Canadian Prime Minister Justin Trudeau announced plans to reduce the number of low-wage temporary foreign workers and permanent residents entering the country.

This statement was made on Monday during the second day of a cabinet retreat focused on shaping the government's autumn agenda. The decision comes as Canada faces challenges related to its rapidly growing population, which economists say is straining housing and public services like healthcare.

Last year, immigration accounted for about 97% of Canada’s population growth, according to federal statistics. Trudeau and his government have faced criticism for increasing immigration without adequately expanding services or accelerating housing construction. Additionally, Canada’s unemployment rate has risen to 6.4% over the past two months, with approximately 1.4 million people currently unemployed.

During a press conference, Trudeau indicated plans to overhaul the Temporary Foreign Worker Programme due to shifts in the labor market. He emphasized that the current situation is unfair both to Canadians who are struggling to find jobs and to temporary foreign workers who are often mistreated and exploited.

The Temporary Foreign Worker Programme allows Canadian employers to hire foreign nationals for temporary jobs when qualified Canadians are not available.

However, the program has faced criticism from labor advocates and, more recently, the United Nations, which described it as “a breeding ground for contemporary forms of slavery” in a report this month. UN special rapporteur Tomoya Obokata, a professor of human rights law at the University of York in the UK, reported incidents of abuse, underpayment, and other issues within the program.

In recent years, the use of the program by employers has surged, particularly in industries like agriculture and construction. This increase is partly due to the loosening of program restrictions to address labor shortages following the COVID-19 pandemic. Employment and Social Development Canada (ESDC) reported that nearly 183,820 temporary foreign worker permits were issued in 2023, marking an 88% increase from 2019. The ESDC criticized employers for using the program to "circumvent hiring talented workers in Canada."

The upcoming changes include halting the processing of some work permits in regions where the unemployment rate is 6% or higher, with exceptions for seasonal food and agriculture jobs, construction, and healthcare. Additionally, the share of low-wage temporary foreign workers that employers can hire will be reduced from 20% to 10% of their total workforce. These changes will take effect on September 26.

Earlier this year, the Canadian government signaled its intention to reduce the overall number of temporary residents for the first time in the country’s history. This cap will apply to foreign workers, international students, and asylum seekers.