Canadian Employers, Be Prepared: How Major Shifts in Immigration Policies Affect Your Business

In the last few months, Canada has experienced a significant shift in its immigration landscape, with the recent ending of public policies facilitating the hiring of foreign nationals in Canada and unprecedented restrictions on the use of the Temporary Foreign Worker Program (TFWP).

Consequently, employers hiring foreign workers are forced to rethink their policies and strategies surrounding international recruitment and work permit extensions planning. Our Fasken team presents this bulletin to initiate your reflection.

Recent Measures Announced by the Federal Government

At this time, the new measures only apply to Labour Market Impact Assessment (LMIA) applications submitted in TFWP Low-Wage stream, including those submitted under the Facilitated Process.[1]

Effective September 3, 2024, the processing of new LMIA applications for the Low-Wage stream[2] in the Montréal economic region[3] is suspended for six months. This suspension does not apply to:

• Jobs offered in a place of work located outside the Montréal economic region;
• Jobs with an offered hourly wage equal to or higher than the current median hourly wage in Quebec ($27.47/hour);
• LMIA applications received prior to September 3, 2024;
• Employers in the following five (5) industry sectors,: agriculture, construction, food processing, education, and healthcare [4]

Effective September 26, 2024, new Low-wage LMIA applications will be subject to the following criteria:

• Refusal to process LMIA applications in census metropolitan areas with an unemployment rate of 6% or higher. Exceptions will however be granted for the five (5) industry groups mentioned above;
• Employers submitting new LMIA application will be obliged to limit the use of foreign workers to 10% of the workforce for low-wage positions. Exception will be granted for the 5 industry groups mentioned above;
• The maximum duration of employment will be reduced to one (1) year down from two (2) years.

Alternative Immigration Strategies to Retain Foreign Workforce

Facing this major shift in immigration policies, most employers would benefit from reevaluating their immigration strategy in order to actively attract and retain their foreign workforce. Here are some starting points to implement a new strategy:

(i) Consider shifting to hiring foreign workers through the International Mobility Program

The International Mobility Program (IMP) allows employers to hire a foreign worker without first obtaining an LMIA (as opposed to the TFWP) and should be presented in support of broader economic, social and/or cultural goals or reciprocal benefits for Canadians or permanent residents. This includes streams for international trade, performing arts, francophone immigration, youth mobility, post-graduation work permits, and prospective permanent residents.

For example, if the job is based in any Canadian province other than Quebec (except for certain primary agriculture occupations), an employer can leverage the Francophone Mobility work permit category for candidates that are able to demonstrate moderate French proficiency.

Additionally, for companies having operations in one or more location outside of Canada, an effective way to retain foreign workforce is to leverage the Reciprocal Employment work permit category. This category allows foreign workers to take up employment in Canada when Canadians have similar reciprocal employment opportunities abroad. While it is commonly used for professional and technical occupations, there is no restriction regarding the type of occupation that can be included under this work permit category. As such, an employer who can demonstrate reciprocal employment volumes through internal data and/or via its HR Global Mobility Policy may be able to utilize this category as an alternative to an LMIA-based work permit application. For some ideas to draft a Global Mobility Policy, please read our bulletin A Path to Growth: Creating an Effective International Mobility Policy for Your Business | Knowledge | Fasken.

(ii) Assess the pertinence of awarding promotions or pay raises

Where an employee’s hourly wage is close to meeting the median wage, employers can consider offering a promotion and/or increasing the employee’s salary. This will allow them the opportunity to leverage a work permit extension or new work permit application via the LMIA High-Wage stream, which as of now has not been included as part of the new restrictions, but this may be subject to change.

This option may not be desirable for all positions and should be assessed on a case-by-case basis to ensure internal pay equity. Moreover, this suggestion might become irrelevant depending on the upcoming changes to the High-Wage Stream.

(iii) Prioritize an integration strategy to support the permanent residence process

Employers should also focus on an effective integration plan for foreign workers, notably by facilitating and supporting their access to permanent residence.

For example, employers can offer French or English courses on the work site or offer to cover fees for language courses. Employers may also consider supporting a foreign worker by taking part in a Provincial Nomination Program submission to accelerate the chances of their employees being invited to apply for permanent residence or by covering the costs involved in preparing and submitting a permanent residence application. This may seem like an onerous commitment at first, but it is worthwhile in the long run, as employers will no longer need to invest in continuous LMIA and work permit renewals for their employees.

(iv) Bear in mind the employment laws and labor standards

It is important for employers to keep in mind that employment laws & labour standards still apply in situations like these, and they must be considered when conducting workforce planning to mitigate risks for the business. For unionized positions, an employer must also ensure to abide by the rules of the collective bargaining agreement in force.

For instance, a common question that has arisen since the government’s recent announcements is whether employers should be favouring work permit extension support for foreign workers who are eligible and interested in permanent residence. In doing so, the objective would be to ensure they are retaining employees who are less likely to be affected by government-imposed quotas or moratoriums on temporary residence applications. In such circumstances, employers who are part of a union can propose a memorandum of understanding to the union to protect the interests of both the employees and the company.

Key Takeaways

Canadian immigration laws and policies change frequently. As we move into the final quarter of 2024, the Federal Government plans to continue to implement new immigration caps and policies directed at international students, temporary residents, and foreign workers. In order for employers to effectively utilize immigration as a tool to optimize and grow their businesses operations, it is important for employers to stay up to date on changes to immigration laws and policies and plan accordingly.