Prime Minister Justin Trudeau has announced significant changes to Canada’s temporary foreign worker (TFW) program, aiming to reduce the number of TFWs in response to rising unemployment among newcomers and young Canadians. This decision is part of a broader review of Canada’s immigration policies as the government seeks to balance economic needs with fair employment practices.

New Measures to Limit Temporary Foreign Workers

Speaking at the federal cabinet retreat in Halifax, Trudeau outlined new measures to restrict the use of low-wage TFWs, particularly in regions with high unemployment rates. Under the new rules, employers in areas where unemployment exceeds 6% will face tighter restrictions on hiring low-wage TFWs. The exceptions to this rule include critical sectors such as agriculture, food processing, construction, and healthcare, where labor shortages are acute.

In addition to geographic restrictions, the government will cap the number of TFWs at 10% of an employer’s total workforce. Furthermore, low-wage TFW contracts will be limited to one year, reduced from the current two-year terms.

“We need Canadian businesses to invest in training and technology, not rely heavily on low-cost foreign labor,” Trudeau said. “This isn’t fair to Canadians struggling to find good jobs, and it’s not fair to those temporary foreign workers, some of whom face mistreatment and exploitation.”

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Impact on Unemployment and Housing

The changes come as Canada faces increasing unemployment rates among certain demographic groups. According to the Bank of Canada’s recent monetary report, the unemployment rate for newcomers stands at 11.6%, significantly higher than the overall unemployment rate of 6.4%. The youth unemployment rate, covering those aged 15 to 24, is even more concerning at 13.5%, marking the highest level in a decade.

Employment Minister Randy Boissonnault noted that the influx of low-wage TFWs, which grew from 15,817 in 2016 to 83,654 in 2023, has exacerbated job market challenges. The new measures are expected to reduce the number of low-wage TFWs by about 65,000, bringing figures closer to pre-pandemic levels.

Housing Minister Sean Fraser, who was immigration minister when the TFW regulations were relaxed in 2022, emphasized that curbing the TFW program could also help ease housing pressures, especially in the affordable housing sector. “We anticipate that these changes will reduce pressure on tens of thousands of housing units across the country,” Fraser said.

Government to Review Permanent Resident Levels

In addition to adjustments to the TFW program, Trudeau hinted at the possibility of reducing the number of permanent residents Canada admits each year. The current immigration plan, published last year, projected the admission of approximately 485,000 permanent residents in 2024 and 500,000 in both 2025 and 2026. With the newcomer unemployment rate nearly doubling since then, the government is reconsidering these targets.

“We’ll be looking at unemployment rates and opportunities to make further adjustments over the course of this fall,” Trudeau explained. “Our goal is to ensure that Canada’s immigration system is both fair and responsive to the realities of our economy.”
Immigration Minister Marc Miller supported this view, stating that “all options are on the table” and that the government is willing to adjust immigration levels based on economic and social needs.

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Reactions to the New Immigration Policies

The announcement has drawn mixed reactions from various stakeholders. Conservative Deputy Leader Melissa Lantsman criticized the government’s decision, describing it as a retreat from former immigration minister Sean Fraser’s policies. “This is a clear sign that the government is walking back the disastrous policies that have harmed our immigration system and contributed to the housing crisis,” Lantsman said.

Conversely, migrant rights organizations expressed concern that reducing TFW numbers might unfairly scapegoat foreign workers for broader economic issues. Syed Hussan, Executive Director of the Migrant Workers Alliance for Change, argued that “high unemployment, low wages, and unaffordable housing are not caused by immigrants and migrants. These issues stem from employer exploitation and policy failures.”

Economic experts like Mike Moffatt from the Smart Prosperity Institute have welcomed the changes but believe more needs to be done. “Reducing low-wage TFWs is a great first step, but we also need to address other aspects of the program to ensure Canadian workers have priority access to available jobs,” Moffatt suggested.

Future of Canada’s Immigration Policy

As Canada gears up to release a new immigration levels plan this fall, the government is weighing multiple factors to create a sustainable and inclusive policy framework. Trudeau emphasized the importance of finding a balance that supports economic growth while providing fair opportunities for all residents, both new and established.

“We are committed to making sure that Canada’s immigration system is positive and responsible,” Trudeau said. “We need to ensure pathways to success for everyone who comes to Canada, and that requires careful planning and adjustments.”

As discussions continue at the federal level, the coming months will likely see further changes to Canada’s immigration landscape, reflecting the government’s efforts to address both immediate economic concerns and long-term societal goals.