Finding Solutions for a Successful Future: Tackling Canada’s Labour Shortages by Improving Our Immigration System

Laura Schemitsch, Canadian Immigration & Refugee Lawyer, Heron Law Offices

Canada is currently facing a serious labour shortage and challenges surrounding access to affordable housing which threaten its economic longevity, social well-being and prosperity. According to Statistics Canada, the “unemployment-to-job vacancy ratio in Canada is at a historical low, amid a record tight labour market.” The unemployment-to-job vacancy ratio has decreased in every province since 2020 and is the lowest in Quebec and British Columbia.

The Government of Canada has acknowledged that “immigration is critical to Canada’s long-term success” with plans to allow up to 500,000 newcomers annually by 2025. Unfortunately, it is not uncommon for immigrants to become the scapegoats when concerns over housing enter the mainstream conversation. In June 2023, CBC News reported that immigration advocates and housing experts say criticism of newcomers as the cause of a housing crisis is “misguided” and instead “point to the federal government for setting large targets while failing to ensure the infrastructure needed to support population growth.” In support of this position, a recent report by Desjardins’ Senior Director of Canadian Economics, argues that Canada needs even more immigrants to counter its aging population and the federal government must “marry immigration policy with immediate action to increase the housing supply.” With growing suggestions that Canada’s housing crisis means immigration needs to slow down, Canada needs to improve its immigration system to facilitate the entry of immigrants that it needs to resolve the labour shortage and increase the housing supply in support of Canada’s long term prosperity.

As Canada faces ongoing processing delays caused by the COVID-19 pandemic, a growing housing crisis and high costs of living, the Government has made several recent announcements in an effort to attract more immigrants to Canada and make it easier for employers to hire temporary foreign workers. While some of the Government’s attempts to improve the Temporary Foreign Worker Program (TFWP) are welcome, there is certainly room for improvement and expansion as discussed below.

Improving the LMIA Process through the Recognized Employer Pilot (REP) and Recommendations for Further Improvement

Most employers need a positive Labour Market Impact Assessment (LMIA) before they can submit a work permit application to hire a temporary foreign worker. The LMIA process is complex, lengthy and expensive. The non-refundable government processing fee per worker is $1000 and many businesses will need the assistance of an immigration lawyer to navigate the process and employer compliance rules.

According to Employment and Social Development Canada (‘ESDC’), the TFWP allows Canadian employers to hire foreign workers to fill temporary jobs when qualified Canadians and permanent residents are not available. LMIAs are regulated in accordance with the Immigration and Refugee Protection Act (‘Act’) and the Immigration and Refugee Protection Regulations (‘Regulations’).

ESDC offers the following guidance on the TFWP and LMIA process:

Employment and Social Development Canada (ESDC), through its Service Canada processing centres, assesses applications from employers requesting permission to hire temporary foreign workers and conducts Labour Market Impact Assessments to determine the likely effect these workers would have on the Canadian labour market. The Program assesses the impact by looking at available labour market information for the region and the occupation, the employers’ recruitment and advertisement efforts, wages and working conditions, labour shortages and the transfer of skills and knowledge to Canadians. In addition, Service Canada responds to questions about the Program through Employer Contact Centres and via the Internet.

ESDC works closely with IRCC, the CBSA and the provinces and territories, through appropriate information sharing agreements, to monitor and share information that has an impact on the integrity of the TFW Program. The program is led by IRCC. Service Canada conducts inspections for the TFW Program.

While the original intent behind the LMIA process ensured that Canadians and permanent residents have opportunities to access jobs before temporary foreign workers, the reality of the situation is that Canada needs more semi-skilled and skilled immigrants including skilled tradespeople to counter its aging population and boost the housing supply to facilitate economic and social longevity.

On August 8, 2023, ESDC announced a temporary three-year initiative under the Temporary Foreign Worker Program (TFWP) to address Canada’s ongoing labour shortages. The Minister of Employment, Workforce Development and Official Languages, Randy Boissonnault, launched the Recognized Employer Pilot (REP), which was first announced in Budget 2022. Under the REP, eligible employers can obtain Labour Market Impact Assessments (LMIAs) that are valid for up to 36 months and will also benefit from a simplified LMIA application if they need to hire additional workers in the same occupation during the three-year pilot. The pilot is a welcome announcement, however, there is room for improvement and expansion.

To participate in REP, employers must have a minimum of three (3) positive LMIAs for the same occupation over the past five years from a list of occupations that have been designated as in-shortage and supported using Canadian Occupational Projection System (COPS) data. REP will be rolled out in two stages and applications for both streams will be accepted until September 2024:

  • Stage one begins in September 2023, when employers in the Primary Agriculture stream will be able to apply in time for the 2024 season.
  • Stage two begins in January 2024 and opens intake to all other industry sectors.

According to ESDC, the assessment of a REP application will be based on the employer’s history of compliance with the TFW program and how often they use the Program to fill in-demand occupations. Global Talent Stream occupations have been removed from the REP because they already benefit from expedited LMIA processing.

While the REP pilot will certainly benefit some employers with a positive history in the system, the REP fails to address one of the major issues with the LMIA system, namely, it disproportionately impacts small to mid-size businesses in Canada facing labour shortages. First, a company who has previously received at least three positive LMIAs has likely had the financial resources to apply. Second, many businesses have identified labour shortages in the past several years. Small to mid-size business who have experienced ongoing labour shortages since the COVID-19 pandemic are disproportionately negatively impacted when they are unable to hire the foreign workers they need to support their business’ growth and development due to a complex and expensive system. I recommend that ESDC considers new ways to facilitate more equitable access to expedited LMIA processing for businesses without the required history of program compliance and more affordable LMIA processing based on revenue scales. Making the process to access necessary TFWs easier, particularly in the construction and health sectors, will undoubtedly benefit Canada and help to marry immigration policy with housing policy as recommended by this country’s leading economic experts.

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