6 key changes to the TFWP may help employers overcome labour shortages.
With labour in desperately short supply across much of the country, the federal government has made 6 key changes to work permit rules under the Temporary Foreign Worker Program (TFWP). In addition to giving employers greater leeway to hire foreign workers, the changes will undo some of the negative consequences of COVID-10 on the Canadian immigration system.
1. Permanent Extension of Seasonal Cap Exemption
Old Rule: The Seasonal Cap Exemption provided employers in seasonal industries, like fish and seafood processing, access to foreign workers beyond the low-wage cap for 180 calendar days of employment.
Change: In April, the government permanently increased the cap to 279 days.
2. Temporary Extension of LMIA Validity
Under TFWP rules, an employer in Canada must obtain a document called a Labour Market Impact Assessment (LMIA) before a foreign national can apply for a work permit. Screening the LMIA enables the government to verify that the employer and job offer are legitimate and that the entry of the foreign worker won’t have an adverse effect on the Canadian labour market.
Old Rule: LMIAs were valid for up to 9 months.
Change: LMIAs are temporarily valid for up to 18 months. This gives employers more flexibility and extra time period to tap into foreign worker talent.
3. Extended HWS and GTS Employment Duration
When a foreign worker is approved for a work permit, the end date is typically set to align with the employment duration listed in the LMIA. The maximum duration of a foreign worker’s employment varies by program stream.
Old Rule: The maximum employment duration under the High-Wage Stream (HWS) and Global Talent Stream (GTS) was 2 years.
Change: Effective April 4, the maximum employment duration for the HWS and GTS is 3 years. The extra year of TFWP work permit status gives foreign workers affected by the backlog in permanent residency (PR) processing more time to transition to PR status without having to seek renewal of their permit. Caveat: Employers that request a 3-year GTS LMIA must agree to provide Labour Market Benefits Plan (LMBP) commitments for 3 years.
4. Doubling of Low-Wage Cap
There’s a cap on the proportion of low-wage temporary foreign workers an employer can hire.
Old Rule: For most employers, the low-wage cap was 10% of full-time equivalent (FTE) positions. For sectors with demonstrated labour shortages in low-wage positions, the cap was 20%.
There are currently 7 sectors with demonstrated labour shortages in low-wage positions:
Food Manufacturing (NAICS 311);
Wood Product Manufacturing (NAICS 321);
Furniture and Related Product Manufacturing (NAICS 337);
Accommodation and Food Services (NAICS 72);
Construction (NAICS 23);
Hospitals (NAICS 622); and
Nursing and Residential Care Facilities (NAICS 623).
Change: Effective April 30, the low-wage cap for most employers is 20%, and 30% for sectors with demonstrated labour shortages in low-wage positions.
5. Elimination of the 6% Refusal to Process Policy
Old Rule: The TFWP refused to process LMIA applications for certain low-wage occupations in the Accommodation and Food Services, and Retail Trade sectors in economic regions with 6% or higher unemployment.
Change: The government has ended the refusal to process policy. However, employers still have to demonstrate on their LMIAs that they consider Canadians first for the employment positions for which they want to hire a foreign worker.
6. Special PGWP Extension Policy
A special policy allows Post-Graduate Work Permit (PGWP) holders whose temporary status expires between Jan. and Dec. 2022 to qualify for an additional open work permit of up to 18 months. In addition to giving PGWP holder more time to gain Canadian work experience and transition to PR status, this policy will benefit employers that hire PGWPs.