Vol. 151, No. 26 — December 27, 2017

Registration

SOR/2017-279 December 8, 2017

IMMIGRATION AND REFUGEE PROTECTION ACT

P.C. 2017-1525 December 8, 2017

Her Excellency the Governor General in Council, on the recommendation of the Minister of Citizenship and Immigration, pursuant to subsection 5(1) and section 89 (see footnote a) of the Immigration and Refugee Protection Act (see footnote b), makes the annexed Regulations Amending the Immigration and Refugee Protection Regulations.

Regulations Amending the Immigration and Refugee Protection Regulations

Amendments

1 (1) Subsections 315.2(2) and (3) of the Immigration and Refugee Protection Regulations (see footnote 1) are replaced by the following:

Payment

(2) The fee must be paid at the time the request is made.

Exceptions — agricultural work

(3) No fee is payable if the request is made in respect of an offer of employment that relates to

(2) The portion of subsection 315.2(4) of the Regulations before paragraph (a) is replaced by the following:

Primary agriculture sector

(4) For the purposes of paragraph (3)(b), work in the primary agriculture sector means, subject to subsection (5), work that is performed within the boundaries of a farm, nursery or greenhouse and involves

(3) Section 315.2 of the Regulations is amended by adding the following after subsection (5):

Exception — care for medical needs

(6) No fee is payable if

Exception — care for children

(7) No fee is payable if the request is made in respect of an offer of employment that relates to work performed in a private household providing care to children under 13 years of age, by an employer who meets the following conditions:

Coming into Force

2 These Regulations comes into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issues: Currently, all individuals, households and other employers seeking to hire foreign nationals as caregivers under the Temporary Foreign Worker (TFW) Program must pay the $1,000 per position Labour Market Impact Assessment (LMIA) processing fee. While the LMIA processing fee ensures that the costs of delivering the TFW Program are borne by employers who use and benefit from the Program, the fee may be financially burdensome for some individuals and households who are seeking to hire a TFW as a caregiver.

Description: Amendments to the Immigration and Refugee Protection Regulations (IRPR) will establish an exemption from the LMIA processing fee for families or individuals seeking to hire foreign caregivers to provide home care for persons who are incapable of caring for themselves due to a physical or mental condition, and for families with less than $150,000 in gross annual income seeking to hire foreign caregivers to provide childcare in their home. Waiving the fee for these families will support those most in need of financial assistance to meet their family caregiver needs and responsibilities.

Cost-benefit statement: The total cost of this regulatory amendment is estimated to provide a benefit in present value terms of $28.3 million for families ($4.7 million as an annualized average) over 10 years starting in 2017–2018. Middle-income families who qualify for the LMIA processing fee exemption would benefit from this amount by allocating the savings to other expenses. However, the foregone $28.3 million in fee revenue over the span of 10 years would result in an overall neutral impact to the Canadian economy since the relief in the LMIA processing fee constitutes a transfer from Government to affected families. Additional qualitative or economic benefits from providing this relief to families are expected but not subject to quantification.

“One-for-One” Rule and small business lens: The “One-for-One” Rule and the small business lens do not apply to this amendment, as there is no change in administrative burden, nor any incremental costs imposed on small businesses that comply with the Immigration and Refugee Protection Act (IRPA) and IRPR.

Background

Foreign workers can enter Canada through two distinct programs: the TFW Program and the International Mobility (IM) Program. The TFW Program is jointly managed by Employment and Social Development Canada (ESDC) and Immigration, Refugees and Citizenship Canada (IRCC) under the authority of the IRPA and the IRPR. The IM Program is the sole responsibility of IRCC.

Temporary Foreign Worker (TFW) Program

The TFW Program assists employers in addressing their immediate skills and labour shortages on a temporary basis when qualified Canadians or permanent residents are not available.

ESDC has the following four streams under which employers can submit an LMIA application:

The high-wage stream is for positions at or above the provincial/territorial median hourly wage where the work is taking place. Examples of typical high-wage occupations include managerial, scientific, professional and technical positions, as well as the skilled trades. The low-wage stream is for positions below the provincial/territorial median hourly wage where the work is taking place. Examples of typical low-wage occupations include general labourers, food-counter attendants, and sales and service personnel. Caregivers are typically processed as part of the stream for low-wage positions. In both 2015 and 2016, the vast majority of the approved caregiver positions were in the low-wage category (94.7% and 98.5%, respectively).

