Peter Csillag: Is ending the Temporary Foreign Worker Program a good idea?

Re-elected Conservative MP Jamil Jivani recently came forward with a petition calling for an end to Canada’s Temporary Foreign Worker Program, noting that it drives wages down and displaces Canadian workers.

Though it has existed since the 1970s, today’s challenges arise from two points of no return. First, the creation of a low-wage stream in 2002. Second, an aggressive deregulation of program safeguards in 2022 that the government attempted to walk back last autumn. In response to the Jivani petition, the Liberal government pointed to its attempted 2024 walkback, but the numbers show that it hasn’t worked as desired: the number of foreign workers actually still grew in the first quarter of 2025 compared to the same time last year.

Outright ending the program would be a significant departure from past reforms, one that would have a very uneven impact on different regions and sectors. A part of Canada’s productivity challenges arises from a difficult and persistent lack of skilled labour. Any move to shut the program down will have to meaningfully address these challenges, lest Canada fall even farther behind in its attempts to get major projects built.

Deep structural problems

The problems identified by MP Jivani ultimately stem from inherent problems in program design that draw into question whether it ultimately serves its intended purpose of filling short-term labour shortages when Canadians are unavailable.

Consider timelines. Government processing of the initial Labour Market Impact Assessment (LMIA), the initial assessment that there are no available Canadians, can take several months. The average LMIA processing time last month was 62 business days (just over two months).

Then there’s the time to actually find and hire workers, another time commitment of potentially weeks or months, depending on the profession, which ultimately leads to yet another wait, this time for government processing of the associated work permit application. This, too, could take weeks or months, depending on a variety of factors. Ultimately, the labour market conditions when an employer begins the process may be fundamentally different by the time foreign workers finally arrive.

In effect, this could mean that students unable to find summer jobs are being displaced by foreign workers filling an outdated vacancy from the previous autumn. It also means that as timelines lengthen, the program’s utility becomes increasingly less relevant for project-based jobs like those related to building infrastructure.

The LMIA system at the start of the process is ripe for abuse. There are accounts of fake LMIAs for fake jobs being sold at a steep premium. Broader program integrity is also in question as the government sees it fit to do workplace inspections remotely, while measures to detect bad actors are skipped, so applications can get processed faster.

If you’re a believer in the power of free markets to incentivize better outcomes and support human flourishing, the current TFW program is decisively the opposite, with a market-distorting wage-suppressant side-effect. A market response to businesses competing for a limited pool of skilled workers is to raise wages or benefits, raising the market value of in-demand professions. Thanks to the TFW program, an employer can hire at an average rate and opt out of market pressure to raise wages to attract labour. The prevailing wage requirement is meant to prevent foreign workers from being paid less than Canadian workers, but no mechanism addresses the market suppressant on wage growth.

In 2018, the Home Depot Foundation in the United States invested $50 million USD to train 20,000 workers for in-demand trades. There’s simply no real market incentive for a company to make a similar investment at that scale in Canada today. Further, the widespread use of foreign workers does not incentivize productivity-enhancing investments in technology that could otherwise have significant macroeconomic effects on our GDP per capita and overall competitiveness.

When the former Conservative government brought in substantive restrictions to the program in 2014, the overhaul framework explained, “over time many employers built their business model on the program.”

All of these problems are exacerbated by the International Mobility Program (IMP), which allows temporary foreign workers without any LMIA requirement at all. Technically a separate program than the TFW program from which it was carved out of a decade ago, it was intended for situations like intra-company transfers (e.g. a manager in an international company briefly goes to work on a project in their company’s Canadian office), or if a professor comes to teach for a term to a Canadian school. In practice, its actual use is more varied. While it includes higher-skilled professions, it also includes international students who are able to work. The IMP is far more responsible than the TFWP for Canada’s rapid and disproportionate growth in the temporary resident population. It is the program that enables the entry of foreign workers through study-related permits. Any discussion of program reform needs to address both the TFWP and components of the IMP.

