Annexes

Five provincial/territorial governments (Alberta, British Columbia, Ontario, Nova Scotia and Yukon) currently have annexes to their immigration agreements with the Government that establish Labour Market Impact Assessment (LMIA) exemptions in their jurisdiction. In these cases, the provinces and territories may propose LMIA exemptions for certain occupations and pilot projects involving exemptions to the LMIA process can be initiated.

Transition Plans for High-Wage Positions

Employers who want to hire temporary foreign workers in high-wage occupations will be required (with limited exceptions) to submit transition plans with their Labour Market Impact Assessment (LMIA) application to ensure that they are taking steps to reduce their reliance on temporary foreign workers over time. This underscores the purpose of the program — which is to operate as a last and limited resort to address immediate labour needs on a temporary basis when qualified Canadians are not available.

Highest-Demand, Highest-Paid and Shortest-Duration Occupations

LMIAs for highest-demand occupations (skilled trades), highest-paid (top 10 percent) occupations or short-duration work periods (120 days or less) will now be provided within a 10-business-day service standard. As is the case for all requests to hire temporary foreign workers, LMIAs would only be granted after a rigorous review of all of the elements of the employer’s application in each of these cases. This service standard will be met by processing these applications first, not by reducing the thoroughness of these LMIAs.

Labour Market Impact Assessment Fee of $1,000

As with the proposed changes and the more rigorous measures to be implemented in the new Temporary Foreign Worker Program (TFWP), this will substantially increase the cost of delivering the program. The costs for administering the TFWP, including all of the reforms outlined above, will be borne entirely by employers who use the program, and not by Canadian citizens and tax payers. As a result, the LMIA fee is increasing from $275 to $1,000 for every temporary foreign worker position requested by an employer.

The following chart illustrates the increase of the fee over the past few years:

 Year

 Assessment Fee

1973 – 2013

 $0

July 2013

 $275

June 2014

$1,000

The fee will be evaluated on an ongoing basis, and necessary adjustments will be made to ensure that it continues to fully cover the costs of the TFWP.

Additionally, the Ministry of Employment and Social Development will be seeking the authority to impose an estimated $100 privilege fee on employers applying for LMIAs to offset the costs of Government of Canada investments in skills and job training.

Better and More Labour Market Information

The new Labour Market Impact Assessment will be made more effective with the introduction of more and better labour market information. As part of this structure, a new enhanced Job Matching Service will allow Canadians to apply directly through the Canada Job Bank for jobs that match their skills and experience. As employers applying for temporary foreign workers must post their jobs on the Job Bank website, the new Job Matching Service will be able to match unemployed Canadians with employers offering available jobs that match their skills in their region. Furthermore, program officers will be better aware of the number of potential applicants and how closely their skills align with the available job, which will allow for more rigorous assessment of LMIA applications.

Increasing the Number and Scope of Inspections

Given concerns over abuse of the Temporary Foreign Worker Program (TFWP), the Government is making a significant investment in its TFWP inspection regime.

Beginning in fall 2014, the Government will impose fines of up to $100,000 (depending on the severity of the offence) on employers who break the rules of the Temporary Foreign Worker Program (TFWP). As part of the Government’s efforts to improve the transparency and accountability of the TFWP, the Government will publicly disclose the names of employers who have been fined and the amount of that fine on the Blacklist.

In Conclusion

The changes to the TFWP serve to increase the commitment of the Canadian employer to train an already available Canadian labour force while resorting to a smaller avenue where they could hire a temporary foreign worker as a last resort, if needed, after all other avenues have been exhausted.

Employers will see that the system is set up still to facilitate a foreign worker immigration process, should it be the genuine requirement of their business. As well, there are many other streams for immigration that are available to the Employer should the TFWP not fit with their hiring goals. There still remains within the system great flexibility within the current immigration program offerings across Canada.

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One of our licensed immigration consultants can speak with you in person, online or on the phone about your unique immigration situation and give you a breakdown of your options.
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Canada to Encourage Irish Immigration at Jobs Expo Dublin and Jobs Expo Cork

A street in Dublin, Ireland. Thousands of Irish job seekers are expected at the job expos being held in Dublin and Cork on September 6, 7 and 10 (Jean Housen)

At least seven Canadian companies will have a presence at this year’s Jobs Expo Dublin and Jobs Expo Cork, where they will promote the country as an ideal destination for Ireland’s skilled workers to find work and to settle.

