The Rise and Fall of the Temporary Foreign Worker Program

The Temporary Foreign Worker Program (TFWP), also known as the Labour Market Impact Assessment (LMIA), started off with the best intention for the Canadian economy: to fill ongoing labour gaps and shortages with skilled and readily available foreign talent. 

*a key distinction here - TFWP is not to be confused with the International Mobility Program (IMP) which offers LMIA-exempt pathways for skilled workers. 

The TFWP applies to foreign workers both inside and outside of Canada. However, in my opinion, it is most effective for inland applicants for two key reasons:

1. Integration into the Canadian labour market: Workers already in Canada have Canadian work experience, which many employers prefer. They are also accustomed to local cultural norms and workplace etiquette.
   
   

2. Uninterrupted employment: Inland applications often allow for continued employment without disruption. In contrast, sponsoring a foreign worker from outside Canada can take at least eight months, even in the best-case scenario, before the worker is ready to start.

The TFWP was, and still is, a valuable tool for Canadian businesses to fill critical positions and combat high turnover rates.

And just like most things in life - something that starts off with the best intentions, eventually turns into something corrupt, driven by greed and the erosion of values that once made it meaningful.

So What Happened and How Did We Get Here? 

Before we dive into that, it’s important to understand what LMIA actually is. 

LMIA stands for Labour Market Impact Assessment - this application process evaluates the impact on the Canadian labour market if a Canadian business wishes to hire a foreign worker. 

The employer must show that the hiring the foreign worker will result in positive impacts on the Canadian labour market such as:

1. Exchange of skills and knowledge

2. Addressing immediate labour shortage

3. Creation of new job opportunities for Canadians

4. Dedicated long-term employment that prevents high turnovers 

5. Professional development and training opportunities for Canadian staff

The LMIA was designed to address critical labour shortages when Canadian businesses struggled to fill or retain essential positions. 

Unlike Canadian citizens and permanent residents, foreign workers tied to an LMIA have restricted mobility due to their work permits, which are tied to the sponsoring employer.

Where did Everything go Wrong? 

It’s not easy to pinpoint exactly where and when everything went sideways, but a good starting point would be in understanding the scoring system of Express Entry.

Under Express Entry, applicants with a valid LMIA-supported job offer could claim 50 or 200 additional CRS points, depending on their job’s TEER category. Senior-level managers and executives were awarded 200 points, while high and mid-level skilled workers received 50 points.

This policy was initially well-intentioned: it aimed to provide stability for employers and incentivize foreign workers who moved their lives to Canada to transition to permanent residence and contribute long-term to the Canadian labour market and economy.

With time, LMIA became a money-making scheme - many Canadian employers, recruiters and immigration ‘professionals’ made a great profit from charging foreign workers for the LMIA behind the scenes and off the books. 

By law, employers must cover the costs associated with hiring a foreign worker and cannot recover it back from them. This includes recruiter fees and LMIA service fees from immigration professionals. 

Eventually, this spiraled into widespread fraud which included:

• LMIAs being sold online for exorbitant prices ($10,000–$40,000 or more)

• Fake job offers from non-existent businesses

• Workers being asked to pay their own wages

• Workplace abuse and harassment

• Unacceptable working conditions

There is also another side to this narrative: the disruption in the Express Entry system with those claiming 200 points, inflating the cutoff CRS score and preventing thousands of eligible young professionals from receiving invitations to apply for permanent residence.

And while there were plenty of eligible candidates to claim 200 points based on their job offer in Canada, there were also plenty of others who exploited IRCC's loopholes to gain significant advantage.

Is there Hope?

Despite everything, I remain optimistic about the program's potential and integrity. There are still many honest Canadian employers who genuinely struggle to fill or retain employees in certain occupations.

Employee retention remains a critical challenge for businesses, and the TFWP addresses this through closed work permits, which tie foreign workers to their employers for the duration of their permits.

While the LMIA no longer awards additional CRS points in the Express Entry system, its original purpose of addressing labour shortages remains vital. 

If properly managed and regulated, the TFWP can continue to serve as a valuable tool for both businesses and workers.