The Canadian government’s recent adjustments to the Temporary Residence Program, particularly the Temporary Foreign Worker (TFW) program, are poised to have significant repercussions for the food services franchise sector. These changes, which limit contract durations and impose stricter caps on foreign worker hiring, are likely to exacerbate existing labor shortages in fast food chains and other food service establishments.
On 18 September 2024, the Honourable Marc Miller, minister of immigration, refugees and citizenship, announced measures to manage the number of temporary residents in Canada, aiming to reduce the percentage from 6.5% to 5% of Canada’s population by 2026.[i] The measures are aimed at reducing Canadian employers’ reliance on foreign workers to fill vacancies. Employment minister Randy Boissonnault has revealed a decrease in the percentage of low-wage positions that can be filled by temporary workers. Employers are now limited to having 10% of their workforce comprised of low-wage temporary foreign workers. However, there is an exception for businesses in the health care, food processing, and construction sectors, allowing them to maintain a cap of 20% for foreign employees to address labor shortages. Employment restrictions on spouses of international students, and workers were also announced.[ii]
The food services industry is currently facing a critical shortage of workers.[iii] According to Restaurants Canada, there are currently around 73,000 job openings in the food sector. Many of these positions are located in rural and remote areas where attracting local talent can be difficult. The new restrictions mean that franchisees may struggle to fill these roles, leading to reduced service levels and potential closures.[iv]
Training staff in fast-paced environments like fast food restaurants typically requires an investment of time and resources. The new one-year contract limitation means that many workers may not be around long enough to fully integrate into the team or reach their full potential. Franchise owners often invest considerable effort in onboarding and training new employees; however, with such a short timeframe, many may reconsider hiring temporary workers altogether, knowing that their contributions will be limited.[v]
The food service industry relies on temporary foreign workers to meet operational demands. These changes may result in labor shortages, increased costs, and service disruptions. Franchisees should consider strategies to attract and retain workers, such as competitive wages, relocation incentives, benefits, and training programs for domestic candidates.
The Canadian government’s reduction in the Temporary Residence Program could have serious consequences for food service franchises. It is crucial for these businesses to stay informed about these developments and adapt their workforce strategies to remain competitive and sustainable.
[i] Canadian government announces upcoming changes to Temporary Residence Programs in an effort to manage volumes, Dentons. https://www.dentons.com/en/insights/articles/2024/september/20/canadian-government-announces-upcoming-changes
[ii] The Globe and Mail, Ottawa tightens restrictions on temporary foreign workers, international students https://www.theglobeandmail.com/politics/article-ottawa-tighten-restrictions-on-temporary-foreign-workers-international/
[iii] The foodservice sector is grappling with nearly 100,000 job vacancies, Restaurants Canada https://www.restaurantscanada.org/ceo-note/the-foodservice-sector-is-grappling-with-nearly-100000-job-vacancies/>
[iv] Restaurants Canada predicting severe consequences following changes to foreign workers policy, City News, Vancouver https://vancouver.citynews.ca/2024/09/22/canada-temporary-foreign-worker-program-restaurants-consequences/
[v] Restaurants Canada predicting severe consequences following changes to foreign workers policy, City News, Vancouver https://vancouver.citynews.ca/2024/09/22/canada-temporary-foreign-worker-program-restaurants-consequences/
