The Temporary Foreign Worker Program (TFWP) has long served as a vital mechanism for addressing labor shortages across Canada. However, significant changes in the Labour Market Impact Assessment (LMIA) process for low-wage positions, effective January 2025, are reshaping the landscape. Here’s a detailed breakdown of what you need to know, including the regions affected, implications for employers and workers, and strategies for navigating the updated policies.
Key Policy Update: Regions with LMIA Restrictions
As of August 26, 2024, the Canadian government announced it would no longer process LMIAs under the low-wage stream of the TFWP in Census Metropolitan Areas (CMAs) with unemployment rates of 6% or higher. The latest update, released on January 10, 2025, lists 15 CMAs that meet this criterion, including major cities such as Toronto, Montreal, and Calgary.
CMAs with Unemployment Rates ≥ 6% (January 2025)
| Census Metropolitan Area (CMA) | Unemployment Rate |
|---|---|
| St. John’s, NL | 6.0% |
| Saint John, NB | 6.1% |
| Montréal, QC | 6.2% |
| Toronto, ON | 7.9% |
| Windsor, ON | 8.8% |
| Calgary, AB | 7.5% |
| Edmonton, AB | 6.8% |
This list will be updated quarterly, with the next revision due on April 4, 2025.
Determining CMA Eligibility
To confirm whether a job location is in a restricted CMA:
- Enter the postal code of the work location on Statistics Canada’s Census of Population webpage.
- Check for the “Census metropolitan area” under geography results to determine eligibility.
Employers in ineligible CMAs must either increase wages to qualify for the high-wage stream or explore other hiring alternatives.
Understanding the Low-Wage Stream
The TFWP is divided into two streams: high-wage and low-wage. Positions under the low-wage stream offer wages below the median provincial or territorial rate, making them subject to stricter regulations.
High-Wage Stream vs. Low-Wage Stream
- High-Wage Stream: Requires wages 20% higher than the provincial/territorial median or aligned with industry standards.
- Low-Wage Stream: Restricted in CMAs with high unemployment rates to ensure Canadians and permanent residents are prioritized for local job opportunities.
In November 2024, the wage threshold for high-wage positions increased to 20% above the provincial median, intensifying the pressure on employers to adjust their hiring strategies.
Navigating the New LMIA Restrictions
For Employers
- Adjust Wages: Employers can raise the offered wage to qualify for the high-wage stream.
- Monitor Unemployment Rates: Employers in restricted CMAs should track updates to see if their region’s eligibility status changes.
- Alternative Hiring Strategies: Explore recruitment in eligible CMAs or invest in automation to reduce dependency on low-wage labor.
For Workers
- Check CMA Eligibility: Verify the unemployment rate in your job location before applying for a work permit renewal or LMIA.
- Focus Job Search: Concentrate on regions where low-wage LMIAs are still processed.
- Maintain Legal Status: Workers losing LMIA-based permits in restricted CMAs can apply for a visitor record to remain in Canada temporarily.
Broader Implications
Impact on Employers
The policy is designed to ensure that Canadian residents are prioritized for jobs in regions with high unemployment. However, this puts significant pressure on employers, particularly in industries reliant on low-wage foreign labor, such as hospitality, agriculture, and manufacturing.
Social and Economic Considerations
The rising unemployment rates in urban centers like Toronto and Calgary highlight challenges such as economic disparities, housing affordability, and job market saturation. By restricting low-wage LMIAs, the government aims to incentivize higher wages and create sustainable employment for Canadian workers.
Future Trends
The quarterly updates to the CMA list indicate the government’s dynamic approach to addressing labor market conditions. Employers and workers must remain adaptable and informed as the economic landscape evolves.
The latest LMIA restrictions under the low-wage stream reflect Canada’s commitment to balancing economic growth with labor market equity. While these changes pose challenges, they also offer opportunities for innovation and upskilling in the workforce. Employers and workers alike must stay proactive, leveraging resources and adapting strategies to thrive in this shifting regulatory environment.
