The temporary foreign worker program has been maligned for putting upward pressure on rents and housing demand, but some aren't buying it
Canada’s small and medium-sized enterprises (SMEs) are sounding the alarm over Ottawa’s latest restrictions to the Temporary Foreign Worker Program (TFWP), warning that the changes could exacerbate already persistent labour shortages and threaten the viability of businesses across key sectors.
The 2024 policy changes—capping low-wage TFW positions at 10% of a company’s workforce, raising wage thresholds for high-wage roles, and refusing to process applications in regions with unemployment above 6%—have left many SMEs scrambling.
“The narrative around the temporary foreign worker program has totally lost the plot over the past few months,” said Dan Kelly, president of the Canadian Federation of Independent Business (CFIB).
“Vilifying the businesses that need TFWs to fill the positions that Canadians don’t want does nothing to address program gaps, nor tackle the real issues weighing down our economy.”
TFWs aren't taking jobs from Canadians, CFIB says
The CFIB said TFWs currently account for less than 1% of Canada’s labour force, with only 13% of small businesses facing shortages even attempted to use the TFWP in the past two years.
“Small business owners turn to the TFWP out of necessity, not convenience,” the report stated. The process is “lengthy, costly, and highly regulated.”
Employers must prove they have exhausted all local recruitment options before hiring a TFW.
“Temporary foreign workers do not compete with Canadian labour, they complement it,” the report said.
Fifty-two percent (52%) of SMEs using the program said TFWs enabled them to keep employing Canadians, and 76% said they helped meet customer demand.
Are housing fears overstated?
A common criticism of the TFW program is that it adds upward pressure to Canadian rent and housing prices, especially in bigger cities like Toronto and Vancouver, by spiking demand and allowing investors to charge bloated prices for rent.
It even helped prop up Toronto's tiny-condo market, with temporary foreign workers and international students some of the main sources of demand for rental units in the city.
But the CFIB snapshot challenges the idea that TFWs drive down wages or strain housing. Most TFWs are paid the same as Canadians, with only 3.5% earning less. ESDC’s own evaluation found “no evidence pointing to a risk for job displacement or wage suppression at the national level in Canada.”
On housing, the report notes that many TFWs live in employer-provided accommodations, particularly in rural areas. “A large share of TFWs live in rural areas which do not face the same housing pressures as urban centres,” the report said.
Immigration, productivity, and the mortgage sector
Recent analysis from CIBC’s Benjamin Tal suggests that Canada’s economic growth will not be derailed by lower immigration targets, as the quality and economic contribution of new permanent residents—many with Canadian experience—has increased.
“The economic contribution of the 395,000 new permanent residents is notably higher than it was in the past,” Tal wrote.
This shift may help offset concerns about housing and labour market strain, particularly as many TFWs transition to permanent residency and fill persistent gaps in construction and manufacturing.
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