The job expo, which is scheduled for Friday September 6th and Saturday 7th in Dublin, and Tuesday September 10th in Cork, will attract thousands from across Ireland seeking to assess the employment opportunities being offered. Dozens of companies from around the world will be manning booths at the event.

With Ireland now back in recession, immigration to Canada is becoming an increasingly attractive option for the country’s workers, whose skills, including English fluency and many with skilled trades qualifications, are well matched for Canada’s economy.

Among Canadian firms present at the expo will be CICS Immigration Consulting, which will be holding seminars on immigration to Canada in Dublin on Friday September 6th from 3pm – 3.45pm and in Cork on Tuesday September 10th from 5pm – 5.45pm.

Canadian immigration consultant and CICS principal Alex Khadempour will detail the main routes through which Irish workers can obtain work permits and permanent residency in Canada and provide a layout of the Canadian labour market and what immigrants might expect to encounter when they arrive in the country.

The job expo will run from 11am to 4pm in the Croke Park Conference Centre in Dublin and from 12pm to 6pm in the Silver Springs Moran Hotel in Cork.

Changes Made to Canada’s Temporary Foreign Worker Program

HRSDC Minister Diane Finley speaking in the House of Commons last September. New rules and increased fees for work permit applications were announced by Finley and Citizenship and Immigration Minister Jason Kenney on Monday (Government of Canada)

Amid controversy and criticism over a series of incidents involving temporary foreign workers (TFWs) in recent months, including a story that emerged last month of Canadian workers losing their jobs to foreign workers at the Royal Canadian Bank, the federal government has announced several immediate and upcoming changes to the Temporary Foreign Worker Program (TFWP).

These changes are:

  • An employer is required to guarantee to pay a TFW prevailing wages for that foreign worker to be eligible for a work permit, effective immediately. The rule allowing companies to pay TFWs 15 percent less than prevailing wages for high-skilled positions, and 5 percent less for low skilled ones has been repealed.
  •  

  • The Accelerated Labour Market Opinion (ALMO) has been suspended, effective immediately.
  •  

  • The federal government is seeking the authority to suspend a Labour Market Opinion (LMO) if new information emerges showing that it negatively affects the Canadian economy and Canadian workers, and revoke work permits that were authorized by that LMO.
  •  

  • Fees employers pay for work permit and LMO applications will increase so that a portion of the cost of processing them will no longer have to be paid out of general taxes.
  •  

  • Job requirements for positions that use TFWs can only have English or French as required languages, unless an employer receives a special exemption after having shown Human Resources and Skills Development Canada (HRSDC) why the foreign language is necessary for the position.

The new rules attempt to close some of the major loopholes that critics have identified in the program that they say allow Canadian companies to use foreign workers instead of available Canadian workers.

The changes were jointly announced by HRSDC Minister Diane Finley and Citizenship and Immigration Minister Jason Kenney on Monday.

Canadian Immigration Application Fees to Increase

Canadian Finance Minister Jim Flaherty announced the federal government’s proposed budget on Thursday, which calls for increased fees on citizenship and temporary resident visa applications and increased spending on application processing (Maria Azzurra Mugnai)

Immigration processing fees are going to increase, according to a proposed federal budget released on Thursday.

The cause of the coming fee hikes, according to Alexis Pavlich, a spokeswoman for Immigration Minister Jason Kenney, is Citizenship and Immigration Canada (CIC) processing costs for citizenship applications that have increased over the last two decades, without any increases in fees over that time.

Fees currently paid by individuals applying for citizenship only cover 20 percent of the processing cost, and the rest is paid out of taxes levied on the general population. CIC plans on doubling the processing fee for citizenship applications to $400, to reduce the portion paid out of general revenues to 60 percent.

As of September 2012, there were 319,517 citizenship applications awaiting processing, and only enough funding for CIC to process 160,000 of them. The proposed budget allocates $44 million in additional funding over two years to speed up the processing of the remaining citizenship applications, and gives CIC the authority to increase fees to pay for the spending.

