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Updates to TFWP – Employer Viability and Low/High Wage Differentiation

 

The Temporary Foreign Worker Program (TFWP) is the program through which employers seek permission to secure foreign workers, typically because a Canadian could not be found for the position. For an employer to hire a foreign worker, they must secure, through the TFWP, a Labour Market Impact Assessment (LMIA). [Note that this is distinct from the Immigration Mobility Program (IMP), which allows the hiring of a foreign worker without an LMIA. IMP work permits include intra-company transfers and free trade professionals.]

The Canadian government has announced some major changes to the TFWP. The first relates to the method of substantiating an employer’s ability to support a foreign worker. The second relates to the consideration of whether a worker is considered low wage or high wage, with consequences that flow therefrom.

Substantiating an Employer’s Ability to Support a Foreign Worker

An LMIA application has various facets including, for instance, specified recruitment guidelines, and wages and working conditions that must be offered. But the application by the employer must also show the employer’s legitimacy and ability to support the worker, in the sense that it has the financial and/or other resources necessary to ensure that it can meet its obligations.

To substantiate an employer’s viability in this regard, various types of information can be presented including certain tax and payroll records. However, in some case, rather than present such documents, employers have been able to provide an attestation from a qualified lawyer or accountant attesting to the company’s financial viability. This may be particularly relevant in a start-up situation. However, this has been problematic for various reasons including the question of the appropriateness of a lawyer or accountant in attesting to what is effectively future viability.

The government has now announced that such attestations will no longer be accepted. This seems to have pros and cons. On one hand, the difficulties in securing such attestations based on considerations noted above, will no longer arise. On the other hand, it will put a greater onus on employers to present more ‘tangible’ evidence of viability and legitimacy.

Low/High Wage Differentiation

LMIAs are divided into low wage and high wage. Low wage positions have some further safeguards for workers relating to, e.g., housing, recruitment, and transportation. Low wage occupations also have various restrictions in terms of caps of foreign workers, etc. The dividing line for low vs. high wage occupations is set by determining each province’s median wage.

The government has now announced that effective November 8, 2024, the dividing line between what is considered low wage and high wage will no longer be the provincial median wage. Rather it will be the provincial median wage plus 20%.

This will of course increase the percentages of LMIA applications that will be considered low wage. This may have implications for some employers who will now need to meet the more stringent requirements, and will be subject to the low wage regime.

[Note separately that employers seeking LMIAs must also ensure that foreign workers are paid appropriate wages, essentially, to ensure that Canadian workers are not undercut. The minimum wage to be paid for a particular position in a particular geographic location is a posted ‘median wage’ on the federal government’s job bank (in a range of low/median/high).]

Employers, and those advising employers, should ensure that they consider the issues and how the issues may impact relevant entities.

The information in this article is for general purposes only, and not intended as legal advice for any particular situation.