Ontario declines federal offer to expand temporary foreign worker hiring in rural areas

Ontario has decided not to participate in a federal initiative that would allow rural employers to hire a greater proportion of temporary foreign workers for low-wage positions. The decision comes as the federal government seeks to address acute labour shortages in rural communities by permitting an increase in the cap on temporary foreign workers from 10 per cent to 15 per cent of an employer’s workforce, effective April 1, 2024, through March 2027.

The federal measures, announced in March, require provincial and territorial governments to opt in. As of late June, British Columbia, Quebec, Manitoba, New Brunswick, Newfoundland and Labrador, and Nova Scotia have agreed to participate in some or all aspects of the program. Alberta and Nunavut have declined, while other provinces are yet to decide. British Columbia is partially participating, permitting retention of existing foreign workers above the cap, while the other aforementioned provinces have fully opted in.

Ontario’s Labour and Immigration Minister, David Piccini, outlined the province’s position in a letter to federal Jobs Minister Patty Hajdu on June 27. Piccini cited Ontario’s youth unemployment rate, which he said exceeds 15 per cent, as a principal reason for declining the offer. He argued that "the rapid expansion of the Temporary Foreign Worker Program (TFWP) has had a clear and damaging impact on opportunities for Ontario workers, particularly young people looking to get their start in the workforce."

Piccini stated that the solution to filling in-demand jobs is not to expand access to low-wage temporary foreign workers, but rather to ensure Ontario workers have the skills and opportunities needed to succeed. He asserted, "Ontario businesses are well positioned to recruit, train and retain the many young people who are available and eager to work, and our focus should be on helping them succeed before expanding access to temporary foreign labour."

The federal government’s changes to the TFWP follow a period of increased scrutiny and adjustment. In 2022, as pandemic restrictions eased and vacancies rose, the cap on low-wage foreign worker positions was temporarily raised to 30 per cent, then scaled back to 20 per cent, and is now at 10 per cent for most sectors. Sectors facing chronic labour shortages, such as health care, construction, and food processing, retain a 20 per cent cap. The most recent federal measures permit rural employers, in participating provinces, to hire up to 15 per cent of their low-wage workforce from the TFWP, or to retain existing higher shares above the cap if they already exceed it.

Piccini’s letter to Hajdu emphasized that for youth, jobs in sectors such as food service and retail are often a first step into the workforce. He said the government would continue to invest in training, apprenticeships, and permanent immigration pathways—such as the Ontario Immigrant Nominee Program and regional economic development through immigration—to help employers fill in-demand jobs and attract skilled workers to rural communities, while protecting local workers.

The federal government has indicated that the TFWP is intended as a last resort, to be used only when qualified Canadians and permanent residents are unavailable. Employment and Social Development Canada allocates $925 million annually to Ontario through Labour Market Development Agreements, including support for more than 88,000 youth, and provided a recent $228.8 million top-up to support retraining and skills upgrading for up to 27,000 workers. In a statement, Minister Hajdu’s office said, "Canadians are always first in line when it comes to jobs. The Temporary Foreign Worker Program is an extraordinary, last resort measure, used to fill critical employment gaps, when qualified Canadians and permanent residents are not able to fill job vacancies."

Business associations and advocacy groups have expressed concern about Ontario’s decision. Dan Kelly, president of the Canadian Federation of Independent Business (CFIB), described the move as political rather than practical, stating, "There is almost no evidence to suggest that youth employment is being negatively affected by the number of temporary foreign workers that live in Ontario." Kelly argued that small businesses are not choosing TFWs over local youth, but often cannot attract Canadians to certain jobs, particularly in rural and remote locations. He cited reluctance among youth to seek jobs involving overnight shifts, heavy physical effort, outdoor conditions, or minimum wage pay, and gave the example, "A young worker living in Toronto is not going to move halfway across the province to take a job at a diner in Timmins, but the diner still needs the role filled to stay open."

Restaurants Canada, representing nearly 30,000 members nationwide, stated that TFWs comprise only 1.5 per cent of the food service workforce but are vital to many businesses’ operations. The group reported 58,000 job vacancies in the food service sector, projecting growth to 105,000 by 2030, with shortages most acute in rural areas. Restaurants Canada has encouraged all provinces to accept the federal offer to temporarily increase the TFW cap in rural and remote regions.

David Pierce, vice-president of government relations at the Canadian Chamber of Commerce, noted that while youth employment is important, the factors influencing employment gaps are varied. He said, "Every opportunity already must be offered to Canadians and permanent residents first."

Syed Hussan, executive director of the Migrant Workers Alliance for Change, warned that not opting into the federal program could precipitate a care crisis in rural Ontario. Hussan stated that many temporary foreign workers in sectors such as health care, who support aging populations, "can't simply be replaced." He argued that excluding migrants or maintaining their temporary status could negatively affect the overall economy, and called for pathways to permanent residency or citizenship for temporary workers.

Timothy Lang, president and CEO of Youth Employment Services, observed that it is currently harder for youth to find jobs than in previous years, suggesting now may be the time to encourage them to consider rural employment. Lang stated that TFWs have historically been needed in rural areas for agricultural work because Canadians have not taken those jobs.

In response to the province’s decision, Minister Piccini reiterated Ontario’s support for agricultural streams of the TFWP, but maintained that the focus should be on domestic workers. The federal government, in a statement, affirmed that Ontario’s choice provides clarity to employers regarding the prioritization of domestic hiring.

The measures remain in effect until March 31, 2027, for participating provinces. The debate over the TFWP reflects broader questions about how best to address labour shortages, balance the interests of local workers and businesses, and manage the role of temporary immigration in the labour market.