Labour Market Impact Assessments

Employers who seek to hire foreign workers under the TFW Program must submit a LMIA request to ESDC, which then assesses the likely effect that these workers would have on the Canadian labour market. A positive LMIA will be issued if it is determined that the employment of the foreign national will have a neutral or positive effect on the Canadian labour market. Once a positive LMIA has been issued by ESDC, it can be used by a foreign national to support a work permit application submitted to IRCC. In July 2013, regulatory changes required a fee of $275 to be paid for each position requested on the LMIA. In June 2014, this fee was increased to $1,000 per position. The intent of increasing the LMIA processing fee from $275 to $1,000 was to strengthen the TFW Program’s compliance regime and so that the cost of delivering the TFW Program with the enhanced compliance activities would continue to be paid for by employers who use and benefit from the Program. Employers requesting LMIAs for on-farm primary agriculture, including the Seasonal Agricultural Worker Program, have always been exempt from the LMIA processing fee.

Hiring a temporary foreign caregiver

A family/individual who wants to hire a caregiver may apply to the TFW Program when Canadians or permanent residents are not available. A foreign caregiver can be hired to provide caregiver services in the following five occupations: (1) Registered Nurses; (2) Licensed Practical Nurses; (3) Nurse Aides, Orderlies and Patient Service Associates; (4) Visiting Homemakers, Housekeepers and Related Occupations; and (5) Babysitters, Nannies and Parents’ Helpers. However, the vast majority of approved low-wage positions were for Babysitters, Nannies and Parents’ Helpers (78.3%) and Visiting Homemakers, Housekeepers and Related Occupations (19.7%).

Caregivers can also work in a setting other than the home (e.g. extended care facility or hospital). However, private households accounted for 93.4% of approved caregiver positions in 2015, and 97.4% in 2016. Institutional facilities will not be exempted from the LMIA processing fee under this regulatory amendment.

Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities

In 2016, the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities (HUMA) reviewed the TFW Program. Witnesses to the HUMA Committee presented testimony about various issues related to foreign workers and noted difficulties with the LMIA processing fee. HUMA completed its study of the TFW Program in June and tabled its report on September 19, 2016.

Government commitment

The Fall 2015 mandate letter to the former Minister of Immigration, Refugees and Citizenship Canada (IRCC), Minister McCallum, contained a commitment to eliminate the LMIA processing fee for caregivers. The February 2017 mandate letter addressed to the Minister of Employment, Workforce Development and Labour mandates the Minister to work with the Minister of IRCC to eliminate the $1,000 LMIA processing fee to hire caregivers.

Budget 2017

In the March 22, 2017, Federal Budget, the Government of Canada announced funding to improve the TFW Program and the IM Program. One of these improvements involved the proposal to “eliminate the Labour Market Impact Assessment [(LMIA)] processing fee for families seeking to hire foreign caregivers to provide care for persons with high medical needs, and for middle class families with less than $150,000 in annual income seeking [to hire foreign caregivers to provide] childcare.”

The Budget noted that waiving the LMIA processing fee for these families would ensure that support is targeted at those most in need of assistance to meet their family caregiving responsibilities. It also noted that the total cost (i.e. foregone revenue) of this measure is estimated at $24.5 million over five years, starting in 2017–2018, and $4.9 million per year ongoing.

Issues

In its report, tabled in September 2016, the HUMA Committee noted that the $1,000 LMIA processing fee has negatively impacted families hiring caregivers. Some of the HUMA witnesses, who have been using caregivers for decades to tend to their disabled family members, indicated that the rise in fees is making it very difficult to afford hiring caregivers. In addition to paying for a caregiver’s airfare, health insurance and other incidentals, families are now required under the TFW Program to pay LMIA processing fees on an annual basis, if in the low-wage stream, in order to extend their caregivers’ work permits. It was reported that the $1,000 per position LMIA processing fee has become an additional financial burden on families. Overall, witnesses called for the LMIA processing fee to be abolished, or at least reduced for families hiring caregivers.

Since the review, the TFW Program has received some correspondence from people with disabilities, who claim that the $1,000 LMIA processing fee to hire a caregiver has created a particular financial burden for them since they often live on fixed or low incomes. The $1,000 processing fee per position places an additional burden on households who need “caregivers for children, seniors and disabled relatives.”

Objectives

The objective of this IRPR amendment is to provide financial relief to families seeking to hire foreign caregivers to provide home care for family members who are incapable of caring for themselves due to a physical or mental condition, or individuals seeking care for themselves, and for families with less than $150,000 in annual income seeking to hire foreign caregivers to provide childcare in their home for children under the age of 13. Eligibility for the exemption of the LMIA fee is defined in the IRPR.