Regional variables and vulnerable sectors

MP Jivani is right to identify the seasonal agriculture worker program (SAWP) for its importance to the agriculture sector and suggests it be exempt from his call to end the broader TFW program. SAWP is already unique with distinct and far more rigid parameters than the wider foreign worker program, though it comes with its own difficulties. To support the sector during harvest, it allows foreign workers with agricultural work backgrounds only from a narrow list of countries, to work on production in a narrow list of commodities, and only specifically in on-farm agricultural work.

However, agriculture is not the only sector that faces an existential challenge if left without access to foreign workers.

At the current moment, rattled by U.S. trade uncertainty, we seem to have achieved consensus that Canada needs to build major projects. This is wholly in jeopardy if there’s nobody to physically build it. Already, BuildForce Canada identifies a need for 380,500 additional construction workers between now and 2034.

In Western Canada, the tourism industry continues to be a growing economic driver, though seasonal in nature. To keep up with demand, the tourism industry in Alberta has a greater use of the TFW program relative to the general economy.

In Atlantic Canada, seafood processing uses temporary foreign labour despite periods of high regional unemployment. Part of the challenge in hiring locally, according to an industry analysis, is the difficulty of recruiting EI recipients with seasonal work histories, given the complexities of the employment insurance system.

If we’re to identify key sectors worthy of their own carve-out, parts of the SAWP criteria offer a starting point. Applied to other sectors, it could mean workers from countries with recognized professional certification and work experience to carry out specified responsibilities within specified parameters. Their past professional experience could be similar to the past earnings requirement used by the New Zealand, U.K., and Australian governments in their skilled permanent immigration points grids.^{1Unlike SAWP, other countries’ governments wouldn’t be involved in selection if this were to be considered for high-skilled sectors.}

If designed right, this could be a transition program for skilled workers towards permanency, a step that would restore Canada’s economic immigration footing instead of currently relying on a permanent underclass of temporary workers. For this, the federal government could consider serious IMP reform or bolstering underused immigration programs, such as the underutilized Federal Skilled Trades Program.

What could transition look like? 

In his 2018 book The Once and Future Worker, American policy analyst Oren Cass notes a question of priorities in the immigration debate: “If overall GDP growth is the goal, then all forms of immigration might make sense. If reducing consumer prices is the goal, then welcoming as many workers as possible might make sense. But if improving labor market outcomes for the nation’s less-skilled, lower-wage workers is the central objective, the economic case for unskilled immigration collapses.”

A question for government policymakers would be how to incentivize the private sector to make large-scale training investments for underemployed Canadians, and just as importantly, how to make in-demand professions appealing for young adults and underemployed Canadians? There’s no single answer given that needs would vary across regions and sectors.

There are international examples that serve as a useful start. Germany has a dual education system integrating school-based learning with work-based practice. Approximately 52 percent of young Germans complete dual vocational education and training apprenticeships, and in many instances, they are offered long-term positions at the same companies where they trained. It maintains the country’s status as an industrial powerhouse while proactively addressing youth unemployment. Adopting such an approach would mean a longer timeline to wind down the TFW program, transitioning employers only gradually away from the program to minimize economic disruption.

For regional priority sectors, the answer may be a provincial role. Last year, the Government of Alberta launched a program specifically to transition temporary foreign workers in the tourism and hospitality industry to permanent residency. To support the province’s ambitious tourism growth agenda, the program allows qualified candidates, foreign workers already living and working in Alberta with a job offer from an Alberta tourism and hospitality employer, to apply under the provincially nominated immigration stream.

The unique challenges facing different regions and sectors mean that ending the TFW program cannot be done overnight, and not without a clear path for training workers and addressing regional economic challenges. But after decades of the program swinging between a “more and faster” and “Canadians first” pendulum, only to be left with the same structural problems and displaced Canadian workers, the time to have this discussion is now.