Canada to reduce low-wage foreign workers. What will it mean for Indians?

Canada Prime Minister Justin Trudeau announced plans to bring down the influx of low-wage migrant workers, as the country deals with rapid population growth straining housing and public services

Canadian Prime Minister Justin Trudeau announced a significant policy decision on Monday, outlining plans to reduce the intake of low-wage, temporary foreign workers and permanent residents. It marks a shift from the program expansions introduced in 2022 as the government faces challenges in reducing the number of temporary residents.

This policy change comes as Canada deals with rapid population growth, which economists suggest is straining housing and public services, such as healthcare. Federal statistics indicate that approximately 97 per cent of last year’s population increase was driven by immigration.

“We’re reducing the number of low-wage, temporary foreign workers in Canada. The labour market has changed. Now is the time for our businesses to invest in Canadian workers and youth,” Trudeau announced in a post on X (formerly Twitter).

These adjustments are set to take effect on September 26.

What is the temporary work programme in Canada?

The temporary foreign worker program allows non-Canadians to work in the country for limited periods to address labour shortages. This program has expanded significantly but has faced criticism for depressing wages and exposing workers to exploitation, partly due to the restrictions of permits that bind workers to specific employers.

Labour advocates and the UN have recently voiced concerns over the program. A UN report this month, labelled the program a “breeding ground for contemporary forms of slavery,” according to a BBC report.

The program’s growth has also been linked to loosened restrictions meant to address labour shortages following the Covid pandemic.

In 2023, approximately 183,820 temporary foreign worker permits were issued, a sharp 88 per cent rise compared to 2019, according to Employment and Social Development Canada (ESDC). The ESDC criticised some employers for leveraging the program to avoid hiring skilled Canadian workers, the British broadcaster noted.

As part of the new changes, work permits will be denied in regions where the unemployment rate is at or above 6 per cent, with exceptions for sectors like seasonal agriculture, construction, and healthcare.

Furthermore, employers will be limited to hiring low-wage temporary foreign workers as 10 per cent of their workforce, reduced from the current 20 per cent. 

Employment Minister Randy Boissonnault stated that, in combination with earlier reforms, these measures are expected to decrease the number of temporary foreign workers by 65,000.

How will the decision impact Indians in Canada?

According to estimates from the Indian Express, India contributed 26,495 temporary foreign workers to Canada in 2023 under the Temporary Foreign Worker Program (TFWP), making it one of the top ten countries of origin for these workers.

India was the leading source of international students in 2022, contributing 220,000 new students. However, recent data indicates a noticeable decline. Between July and October 2022, the Canadian government processed 146,000 new study permit applications, but during the same period in 2023, this number fell to just 87,000.

Meanwhile, Canada’s temporary resident population currently surpasses 2.5 million, representing 6.2 per cent of the total population. The government aims to bring this figure down to 5 per cent of the population, as reported by the BBC.

The Indian community in Canada has grown significantly in recent years. Between 2000 and 2020, the registered Indian population increased from 670,000 to over one million. By 2020, 1,021,356 registered Indians were living in Canada, IE said.

According to the Ministry of External Affairs, approximately 2.8 million Indians, including 1.8 million people of Indian origin, now reside in Canada.

Why is Canada closing its doors to immigrant workers?

Canada has reportedly been grappling with a severe housing crisis, with housing affordability emerging as a major concern, even surpassing other key issues like jobs and the economy. To address these concerns, the government started limiting international workers and students’ intake earlier this year.

Earlier this year, Canada imposed an immediate two-year cap on new international student visas to combat the housing crisis and tackle issues with certain institutions. In March 2024, Immigration Minister Marc Miller announced plans to reduce the number of temporary residents over the next three years, with the first cap scheduled for September.