The Manufacturing Sector One Year After The TFWP Restrictions

Québec's manufacturing sector is facing an acute labour shortage. Recent restrictions to the Temporary Foreign Worker Program (TFWP) — a program designed to help Canadian businesses hire foreign workers to meet labour needs — have made recruitment and retention even more challenging. For many companies, the changes introduced in September 2024 have created a dead end.

In this article, we outline the impact of these measures and discuss potential avenues to help ease the pressure.

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A Reminder of the TFWP Restrictions

Since September 2024, the Temporary Foreign Worker Program has been subject to new restrictions in line with federal and provincial goals to reduce the number of temporary residents.

First, the share of foreign workers in low-wage positions has been reduced from 20% to 10% of a company's workforce across most industries. In certain sectors, such as health care, education, food processing, and construction, the cap dropped from 30% to 20%.

In addition, applications are no longer processed under the TFWP in census metropolitan areas where unemployment exceeds 6%, and the maximum duration for low-wage positions has been cut to one year.

Finally, a new wage threshold now applies: to avoid being classified as a low-wage position, employers must offer at least 20% above the provincial median hourly wage. In Québec, this threshold is $34.62 per hour, excluding overtime and bonuses.

Québec's manufacturing sector has been hit especially hard by these restrictions. The absence of a grandfathering clause to protect workers already in place, combined with the difficulty of accessing permanent residency, has only deepened the crisis reported by many businesses in the sector.

The Importance of Temporary Foreign Workers in Manufacturing

In 2024, according to data published by Statistics Canada, nearly 26,000 applications for low-wage positions were approved in Quebec. By contrast, approximately 7,500 applications were approved under the high-wage stream. Restrictions on low-wage positions therefore have a significant impact in Quebec, which admits three times as many low-wage workers. Among the applications submitted under the low-wage stream in Quebec, more than 11,000 — nearly 45 % — were for occupations classified under category 7 (trades) and category 9 (manufacturing). The manufacturing sector is therefore particularly affected by these measures.

Furthermore, setting the classification threshold at an hourly rate exceeding the provincial median wage by 20% does not reflect the sector's realities. Average wages across administrative regions all fall below this new standard, except for Montreal and Outaouais, regions where the manufacturing sector is far less prominent.

Although wage statistics by occupation are available and used under the TFWP, they are disregarded when determining whether a position is considered low- or high-wage. For instance, a machining operator in Drummondville earning $30.00 per hour— i.e., $7.00 above the median wage for this occupation and higher than the rate set out in a collective agreement — would still be treated under the low-wage stream and subject to all related restrictions.

The result: many manufacturers are effectively unable to rely on the TFWP to fill critical labour gaps. Since the restrictions took effect, thousands of temporary foreign workers in Québec's manufacturing sector have seen their permits expire without renewal options. Many held jobs such as general labourers, machine operators, welders, or assemblers —positions already in shortage across Québec.

The PSTQ: A Partial Solution?

Launched in November 2024, theProgramme de Sélection des Travailleurs Qualifiés (PSTQ) includes two main streams that, in theory, could apply to manufacturing workers:

• Stream 1: FEER 1 and 2 occupations, such as welders and machinists.

• Stream 2: FEER 3, 4, and 5 occupations.

However, even though many candidates could meet the eligibility criteria of this new program, the selection criteria award very few points to most foreign workers employed in the manufacturing sector. While points are granted for work experience outside the Montreal metropolitan area as well as for a permanent job offer meeting the same conditions, the first rounds of selections under this program have fallen well short of the required score for many well-integrated and qualified candidates working in the manufacturing sector.

While the program is still new, it is clear that, at least for now, it does not provide a viable solution to the labour shortage in manufacturing.

Rethinking Immigration Programs to Support Manufacturing

Even within the government's objective of reducing the number of temporary residents, several measures could help ease the crisis:

• Introducing a grandfathering clauseto protect temporary foreign workers already in Québec when the restrictions took effect. These workers are already established and do not increase pressure on housing or social services.

• Exempting regions with low unemploymentfrom the 20% cap. A uniform national standard does not allow thresholds to be adjusted to regional realities and places a heavy burden on businesses facing labour shortages.

• Adjusting wage thresholds by region and occupation, using the existing salary data already applied in the TFWP framework, rather than a single provincial benchmark, to reflect the realities of different sectors and regions.

• Implementing targeted invitations under the PSTQ. In a context where points-based selections do not address the sector's needs, sector-specific selections that prioritize workers already in Quebec and employed in shortage occupations in manufacturing regions would better respond to industry needs. This would also enable a pathway to permanent residence and the long-term integration of key workers for the industry.

The combined effect of the TFWP restrictions, the reduction targets for temporary residents, and the PSTQ's selection requirements has left Québec's manufacturing industry in a legal and operational deadlock. With limited short-term solutions, it is urgent to reassess immigration policies to better reflect regional economic realities, sector-specific needs, and the true limits of local recruitment.

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