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Canada Issues New Rules for Hiring Foreign Workers

The new rules have distinct U.S. and Canadian flavours. Next year, Canada's migration program - Express Entry" will have a New Zealand/Australia taste. New Zealand was the first to use the Expression of Interest Scheme which was adopted by Australia as part of its new SkillSelect program. We arerepublishing the official report as part of our immigrant advocacy.

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Canada Issues New Rules for Hiring Foreign Workers
Posted on July 3, 2014 | Canada

New Reforms for the Temporary Foreign Worker Program

On June 20, 2014, the Honourable Jason Kenney, Minister of Employment and Social Development, and the Honourable Chris Alexander, Minister of Citizenship and Immigration, today announced a comprehensive overhaul of the Temporary Foreign Worker Program (TFWP).

The reforms cover three key areas:

  • reorganizing the TFWP to offer greater clarity and transparency
  • restricting access to the TFWP to ensure Canadians are first in line for available jobs; and
  • stronger enforcement and tougher penalties.

The Government is also ending the moratorium that was placed on the food services sector, effective immediately.

Reorganizing the TFWP

Using Wage Instead of National Occupation Codes

  • Wage levels will now replace National Occupational Classification as the main criteria for administering the TFWP, as wages constitute a more accurate reflection of occupational skill level and local labour market conditions.
  • Jobs for which wages are below the provincial or territorial median wage will be considered “low-wage,” while those being paid at or above the provincial/territorial median will be considered “high-wage.”

Labour Market Impact Assessment (LMIA) Fee of $1,000

  • The LMIA fee is increasing from $275 to $1,000 for every temporary foreign worker position requested by an employer.

Restricting access to TFWP

New Labour Market Impact Assessment

  • 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) 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.

Cap on Low-Wage Temporary Foreign Workers

  • Employers with 10 or more employees applying for a new LMIA are 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.
  • 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.
  • To provide employers who are above the 10 percent cap time to transition and adjust to this new cap, it will be phased in over the next couple of years.
    • For those employers that currently have a low-wage temporary foreign worker workforce that is above the cap, effective immediately, when those employers apply for a new LMIA they will be limited at 30% 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.

Refuse to Process

Applications for Low-wage / Lower-skilled positions in the Accommodation and food services and Retail trade Sectors

The TFWP is refusing to process LMIA applications for 10 low-wage / lower-skilled occupations from employers that are included in the Accommodation and food services sector and the Retail trade sector in economic regions across Canada that have an unemployment rate of 6% or higher. In order to be affected by this refusal to process, 3 criteria must be met.

Employers must be:

Pending Applications for Low-wage Positions

The TFWP is also refusing to process any pending applications for low-wage positions as of June 20, 2014. Any application that was submitted prior to June 20, for a position where the prevailing wage is below the provincial/territorial median hourly wage, and where an opinion has not been issued, will no longer be processed. In these cases, employers will be refunded the $275 per position processing fee. All other applications will be processed as normal.

This refusal to process applications is not applicable in Quebec.

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

  • The duration of work permits will be reduced from the current two-year standard duration to one-year periods as set out in the Labour Market Impact Assessments.

Transition Plans for High-Wage Positions

  • Employers seeking to hire high-wage temporary foreign workers (with very limited exceptions) will now be required to submit transition plans to demonstrate how they will increase efforts to hire Canadians, including through higher wages, investments in training and more active recruitment efforts from within Canada.

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

  • LMIAs for highest-demand occupations (skilled trades), highest-paid occupations (top 10 percent) or short-duration work periods (120 day or less) will now be provided within a 10-business-day service standard.

Stronger enforcement and tougher penalties

Increasing the Number and Scope of Inspections

  • The Government is massively increasing the number of inspections so that one in four employers using temporary foreign workers will be inspected each year.

Monetary Fines for Employers Who Break the Rules

  • 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).

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