Canada hikes wage thresholds for Temporary Foreign Worker Program

Canada has implemented new higher wage thresholds for its Temporary Foreign Worker Program (TFWP) that have come into effect on June 27. This adjustment will directly impact the eligibility stream (high-wage or low-wage) for foreign nationals and significantly affect employers' ability to secure Labour Market Impact Assessments (LMIAs).

Key updates:

·  In order for firms to be eligible for the high-wage stream, they must now achieve the amended provincial salary thresholds for Canada's Temporary Foreign Worker Program.

· Employers under the low-wage stream are required to provide housing, transportation, and other necessary support to recruited workers.

· Jobs with salaries below these standards will be categorized as low-wage and subject to additional employer requirements. 

· Hiring strategies may be impacted by these modifications, particularly in industries that rely significantly on foreign labor. 

· The changes are intended to preserve local people' employment opportunities and bring earnings into line with Canadian norms.

The updated wage requirements vary by province and territory, reflecting the diverse economic landscapes across the country. Employers must now meet these increased thresholds for positions they wish to fill through the TFWP. 

For instance, Alberta's wage threshold rises from $35.40 to $36.00, a 1.69% increase, while British Columbia sees a more substantial jump of 5.71%, from $34.62 to $36.60. Ontario's threshold increases by 5.66%, moving from $34.07 to $36.00. 

Modest increases are also seen in Manitoba (0.53%), New Brunswick (3.98%), Newfoundland and Labrador (3.85%), Nova Scotia (4.17%), Prince Edward Island (4.17%), Quebec (5.04%), Saskatchewan (3.70%), and Yukon (2.78%). The Northwest Territories' threshold increases by 1.93%, from $47.09 to $48.00, while Nunavut's wage threshold remains unchanged at $42.00.

A critical implication of these changes is the ongoing moratorium on processing LMIAs under the low-wage stream in regions with an unemployment rate of 6% or higher. This moratorium, in effect since September 26, 2024, is expected to continue until at least July 10, 2025. 

This measure means that if a job's wage falls below the new provincial or territorial threshold in these affected areas, employers will be unable to apply for an LMIA, thereby preventing foreign nationals from obtaining or renewing work permits for those roles.

Furthermore, low-wage LMIA applications will not be processed if low-wage positions constitute more than 10% of the total workforce at a specific work location. Certain sectors are subject to a slightly higher cap of 20%.

These changes underscore Canada's ongoing efforts to adapt its immigration and labor policies to current economic conditions, aiming to ensure fair wages and a balanced labor market.