What’s Changing for Canada Work Permits in 2024?

The biggest changes to Canada’s 2024 work permit system and see if I can figure out how it will affect you!

Canada is implementing significant reforms to its Temporary Foreign Worker Program (TFWP) in late 2024, aiming to address labor shortages while prioritizing Canadian workers. Set to roll out on October 28 and November 8, the new rules will tighten wage requirements, strengthen business legitimacy checks, and increase compliance measures to create a fairer labor environment. These changes are crucial for both employers relying on foreign labor and prospective foreign workers, as they redefine eligibility and access within Canada’s work permit system.

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Key Changes to Canada’s TFWP in 2024

The new TFWP regulations will require employers to meet stricter standards, particularly in business verification, wage levels, and low-wage hiring rules. Here’s an overview of the primary changes:

1. New Business Legitimacy Requirements (Effective October 28, 2024)

Employers must now prove their business legitimacy through registrations and agreements with provincial or territorial authorities, as opposed to using attestations from third-party professionals. This shift aims to minimize fraud by ensuring that only legitimate businesses hire foreign workers. Non-compliant businesses will lose access to the TFWP, affecting those dependent on international talent.

2. Higher Wage Requirements for High-Wage Stream Jobs (Effective November 8, 2024)

Employers hiring under the high-wage stream must offer wages at least 20% above the median provincial wage. Depending on the location, this could mean an increase of $5–$8 per hour. This rule seeks to make hiring Canadian workers more attractive by reducing cost-competitiveness of foreign labor. An estimated 34,000 positions are expected to shift from the high-wage stream to the low-wage stream, with around 20,000 fewer approvals overall under the TFWP.

3. Stricter Rules for Low-Wage Stream Employers

Employers in the low-wage stream must now provide adequate housing, arrange return transportation, and exhaust recruitment efforts for Canadian workers before hiring from abroad. Businesses in non-essential industries can fill a maximum of 10% of positions with foreign workers, with some exceptions in high-demand sectors like healthcare and agriculture. In areas with high unemployment rates, applications for low-wage jobs may not be processed to prioritize local hiring.

Prime Minister Justin Trudeau held a press conference on Parliament Hill in Ottawa on Thursday, October 24, 2024. (Photo by Sean Kilpatrick / The Canadian Press)

Labor Market Context: Why Canada is Reforming the TFWP

These updates align with Canada’s broader goals of reducing unemployment and improving access to job opportunities for underrepresented groups. Current statistics highlight why domestic hiring is a priority:

• Youth Unemployment: Youth unemployment in Canada was 13.5% as of September 2024, well above the national average of 6.5%. These changes aim to increase job opportunities for younger Canadians.
• Indigenous Workers: In 2023, Indigenous people faced an unemployment rate of 7.7%, compared to 4.5% for non-Indigenous Canadians aged 25–54.
• People with Disabilities: Employment among Canadians with disabilities was 65.1% in 2022, compared to 80.1% among those without disabilities. By reducing reliance on foreign labor, the government hopes employers will consider these underutilized groups.

Implications for Employers and Foreign Workers

The TFWP reforms will have broad impacts across various sectors, especially for employers reliant on foreign labor.

1. Increased Costs for High-Wage Stream Employers

Businesses in the high-wage stream will need to adjust wages to meet new requirements, which may affect profitability, particularly in cost-sensitive sectors.

2. Limited Access for Low-Wage Stream Employers

Employers in low-wage sectors, such as retail and hospitality, will face tougher restrictions on hiring foreign labor. Those in regions with high unemployment may not be able to use the TFWP at all, potentially reshaping hiring strategies.

3. Greater Focus on Domestic Hiring

These reforms are designed to push employers toward hiring Canadian workers, especially from underrepresented communities. By tightening wage requirements and restricting foreign labor access, the government aims to integrate more youth, Indigenous people, and those with disabilities into the workforce.

Conclusion

Canada’s upcoming TFWP reforms, effective in late 2024, mark a pivotal shift in the country’s labor market approach. By prioritizing Canadian hiring, increasing wage requirements, and enforcing stricter compliance, the government aims to create a fairer, more balanced labor market. For foreign workers, this means fewer low-wage opportunities under the TFWP, while businesses will need to adapt to new compliance demands and prioritize domestic hiring.

Staying informed on these changes is essential for both employers and prospective workers looking to navigate Canada’s evolving work permit system successfully.