Canada cuts foreign worker program

Canada to Scale Back Foreign Worker Program

Number of Temporary Foreign Workers Permitted Cut in Half

OTTAWA—The Canadian government announced sweeping plans to make it harder for companies to hire temporary workers from abroad, in a move that businesses in the country's resource-rich west have said will curb their ability to grow.

The Canadian public has often criticized the popular temporary foreign worker program as a way for companies to replace locals with cheap foreign labor, something the Canadian government has sought to address at a time when it has also been overhauling an immigration system long seen as a global benchmark.

Among the changes to the program, under which foreign workers are brought in to temporarily fill vacancies, Ottawa is curbing the overall number of such workers, halving the time they can spend here and making an application more expensive.

The temporary foreign worker program—which officials said is used by about 25,000 employers—is particularly popular in Western Canada, where unemployment is low and businesses say it is difficult to find Canadians to fill lower-paying jobs, from truck drivers to laborers.

Friday's changes come two months after Ottawa barred fast-food restaurants fromhiring temporary foreign workers, after a public outcry over alleged abuses. That measure was lifted along with the reforms unveiled on Friday. Complaints about the program ratcheted up in April, amid media coverage of two restaurant workers in Saskatchewan who alleged they had lost their jobs to foreign workers. McDonald's Corp. franchises in British Columbia and Alberta also faced sharp criticism for hiring foreign workers.

The aim is "that the temporary foreign worker program is only used as a last and limited resort," Employment Minister Jason Kenney said at a news conference. "That Canadians always come first, that employers redouble their efforts to hire Canadians for available jobs, and to ensure that this program works in the best interests of the Canadian economy."

From now on, no more than 30% of a workforce at any particular work site will be allowed to be made up of low-wage temporary foreign workers. The cap will be lowered to 20% in 2015, and 10% in 2016, and Ottawa may reduce it further in the future, the government said.

Mr. Kenney said the phased-in cap would make the adjustment costs "manageable" for businesses. He said the impact would be "meaningful" but "not devastating."

In areas of high unemployment—6% or higher, according to the government—employers in the food services, accommodation and retail sectors will be barred from using the program to fill the lowest-wage positions. Ottawa said these are typically entry-level jobs for young Canadians, and should be preserved for unemployed Canadians where there is no evidence of a labor shortage.

The government also said it plans to slash the time a temporary worker can work in Canada to two years from four years.

The processing fee for each worker will be increased to 1,000 Canadian dollars (US$924), almost quadruple the current C$275.

Employers who do not comply with the rules face fines up to C$100,000, and may be banned from hiring foreign workers, the government said.

Business groups criticized the measures. "I think this is the single worst decision the federal government has ever made," said Dan Kelly, president of the Canadian Federation of Independent Business.

Garth Whyte, president and chief executive of Restaurants Canada, a lobby group for restaurants across the country, said labor shortages are already a major concern for one-third of the group's members, and the new changes will make it even tougher for them to get workers.

For decades, Canada has been seen around the world as a country that attracts large numbers of foreign workers and immigrants and largely succeeds in integrating them into wider society. But in recent years, Canadians have begun to complain more, while statistics show that incoming generations of immigrants are faring less well in job markets than preceding waves, compared with locals. With this in mind, Mr. Kenney has led a revamp of the system, implementing stricter language and placing tougher qualification demands on applicants than before.