Description

This amendment to the IRPR will establish two new exemptions from the LMIA processing fees. One exemption will apply to individuals seeking to hire a foreign caregiver to provide care in a private household for themselves or for family members if they are incapable of caring for themselves due to a physical or mental condition. The other exemption will apply to families or individuals with less than $150,000 in gross annual income seeking to hire a foreign caregiver to provide childcare in their home to a child or children under 13 years of age with whom they live either part-time or full-time.

Regulatory and non-regulatory options considered

As subsection 315.2(1) of the IRPR requires that all employers pay the $1,000 per position LMIA processing fee, the only method to eliminate the fee is through a new regulatory exemption. In view of this, the following options were considered:

Benefits and costs

An analysis was conducted to assess the benefits and costs to stakeholders affected by the regulatory amendments to establish an exemption to the $1,000 per position LMIA processing fee for

  1. families with less than $150,000 in gross annual income seeking to hire foreign caregivers to provide childcare in their home; and
  2. families or individuals seeking to hire foreign caregivers to provide home care for individuals who are incapable of caring for themselves due to a physical or mental condition.

The baseline scenario considers the case in which no changes are made to the current LMIA processing fee structure — all families using the TFW Program to employ caregivers would continue to pay the $1,000 fee.

The baseline scenario was then compared to the scenario with the regulatory amendments to introduce the fee exemptions for families with incomes below $150,000, or those with incomes higher than $150,000 but requiring home care for individuals who are incapable of caring for themselves due to a physical or mental condition.

The analysis covers the 10-year period beginning in 2017 when the amendments will be implemented and ending in the year 2026. All costs and benefits are projected over this period and expressed in constant 2017 dollars using a discount rate of 7%. The volumes of TFW caregiver LMIAs prevailing in 2016 is adopted in every year of the analysis. The impact in 2017 was reduced by a factor of 75% to account for the partial year implementation in the first year that the regulatory amendments are in force.

Over the 10-year period following the introduction of the regulatory amendments, the present value of the total estimated benefits is $28.3 million ($4.7 million as an annualized average), with the benefits experienced predominantly by the families who will face lower financial burdens when employing foreign caregivers through the TFW Program.

The costs of the amendments amount to $28.3 million in present value in the 10 years following implementation. These costs will be incurred by the Government of Canada as foregone LMIA processing fee revenue in addition to minor transition costs which amount to less than $50,000 to implement and administer the new fee structure incurred in the first year of implementation.

The benefits to families employing TFW caregivers nearly completely offset the costs to the Government of Canada, with the exception of the transition costs. Therefore, aggregating the costs and benefits of the amendments results in a neutral impact to the Canadian economy. Additional qualitative or economic benefits from providing this relief to families are expected but not subject to quantification.

The following cost-benefit statement provides an overview of the anticipated impacts on affected stakeholders.

Cost-benefit statement
 

Base Year
2017

Year Five
2021

Final Year
2026

Total (PV)

Annualized Average

A. Quantified impacts (millions of present value Canadian dollars, 2017)

Benefits

Stakeholders

          

LMIA processing fee elimination — income-based (or income and medical need)

Savings by families employing caregivers with incomes under $150,000

$0.811

$2.6

$1.8

$22.7

$3.2

LMIA processing fee reduction — medical need-based

Savings by families with incomes above $150,000 employing caregivers to assist members who are incapable of caring for themselves due to a physical or mental condition

$0.2

$0.6

$0.5

$5.6

$0.8

Total benefits

$1.0

$3.2

$2.3

$28.3

$4.7

Costs

Stakeholders

          

Reduction in fee revenue

Government of Canada

$1.0

$3.2

$2.3

$28.3

$4.7

Transition costs

Cost to Government to update form and manuals, and communications

$0.0

$0.0

$0.0

$0.0

$0.0

Total costs

$1.0

$3.2

$2.3

$28.3

$4.7

Net benefits

$0.0

$0.0

$0.0

$0.0

$0.0

B. Quantified impacts in non-dollars (e.g. from a risk assessment)

Reduced fees — income-based (or income and medical need)

Number of families employing caregivers with incomes below $150,000 benefitting from LMIA processing fee reduction

837

3 357

3 357

31 051

3 105

Reduced fees — medical-based

Number of families employing caregivers with incomes below $150,000 benefitting from LMIA processing fee reduction

207

827

827

7 650

765

C. Qualitative impacts

Enhanced equity in caregiver access — middle class families have enhanced ability to hire health care providers.