Fees for temporary resident permits are also likely to increase. Canada has seen the number of visitor visas issued per year increase to over one million in 2012, and the federal government plans to spend $42 million over two years to process them more quickly. To fund the extra spending, the government is planning to allow CIC to raise application fees for visitor visa applications.

Fees for temporary resident visas haven’t increased for 15 years, according to Pavlich.

Another area where federal officials hope to collect more money is in work permit applications. Currently, Human Resources and Skills Development Canada (HRSDC) handles the labour market assessments required for work permit applications at no cost to the employer who is seeking to hire the foreign national.

The federal government plans to begin charging companies a fee for the labour market assessments.

Changes to Arranged Employment Stream of Federal Skilled Worker Program

The Services Canada centre in Ottawa Centre. Applicants under the arranged employment stream of the Federal Skilled Worker Program need to include a positive Labour Market Opinion from Services Canada (HRSDC) with their application beginning May 4, 2013 (GOOGLE MAPS)

Changes will be coming to application requirements under the arranged employment stream of the Federal Skilled Worker Program (FSWP) on May 4, 2013, according to an announcement by Citizenship and Immigration Canada (CIC) this week.

Individuals with arranged employment in Canada and those enrolled in or who have graduated from a PhD program at a Canadian educational institution are the only groups of people who are currently eligible for the FSWP, as the program is suspended in preparation for the launch of new selection rules for the general application stream on May 4th.

In order for applicants outside of Canada to qualify for the FSW arranged employment stream, they are required to submit an Arranged Employment Opinion (AEO) issued by Human Resources and Skills Development Canada (HRSDC) for a skilled job (NOC skill level A or B), along with their application.

Applicants that are in Canada with a work permit at the time of their application are not required to submit an AEO.

According to this week’s notice, starting May 4th, CIC will require applicants outside of Canada to submit a Labour Market Opinion (LMO) instead of an AOE along with their application.

A LMO is typically issued by HRSDC to employers seeking a work permit for a foreign national they are interested in employing in Canada, and shows that the employment of the foreign national in Canada would likely not negatively affect Canadian jobs in the opinion of HRSDC.

Changing to requiring LMOs is expected to simplify government processes and save on procedural costs.

Canadian Unions Seeking Roll Back of Temporary Foreign Worker Program

Two major Canadian unions have asked a federal court for an injunction to prevent the federal government from granting work permits for the Murray River project until their case has been heard (Markus Schweiss)

Two trade unions have filed an application in federal court to force the federal government to reverse its decision to grant some 200 work permits to temporary foreign workers from China that a Canadian company wants to hire to run a new mine in British Columbia.

The International Union of Operating Engineers and the Construction and Specialized Workers Union, which together represent the majority of workers employed in Canadian mines, are asking for a judicial review to over-turn the Canadian government’s grant of Labour Market Opinions (LMOs) to HD Mining International, the operator of the Murray River project near Tumbler Ridge, BC, near the Alberta border.

The unions argue that the decision harms Canadian wage-earners and does not meet HRSDC’s own standards for receiving approval to hire temporary foreign workers.

Under Canadian immigration law, a company wishing to hire a temporary foreign worker is required to apply to Human Resources and Skills Development Canada (HRSDC) for a LMO, which HRSDC approves if it meets five main conditions:

  • the wages and working conditions offered are consistent with prevailing norms for the occupation in Canada;
  • the foreign worker would fill a pressing labour shortage;
  • there is no labour dispute between a union and the employer in progress;
  • the employer made a significant effort to recruit or train Canadians or permanent residents for the position that the temporary foreign worker will fill;
  • the foreign worker will result in a net benefit to the Canadian economy and workers

According to an op-ed in the Vancouver Sun on Wednesday by Brian Cochrane, a business manager for Local 115 of the International Union of Operating Engineers, the unions have succeeded in forcing the federal government to disclose internal documents relating to HD Mining’s application for the LMOs:

We have been successful in court so far. We have been granted standing by the court to challenge the federal government on these LMOs, and we have succeeded in forcing them to release more than 85 pages of secret documents, despite their strong objections. We are now continuing to seek a full judicial review of the temporary foreign workers program.

