Foreign firms underscore significance of overseas labor force contributions
In an effort to attract foreign workers, some Canadian manufacturing companies have taken steps such as purchasing houses and offering training on life in Quebec. However, changes to the Temporary Foreign Worker Program (TFWP) in Canada may pose challenges for these companies.
Effective June 2025, the wage threshold for the TFWP will require Canadian employers, including those in manufacturing, to pay foreign workers wages at or above updated provincial and territorial median wage levels. This adjustment, averaging around a 2-3% increase in 2025 and in some provinces up to 20% above median wages as of late 2024, will impact manufacturing companies by raising their labour costs when hiring temporary foreign workers.
One of the key impacts on Canadian manufacturing companies is higher labour costs. Companies must offer higher wages to meet the new wage thresholds, increasing overall employment expenses. Additionally, positions paying below the wage threshold fall into the low-wage stream, which imposes stricter hiring caps and more regulatory requirements, potentially limiting the number of TFWs manufacturers can hire at lower wage rates.
These changes could lead to recruitment challenges for some manufacturing employers, who may find it harder to hire foreign workers if they cannot meet the wage requirements or comply with new program restrictions. This may pressure companies to raise wages for all workers or invest in automation or strategic workforce planning.
Moreover, employers must annually review wages and ensure compliance with Labour Market Impact Assessments (LMIAs) reflecting the prevailing wage, increasing administrative complexity.
These changes reflect a broader Canadian government effort to ensure fair wages for temporary foreign workers while balancing labour market needs. While this protects worker rights and could improve local wages, manufacturing companies—especially small and medium enterprises—may face financial and operational challenges due to increased wage bills and stricter program limits.
Several companies, such as Cord Electric, Coaticook Dairy, and Amecci, are already feeling the effects of these changes. For instance, Cord Electric, based in Maricourt, employs 115 people, with approximately 20 foreign workers. The CEO, Lise Deziel, is worried about the increased minimum wage threshold in the TFWP, which is currently $34.62 per hour. Similarly, Coaticook Dairy employs 8 foreign workers out of a total of around 160 employees during the summer period. The integration of foreign workers at Coaticook Dairy has been successful, in part due to the support of the MRC de Coaticook's "welcome brigade" for new residents.
However, Quebec's regulation requiring a minimum knowledge of French among temporary workers could affect companies like Coaticook Dairy. Meanwhile, Amecci, based in Sherbrooke, manufactures abrasive products and employs 24 people, including 7 temporary foreign workers. The director fears he won't be able to renew permits for these workers next year.
In Cabico's factory, technology is prevalent, but some tasks still require the human touch. The new machine at Amecci, purchased with the help of the Quebec Investment Boost program, requires manpower to operate. The director of Amecci is concerned about the new minimum wage threshold of $34.62 per hour, as it could create upward pressure on all other salaries and put him in an unsustainable situation.
In an attempt to address these challenges, some companies are exploring alternative solutions. For example, Coaticook Dairy sought to hire workers under the PTET program in 2022 who wanted to settle in the region long-term.
These changes to the TFWP will likely have far-reaching implications for Canadian manufacturing companies, particularly small and medium enterprises, as they navigate higher labour costs, stricter program limits, and increased administrative complexity.
French-speaking Temporary Foreign Workers may be a significant asset for small and medium manufacturing companies in Quebec, given the increasing labor costs and stricter program limits under the revised Temporary Foreign Worker Program (TFWP). The Quebec regulation requiring a minimum knowledge of French among temporary workers could potentially pose a challenge for companies like Coaticook Dairy. Additionally, sports programs or initiatives could help attract and retain French-speaking foreign workers, offering another viable option for manufacturing companies.