Reduced pressure on health care organizations — enhanced accessibility to caregivers reduces pressure on health care organizations, e.g. extended care hospitals and community living agencies.
Benefits
Canadians and permanent resident families

In the baseline, families that hire TFWs to serve as low-wage caregivers are required to pay LMIA processing fees on an annual basis in order to extend their caregivers’ work permits, along with any additional costs associated with a caregiver’s airfare, health insurance, and other incidentals.

The elimination of the LMIA processing fee for middle-class families with childcare needs, with household incomes below $150,000, will reduce the overall financial burden of employing a temporary foreign worker caregiver by $1,000 annually. Based on the income information provided by families on their applications, the fee exemption for middle-income households will apply to approximately 3 357 applicants per year, resulting in fee relief totalling $22.7 million in present value over the 10-year period following introduction of the regulatory amendments.

Based on 2016 volumes, approximately 827 Canadian households that require care for individuals who are incapable of caring for themselves due to a physical or mental condition will benefit from a reduction in the financial burden. The lessening of the financial burden for this category of families utilizing the TFW Program (not counted among the previous category of families with incomes below $150,000) will add an additional present value of benefits amounting to $5.6 million over the 10-year period following the introduction of the regulatory amendments.

Costs
Government of Canada

The LMIA processing fee exemption for families seeking to hire certain caregivers will represent a present value of $28.3 million in foregone fee collections in the 10 years following the introduction of the regulatory amendments, with lower revenue foregone in 2017 due to partial implementation in the first year. As under the baseline scenario, ESDC will continue to incur processing costs associated with processing of LMIA applications in relation to TFW caregivers, with the LMIA application fee having been established in June 2014 at a cost-recovery level of $1,000 per position requested on the application. Correspondingly, the regulatory amendments introduce a transfer to the Government of Canada of the processing costs incurred in conducting LMIAs from middle income families requesting caregivers for childcare purposes and those requiring caregivers for individuals who are incapable of caring for themselves due to a physical or mental condition.

The fee exemption may increase the number of applications from families with incomes less than $150,000 due to the lower effective cost of hiring a TFW caregiver, although the limits on work permits issued to foreign caregivers will continue to be set from year to year. It is difficult to assess the change in the volume of applications based on historical use of the caregiver program since the overall TFW Program was affected by several changes in recent years, including the imposition of the LMIA processing fee in July 2013, and the substantial increase in the fee in June 2014, combined with the introduction of a system of employer compliance to enhance program integrity, as well as the announcement of the termination of the Live-in Caregiver Program and the introduction of two permanent resident caregiver pilot programs in November 2014. Any change in application volumes will be processed by ESDC/Service Canada within existing resources.

Distributional impacts

ESDC conducted a preliminary scan of gender-based analysis implications, with particular focus on who will stand to benefit from the regulatory changes, as well as the profile of TFW caregivers that may indirectly benefit.

The TFW Program provides LMIAs to employers but does not play any role in the recruitment of workers (employer responsibility) or the issuance of work permits (IRCC responsibility). With the exception of household income, the Program does not collect identifiable personal characteristics about the employer. Among all positive LMIAs issued, TFW Program administrative data shows that the proportion issued for caregiver positions for families with a household income of less than $150,000 was 22% in 2015 and 26% in 2016.

Further, the Program only collects limited statistics on identifiable personal characteristics of the requested TFW if the employer chooses to submit this information on the LMIA application. IRCC work permit data, which is a much more reliable source of information on TFWs, demonstrates that the vast majority of TFW caregivers are women (95% in 2015 and 94% in 2016). In both 2015 and 2016, TFWs in the age group 30 to 44 represented the largest share of caregivers (61%), followed by TFWs between the ages of 15 to 29 (28%). Based on work permit data, the Philippines is the top source country for foreign caregivers, representing 87% in both 2015 and 2016, followed by the People’s Republic of China with 2% in both years.

“One-for-One” Rule

The “One-for-One” Rule does not apply to this amendment, as there is no change in administrative burden to businesses.

Small business lens

The small business lens does not apply to this amendment since businesses are not affected.

Consultation

The regulatory amendment responds to input received from the public on the TFW Program through the HUMA review, which heard from caregiver stakeholders. Furthermore, the public was notified of the Government’s intention to eliminate the LMIA processing fee following the publishing of Minister Hajdu’s mandate letter on February 2, 2017. Additionally, in Budget 2017, the Government of Canada announced the elimination of “the Labour Market Impact Assessment (LMIA) processing fee for families seeking to hire foreign caregivers to provide care for persons with high medical needs, and for middle class families with less than $150,000 in annual income seeking [to hire foreign caregivers to provide] childcare.”