HD Mining’s transition plan

Included among the documents disclosed is a transition plan that HD Mining International submitted to HRSDC in its LMO application, which outlines how it said it will replace its temporary foreign workforce with Canadians over a period of 14 years.

The transition plan calls for the first Canadian workers to begin working at the mine in four years, and for 10 percent of the foreign workforce to be replaced by Canadians every year for the next 10 years afterwards, as they are trained.

To demonstrate its intention of following through with its plan and eventually hiring Canadians, HD Mining recently signed a memorandum of understanding (MOU) with Northern Lights College to develop an underground mining education program that will train Canadians for positions in the mine.

The transition plan is touted by the mining company as evidence that the use of foreign workers will be temporary, while the unions and other critics of the foreign worker decision say that the 14 year length of the transition period shows the Temporary Foreign Worker Program is being mis-used for long term labour needs.

Wider questions about Temporary Foreign Worker Program

The unions’ court challenge of the HRSDC’s LMO decision on HD Mining and the subsequent media attention it received spurred the federal government to announce a review of the entire Temporary Foreign Worker Program (TFWP) to determine if it was too lenient in granting work permits.

The review comes amid a steadily increasing temporary foreign worker population, from approximately 100,000 in 2002 to over 300,000 today, which has drawn criticism from a diverse coalition that includes labour union advocates and free-market economists.

In one example, SFU economist and senior fellow at the free-market-leaning Fraser Institute Herbert Grubel last month called the TFWP a subsidy for business that comes at the expense of lower Canadian wages, a statement that is virtually indistinguishable from many that are coming from much more left-leaning labour unions.

Much of public opinion is also cool to the foreign worker program, with a CBC/Nanos survey this month showing that 68 percent of respondents said they were against allowing temporary foreign workers into the country if there were Canadians looking for work who are qualified for the same jobs.

Despite the opposition, there is no sign that the demand for temporary foreign workers from Canadian businesses will slow down soon, as companies in the resources sectors find it difficult to meet their labour needs in often inhospitable locations, and various occupations that are undesirable to Canada’s workers for the wages offered face labour shortages.

Alberta Temporary Worker Program to Expand List of Eligible Occupations

The temporary foreign worker pilot is intended to alleviate the acute labour shortages that natural resource industry hubs like the city of Fort McMurray face (Regional Municipality of Wood Buffalo)

Citizenship and Immigration Canada (CIC) and the provincial government of Alberta jointly announced this week that the Alberta temporary worker pilot program will be expanded to include more occupations.

The pilot project began in June 2011 and issues special work permits to foreign nationals who meet the program’s requirements, including being qualified in an eligible occupation, which allows them to work temporarily in Alberta in a single occupation without the constraints that typically come with work permits for temporary foreign workers, like requiring a Labour Market Opinion (LMO) from Services Canada to change employers.

The expansion of the program will add the following occupations to the list of approved occupations:

  • Welder
  • Heavy duty equipment mechanic
  • Ironworker
  • Millwright and industrial mechanic
  • Carpenter
  • Estimator

The pilot previously accepted only a single occupation, pipe/steam-fitter.

Alberta faces some of the most severe labour shortages for skilled trades workers in Canada, as companies are unable to find a sufficient number of Canadian residents that are able and willing to work in often remote resource extraction sites like the oil sands in the province’s north.

New Canadian EI Rules Could Affect Number of Work Permits Issued to Foreign Workers

The Harper government is planning to change the federal Employment Insurance program to encourage the long-time unemployed to take available Canadian jobs, which could reduce the demand for foreign workers in Canada’s resource and service industries.

Human Resources Minister Diane Finley announced changes to the EI program on Thursday (Human Resources and Skill Development Canada)

Canadian Immigration Minister Jason Kenney had earlier noted the anomaly of regions of Canada with high unemployment rates being forced to bring in foreigners to fill vacant jobs primarily in the resource sector due to too few Canadians being willing to do them.

The new EI rules could remedy this situation by increasing the incentive for unemployed Canadians to take up resource-sector and menial labour jobs. Minister of Human Resources, Diane Finley, in an announcement introducing the proposed changes, said the purpose of the new rules was to “connect Canadians with available jobs in their local area”.

