 "Canada cracks down on foreign worker exploitation: New rules from Sept 26")
Canada is taking steps to tighten the rules around its Temporary Foreign Worker (TFW) Programme, particularly for low-wage positions. Prime Minister Justin Trudeau has announced that starting September 26, 2024, businesses will only be allowed to fill up to 10% of their workforce with low-wage foreign workers, down from the previous 20%. This change marks a shift from 2022 when the cap was raised to help businesses deal with labour shortages during the Covid-19 pandemic.
Why is Canada limiting foreign workers?
The decision to limit the number of low-wage foreign workers comes in response to rising unemployment rates in Canada. The overall unemployment rate has climbed to 6.4%, with the rate for younger workers reaching 14.2% — the highest it’s been in over a decade, outside of the pandemic period, according to Canada's Ministry of Employment, Workforce Development and Official Languages. At the same time, the TFW Programme has nearly doubled in size between 2021 and 2023, with 240,000 permits issued last year alone. Many of these positions are in sectors like restaurants and retail, where job opportunities are plentiful but wages are often low. Moreover, the programme has been accused of 'breeding slavery'.
What is the Temporary Foreign Worker (TFW) Programme?
The TFW Programme is meant to be a temporary solution for businesses that can’t find qualified Canadian workers to fill job vacancies. It allows companies to hire foreign workers on a short-term basis, typically for up to two years. However, businesses must demonstrate that they’ve made efforts to hire Canadians first before being allowed to bring in foreign workers.
What changes are being made?
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In response to concerns about misuse and fraud within the TFW Programme and other factors, the Canadian government has introduced several new restrictions:
Processing limits: Labour Market Impact Assessments (LMIAs) for the Low-Wage stream won’t be processed in regions where the unemployment rate is 6% or higher. Exceptions will be made for specific sectors like agriculture, food processing, healthcare, and construction.
Cap on foreign workers: Employers can now only hire up to 10% of their workforce through the TFW Programme for low-wage positions, a reduction from the previous 20%. Again, certain sectors like agriculture and healthcare are exempt from this rule.
Shorter employment duration: The maximum period of employment for workers hired through the Low-Wage stream has been reduced to one year, down from two years.
“The Temporary Foreign Worker programme was designed to address labour market shortages when qualified Canadians were not able to fill those roles. Right now, we know that there are more Canadians qualified to fill open positions. The changes we are making today will prioritise Canadian workers and ensure Canadians can trust the programme is meeting the needs of our economy," said Randy Boissonnault, Minister of Employment, Workforce Development and Official Languages in a press release.
How much do low-wage foreign workers earn?
Wages for low-wage foreign workers in Canada depend on the province, industry, and specific job. As of 2024, these rates typically range from about CAD 13 (Rs 809) to CAD 16 (Rs 996) per hour, depending on the region, according to Canada's Minimum Wage Database. Here are some examples:
Ontario: As of 2024, the minimum wage is CAD 16.55 per hour and is set to increase to CAD 17.20 per hour on October 1, 2024.
Alberta: The minimum wage remains at CAD 15.00 per hour.
British Columbia: The minimum wage is CAD 17.40 per hour, effective from June 1, 2024.
Manitoba: The minimum wage is CAD 15.30 per hour, with a planned increase to CAD 15.80 in October 2024.
Nunavut: The highest minimum wage in the country, at CAD 19.00 per hour as of January 1, 2024.
Wages can vary slightly depending on the industry, with agricultural workers, hospitality staff, and retail employees often falling on the lower end of the pay scale. Additionally, low-wage foreign workers are entitled to the same labour rights as Canadian citizens, including overtime pay and holiday pay, although enforcement can be inconsistent, as has been cemented in a report published by the United Nations on July 22, 2024.
This is slightly higher than in the US but lower than in countries like the United Kingdom, New Zealand, and Australia:
United States
Federal minimum wage: $7.25 (Rs 608) per hour
Australia
National minimum wage: Approximately $15 (Rs 1,260) per hour
United Kingdom
National living wage (for workers aged 23 and over): Approximately $13.85 (Rs 1,162) per hour
New Zealand
Adult minimum wage: Approximately $14.02 (Rs 1,175) per hour
Why is the programme controversial?
The TFW Programme has faced criticism for creating conditions that allow for worker exploitation. A report by UN investigator Tomoya Obokata described the programme as a "breeding ground for contemporary forms of slavery," citing issues like underpayment, wage theft, excessive work hours, and even sexual harassment.
"The special rapporteur retains the view that the temporary foreign worker programme serves as a breeding ground for contemporary forms of slavery, as it institutionalises asymmetries of power that favour employers and prevent workers from exercising their rights,” said Obokata in his final report. The report highlighted various abuses, including physical, emotional, and verbal abuse, as well as the confiscation of documents and arbitrary reductions in working hours.
What about Indian workers?
The number of temporary foreign workers in low-wage positions across Canada has been increasing, many of these workers coming from India. The Canadian government issued a large number of work permits to Indian nationals, contributing to the growing presence of Indian workers in low-wage jobs in Canada.
Media reports say India contributed 26,495 temporary foreign workers to Canada in 2023 under the TFWP, making it one of the top ten countries of origin for these workers.
However, at the time of writing this report, Business Standard's query to the press secretary at the Office of the Minister of Employment, Workforce Development and Official Languages regarding the exact number of Indians in Canada under the Temporary Foreign Worker programme remained unanswered.