HR Challenged by Canada’s Temporary Foreign Worker Program Overhaul

By Catherine Skrzypinski Jul 22, 2014

The Canadian government announced a series of reforms in June 2014 to its Temporary Foreign Worker Program (TFWP). Immigration experts say it will make the process more difficult and expensive for companies to hire employees who are not Canadian citizens or permanent residents.

Going forward, employers who hire temporary foreign workers must promise not to lay off any Canadian workers or cut their hours, said Employment Minister Jason Kenney. Employers must also report to the government how many Canadians applied and were interviewed for jobs.

“[The federal government] will ensure employers redouble their efforts to hire Canadians,” Kenney added.

As a result, the TFWP is now divided into two distinct schemes. The International Mobility Program, run by Citizenship and Immigration Canada, will focus on highly skilled workers coming to Canada through international trade agreements, such as the North American Free Trade Agreement, as well as those at the executive level. Specialized workers entering Canada may be restricted by the new regulations, explained Jonathan Leebosh, partner at Egan Business Immigration Lawyers in Vancouver.

“Employees can’t simply ‘parachute’ into client sites anymore,” added Phil Tremblay, country manager, Canada at global immigration firm Emigra in Toronto. “It will be tough [for companies] to get intracompany transfers for those with specialized knowledge.”

The other scheme revises the temporary worker program, managed by Employment and Social Development Canada (ESDC). Going forward, Canadian employers need to obtain government approval before hiring a foreign worker with a Labour Market Impact Assessment (LMIA).

Employers seeking an LMIA will face increased restrictions, more in-depth requirements, and enhanced inspections and punishment if they do not follow the rules, Kenney said.

“We will better prevent and detect abuse, and penalize employers who abuse the program,” Kenney added. “We’ll better protect foreign workers, and we’ll also recognize that Canada benefits from international mobility.”

Longer, Costly Process

Immigration experts say the TFWP changes will have a direct impact on the human resources profession in Canada, as it will take more time and money to prepare paperwork for a non-Canadian high-wage candidate.

The overhaul of the TFWP “shows the federal government’s mistrust of Canadian employers,” said Gilda Villaran, partner at Fasken Martineau in Montreal. “Employers affected now have limited choices.”

HR practitioners are now required to fill out an Employer Transition Plan—in addition to an LMIA—for high-wage temporary foreign workers who earn above the provincial or territorial median hourly wage, Leebosh noted.

The maximum work permit length for high-wage workers who meet or exceed provincial median wages may also be reduced to two years, but the time frame has not been formally implemented.

“It’s wise [for HR professionals] to hold on to a transition plan, along with other important documentation for foreign workers, for up to six years,” Leebosh said. “You now need to keep a close eye on your entire workforce.”

The transition plan’s objective is to reduce employers’ reliance on the TFWP, Tremblay added.

In addition, the LMIA fee for each application has increased from $275 to $1,000 Canadian, effective immediately.

Tremblay stated if Canadian companies fail to comply, they will face consequences:

  • One in four employers who tap into the TFWP will be inspected by the Canadian government. Inspectors have the right to scrutinize and photocopy documents, and interview HR professionals and senior management about the company’s hiring practices.
  • Employers found breaking TFWP rules will be fined up to $100,000 Canadian, starting in fall 2014.
  • Employers who have been suspended from the TFWP will be disclosed on the ESDC website.

Under Pressure

Immigration experts say they have already faced backlogs and delays because of the TFWP overhaul, in addition to questions going unanswered by the federal government.

Legal practitioners are finding concerns with the updated forms like the LMIA and the transition plan, Leebosh explained. “We need to list the number of Canadians who applied, the number of candidates we interviewed, and why they were not qualified,” he said. “Isn’t that discrimination?”

But the biggest impact may be felt within a company, Leebosh continued, as a management team may put pressure on HR to hire the right candidate, regardless of whether he or she is Canadian or a foreign national.

“This [revised TFWP] process is more complex, more time-consuming, and carries greater risk,” Villaran concluded. “It’s difficult enough to find talent.”

Catherine Skrzypinski is a freelance writer in Toronto.

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