The changes could also mean that foreign workers could see a drop in demand from Canadian firms for their labour and be less likely to be granted a Canadian work permit.

New Rules Explained

Under the new changes, EI recipients will be divided into three tiers:

  • Long-tenured workers – Canadians who have paid into EI for seven of the preceding ten years and over the preceding five years have collected EI for 35 weeks or less
  • Frequent claimants – Canadians who have had three or more claims and received benefits for more than 60 weeks in the preceding five years
  • Occasional claimants – All other claimants

Long-tenured workers will receive benefits for 18 weeks without having to expand their job search to different occupations. In this period, they will lose their EI benefits if any job that pays at least 90 percent of their previous earnings and is the same occupation as their previous job is available to them and they refuse to take it.

After 18 weeks, they would lose their benefits if there is any job that pays at least 80 percent of their previous earnings and is in a similar industry as their previous job is available to them and they refuse to take it.

Occasional claimants will receive benefits for six weeks without having to expand their job search to different occupations. In this period, they will lose their benefits if any job that pays at least 90 percent of their previous earnings and is the same occupation as their previous job is available tot hem and they refuse to take it.

After six weeks, they would lose their benefits if there is any job that pays at least 80 percent of their previous earnings and is in a similar industry as their previous job is available to them and they refuse to take it. After 18 weeks, they would lose  they would lose their benefits if there is any job in any industry that pays at least 70 percent of their previous earnings available to them and they refuse to take it.

Frequent claimants will receive benefits for six weeks without having to expand their job search to different industries. In this period, they will lose their EI benefits if any job that pays at least 80 percent of their previous earnings and is in a similar industry as their previous job is available to them and they refuse to take it.

After six weeks, they would lose their benefits if there is any job in any industry that pays at least 70 percent of their previous earnings available to them and they refuse to take it.

The new rules also require claimants to travel up to an hour to work an eligible job.

Uncertain Economic Impact

How the proposed changes to EI affect the number of work permits issued will largely depend on how effective they are in encouraging Canadians on EI to find jobs.

Amela Karabegovic, an economist for the Fraser Institute, believes that the changes are relatively minor tinkering and don’t fix the fundamental flaws of the current Employment Insurance model.

In an interview with CICS, Ms. Karabegovic said that the major problem with federal Employment Insurance is that the premiums employers and employees pay are a fixed percentage of income, that isn’t adjusted for risk, making it unlike any other type of insurance.

“The incentives are such that some individuals may over-use it. To give you an example, imagine having car insurance where no matter of how many claims you make, you pay the same premium. Regardless how many accidents you get in, regardless of your age, and so on.

Similarly with Employment Insurance, unless the premiums are adjusted to reflect risk, obviously some individuals are going to over-use it,” Ms. Karabegovic said.

“Instead of making marginal changes, there has to be a more fundamental change in order for the system to work properly, to do what it’s supposed to do which is to provide temporary assistance to those who unexpectedly lost their jobs”.

 

Federal Government to speed up Work Permit Application Process

Human Resources Minister Diane Finley talking to workers

In a visit to the Alberta manufacturing facility of Advance Engineered Products on Wednesday, Human Resources Minister Diane Finley announced the federal government’s update to the Temporary Foreign Worker Program that speeds up the process of acquiring work permits.

Before a foreign worker can receive a work permit in Canada, their Canadian employer/sponsor must get a Labor Market Opinion from Human Resources and Skills Development Canada (Services Canada) that states that the employer made a significant effort to hire a Canadian and was unable to, and that hiring a foreigner would not have a negative impact on Canadian jobs.

Currently, Labor Market Opinions take months due to red tape. In Wednesday’s announcement, a new Accelerated-Labour Market Opinion (A-LMOs) was introduced, which allows qualifying employers to get a fast-tracked Opinion in 10 days.

Employers who have a record of following the rules on hiring foreigners are eligible to receive A-LMOs for those they sponsor, but if they break the rules, Ms. Finley said they will be suspended from sponsoring foreigners for work permits for two years.

The new A-LMO process includes a simplified, online application process, which became available on Wednesday, and more automation to reduce paperwork.