ESDC did not receive any commentary from stakeholders regarding the Budget announcement for the elimination of the $1,000 LMIA processing fee for families seeking to hire caregivers. Given that the amendments are not expected to have any negative impacts on stakeholders and it is anticipated that there will be widespread support from those who are eligible for the exemption, no additional stakeholder consultations were held.

Regulatory cooperation

The amendment involves creating specific new exemptions from the regulation regarding the mandatory collection of the $1,000 LMIA processing fee per position with respect to an offer of employment for work as a caregiver.

As the change is to the IRPR, the cooperation of IRCC is required to develop and approve the regulatory amendment in order to introduce this LMIA processing fee exemption. The payment of the fee is for the provision of services in relation to an assessment by ESDC in the context of the federal TFW Program, and the elimination of this fee requires no other regulatory coordination or cooperation with other jurisdictions, the provinces and territories or international governments.

Rationale

The LMIA processing fee exemption is designed to help alleviate the financial burden on individuals and families who need to hire caregivers the most. As caregiver positions are almost exclusively low-wage (below the provincial/ territorial median wage), the duration of the work permit is typically limited to a maximum of one year. Therefore, in addition to paying for a caregiver’s airfare, health insurance and other incidentals, most families are now required to pay the $1,000 LMIA application fee on an annual basis in order to extend their caregivers’ work permits. Waiving the LMIA application fee for families seeking certain caregivers will eliminate at least one yearly cost.

For families or individuals seeking to hire caregivers for childcare purposes, the household income cut-off of $150,000 for the LMIA processing fee exemption is in place to assist middle-income families. These families or individuals require assistance of a caregiver to allow members of the family or other individuals to work outside the home and earn an income, which not only benefits the family but the labour market as well.

For individuals or families seeking to hire caregivers for individuals who are incapable of caring for themselves due to a physical or mental condition, there is no income threshold for the LMIA process fee exemption. Individuals seeking to hire caregivers to provide home care for themselves are often living on a fixed income and individuals seeking to hire a caregiver for those for whom they are responsible must at times leave participation in the workforce to assist with caregiving duties. Persons who are incapable of caring for themselves due to a physical or mental condition often place a heavy burden (i.e. emotionally, psychologically, and financially) on their families or those who are responsible for them. The LMIA processing fee can create a barrier to receiving the caregiver support that they require. Having access to a caregiver may also allow those hiring the caregiver to return to or increase their participation in the workforce. The extended period during which care may be required for individuals who are incapable of caring for themselves because of a physical or mental condition normally exceeds the years during which child care may be required and, therefore, results in a more prolonged impact on the ability to earn an income by the individual hiring the caregiver. In order to reduce the impact, this exemption is not subject to an income threshold.

Finally, eliminating the $1,000 per position LMIA processing fee for individuals or families seeking to hire caregivers to provide care for individuals who are incapable of caring for themselves due to a physical or mental condition, and childcare for families with less than $150,000 in gross annual income, will fulfill the commitments set out in the mandate letter of the Minister of Employment, Workforce Development and Labour as well as Budget 2017.

Implementation, enforcement and service standards

A strategic communications plan has been developed to raise awareness of the upcoming changes in regulations. Employers will also be informed of the amendment to the IRPR through the ESDC website.

This amendment comes into force upon registration. The amendment will require the TFW Program to update policies and operational guidance to Service Canada officers who process LMIAs to implement the new fee exemption for families or individuals that qualify. No system changes will be required.

To qualify for the exemption from paying the LMIA processing fee to request a foreign caregiver for a person who is incapable of caring for themselves due to a physical or mental condition, a medical certificate from the treating medical practitioner attesting to their incapacity will be required at the time the application is submitted.

Performance measurement and evaluation

Following its implementation, ESDC will continue to monitor the effectiveness of the LMIA processing fee exemption for individuals or families seeking certain caregivers in order to be certain whether the amendment is meeting its objective. Additionally, the effectiveness of the fee exemption will be further explored in the next TFW Program evaluation that is scheduled to take place in 2018–2020.

Contacts

Donna Blois
Director
Integrity Policy and Program Intelligence Division
Temporary Foreign Worker Program
Employment and Social Development Canada
140 Promenade du Portage
Gatineau, Quebec 
K1A 0J9
Email: donna.blois@hrsdc-rhdcc.gc.ca

David Cashaback
Director
Temporary Resident Policy
Immigration, Refugees and Citizenship Canada
365 Laurier Avenue West
Ottawa, Ontario 
K1A 1L1
Email: IRCC.LMIAFeeExemption-DispensesDeFraisEIMT.IRCC@cic.gc.ca