This article was originally published in HR Matters, a publication of CPHR Manitoba.
In late 2023 and early 2024, the federal and provincial governments realized that a housing shortage, arguably decades in the making, was causing difficulties for Canadians. In a partial response to this issue, the Canadian government announced tighter immigration policies designed at restricting the number of foreign nationals who could live, work, study and immigrate to Canada.
In addition to housing, the government cited difficulties Canadian governments were having in keeping up with the growing demand for social programs, housing and other infrastructure that an increasing population was bringing.
A hard look at the Canadian numbers
This rapid shift in immigration policy has altered the landscape for employers of immigrants in Canada. Just 18 months ago, the federal government planned for much higher immigration targets. Looking at earlier targets on the Government of Canada website that were released in late 2023, we see the 2024- 2026 immigration projections of the government of Canada were as follows:
- 485,000 immigrants in 2024
- 500,000 in 2025
- 500,000 in 2026
However, the revised 2025-2027 targets on the latest Government of Canada website, released in 2024, reflect a substantial reduction:
- 395,000 immigrants in 2025
- 380,000 in 2026
- 365,000 in 2027
Additionally, the government aims to limit temporary residents to just 5% of Canada’s total population by the end of 2026. These restrictions are making it more challenging for employers looking to hire foreign nationals.
What are the challenges for employers of temporary foreign workers?
The reduction in immigration levels is coupled with stricter policies affecting temporary residents have made hiring temporary foreign workers more difficult. Key challenges that employers will face in the years to come include:
- Tightened work permit policies: In the past 18 months, policies that allowed certain foreign national to apply for work permits in Canada have been changed, restricted or revoked. Employers are now facing processes that are more cumbersome and strict. Increasingly, these programs only allow for the hiring of temporary foreign workers for shorter periods of time. This makes recruiting and retaining temporary foreign workers more challenging.These challenges mean that employers will have to re-assess their temporary foreign worker strategy. If an employer can no longer access immigration programs because of a change in criteria, employers will need to look to other programs to fill their work place needs.
- Stricter post-graduate work permits: Language requirements and field of study restrictions have been introduced, making it harder for international graduates to secure work permits for employment in Canada. International graduates have been one of the main sources of employees all across Canada. As program changes reduce the number of persons who will be able to obtain these work permits, employers will find that the pool of talented international students will be smaller over the next few years.As a result, employers who have relied on international students will have to adjust to this new reality. Will more domestic recruitment be necessary? Can employers tap demographic groups in Canada for employment who are underrepresented in the work force? Will wage and benefit packages have to become more attractive? Will implementing innovation changes and AI be the key? Should on-the-job training be pursued to upskill existing workers? These are the types of issues that employers will have to address to maintain productivity if the supply of employees shrinks.
- A reduction in the ability to transition from the Temporary Foreign Worker Program (TFWP) to permanent residency: Changes to various permanent residency programs coupled with a decrease in available permanent residency spots have made it more difficult for temporary workers to transition to permanent residency. Prior to 2023, virtually all temporary foreign workers who worked in Manitoba for six months to one year with full-time, permanent job offers obtained permanent residency in Manitoba. Now, many of these foreign workers are finding that there is no path to permanent residency.
When employers now hire temporary foreign workers they will have to do at least two things.
- First, employers will need to determine whether they are hiring temporary foreign workers for projects with defined end dates or whether for permanent long term positions. If a business is hiring temporary foreign workers for time-limited projects, obtaining work permits for these employees will depend on the length of the work permit that can be obtained.
- Second, if the intention is to hire a permanent employee, employers will have to look at the viability of permanent residency options before a work permit is applied for. In some cases, employers will have to use direct-to-permanent residency programs in which work permits are expressly used as a transitional process to permanent residency.
As the federal and provincial governments continue to refine their approaches to immigration, employers will need to adapt to a job market that will see fewer temporary residents being available to work in Canada.
Jessica Jensen, Reis Pagtakhan and Patricia Bagnas are Canada-based immigration lawyers who offer corporate immigration services to a variety of companies, big and small, across various industries in Canada and the U.S. Contact the MLT Aikins immigration team today.
Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that these materials are not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.
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