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Considerations when Hiring Temporary Foreign Workers and Permanent Residents in Canada

4 October 2023 by Barteaux Labour & Employment Lawyers Inc.

Canada is renowned for its welcoming immigration policies and diverse workforce. Foreign workers and permanent residents in Canada contribute significantly to the country’s economic and cultural landscape. Skilled workers, improved diversity, and long-term commitment are just some examples of the ways in which foreign workers and permanent residents can benefit an organization. Therefore, for employers who are looking to add foreign workers and permanent residents to their workforce, it is essential to understand the legal aspects of hiring them through careful planning and adherence to Canadian immigration laws.

Temporary and permanent immigration to Canada is governed by federal legislation under the Immigration and Refugees Protection Act, S.C. 2001, c. 27 (“IRPA”) and the Immigration Refugee Protection Regulations, SOR/2002-227 (“IRPR”). In recent years, many Canadian provinces have enacted specific foreign worker protection legislation to supplement the general employment standards. These measures recognize that foreign workers can be especially vulnerable, particularly when their status in Canada is tied to a single employer by virtue of the terms and conditions of their work permit. Permanent residents, on the other hand, are individuals who have been granted the right to live and work in Canada without restrictions. This means that they are generally afforded the same employment rights as Canadian citizens and have the freedom to work anywhere within the county.

Considerations for foreign workers

Labour Market Impact Assessment
In most cases, before hiring a foreign worker, employers must obtain a positive Labour Market Impact Assessment (“LMIA”), which is a comprehensive assessment that measures the impact that a foreign worker will have on the Canadian labour market. This is accomplished by conducting a thorough domestic recruitment campaign to demonstrate there are no qualified and available Canadians or permanent residents for the role. Employers complete this through Employment and Social Development Canada and Service Canada. Once an LMIA is in place, the foreign worker is able to apply for an employer-specific work permit to authorize their employment in Canada.

LMIA Exemptions
There are several facilitative work permit categories employers may avail of that are exempt from the LMIA requirement. These categories are available pursuant to public policies, international agreements, and the IRPR. For example, LMIA-exempt work permits are available for eligible intra-company transferees, certain professionals under the Canada-United States-Mexico Agreement (and other free trade agreements), and highly specialized international resources whose work in Canada will create or maintain significant benefits or opportunities for Canadians and permanent residents of Canada.

It is an offence contrary to section 124 of IRPA to employ a foreign national in Canada without proper authorization.1 This offence is punishable by a fine of up to $50,000 and/or imprisonment for up to two years.2 Employers must exercise due diligence to determine whether a foreign national is properly authorized to work in Canada. An employer who fails to exercise due diligence to confirm that a foreign national is properly authorized to work for them in Canada is deemed to have known the foreign workers employment was not authorized.3

Various conditions are imposed on employers of foreign workers in Canada pursuant to sections 209.2 to 209.4 of IRPR including but not limited to providing a foreign worker with the same occupation and substantially the same (but not less favourable) wages and working conditions as those set out in their offer of employment; complying with the applicable federal and provincial laws that regulate employment and the recruitment of employees; and making reasonable efforts to provide an abuse-free workplace.4

An employer’s compliance with the regulatory conditions imposed on their employment of foreign nationals is monitored by the Government of Canada through employer compliance inspections. Non-compliance discovered during an inspection that cannot be justified constitutes a violation that is subject to one or more of the following sanctions:

  • a warning;
  • a period of ineligibility from hiring foreign workers;
  • inclusion of the employer’s information on a public website of ineligible employers; and an administrative monetary penalty.5

Considerations for permanent residents

As indicated above, permanent residents maintain similar employment rights as any Canadian citizen, therefore employers should take care to ensure that standard employment rights prescribed under the common law and legislation are reflected in their hiring practices. Special attention should be paid to relevant human rights legislation, as citizenship is an enumerated ground in certain jurisdictions such as Ontario. The issue of discrimination on the basis of citizenship was most recently explored in a 2023 Court of Appeal for Ontario decision. The question arose as to whether employers, as part of their application process, could ask job-applicants whether they were eligible to work in Canada on a “permanent basis”.6

In Haseeb v. Imperial Oil Limited, 2018 HRTO 957, an international student applied for a role with Imperial Oil as an engineer. The student was eligible to work in Canada under the Post-Graduate Work Permit Program, which allows students to work in Canada up to three years after their graduation. During the interview process, the student was asked on several occasions whether he was eligible to work in Canada on a “permanent basis”. At this time, Imperial Oil maintained a hiring policy that required engineers to have permanent resident status. While the student was eligible to work in Canada, he did not yet have permanent resident status, so lied in his application. The student was provided with a conditional job offer pending his residency status, and when he disclosed his true status, the job offer was rescinded. Following this, the student sought recourse under section 5 of the Ontario Human Rights Code (“OHRC”) for discrimination based on citizenship.

In its defence, Imperial Oil argued that they were entitled to withdraw the job offer as the student had been dishonest in his job application. They further stated that the permanent resident hiring requirement was not discriminatory, as it was merely inquiring into the student’s immigration status, which is not an enumerated ground for discrimination under the Ontario Human Rights Code. However, the Tribunal was not convinced and found that Imperial Oil (1) discriminated against the student on the basis of citizenship; (2) that the discrimination was direct, and; (3) Imperial Oil failed to establish that the student’s dishonesty was the sole reason for withdrawing the job offer. Imperial Oil sought reconsideration of the Tribunal’s decision but was denied. On judicial review, the Ontario Divisional Court quashed the Tribunal’s decision, reasoning that the discrimination was based on permanent residency, not citizenship, and the ruling was therefore unreasonable.

The matter made its way to the Court of Appeal for Ontario (the “ONCA”), where it was held that the Divisional Court erred in applying the reasonableness standard. In review of the Tribunal’s decision, the ONCA reaffirmed that discrimination was made out, as the principles of statutory interpretation call for a broad and liberal interpretation when it comes to human rights legislation. The fact that Imperial’s hiring policy discriminated against some non-citizens because of their citizenship status was enough to satisfy a case for discrimination at first appearance. Further, the ONCA commented that restricting hiring practices to Canadian citizens and permanent residents exclusively would have the effect of undermining programs like the Post Graduate Work Program, which aims to attract skilled workers to the Canadian labour market. Since the discrimination was made out, the onus was on Imperial Oil to demonstrate that the sole reason for withdrawing the job offer was because of the student’s dishonesty. In this instance, Imperial Oil did not have enough evidence to support this assertion and the Court restored the Tribunal’s decision.

A key takeaway from this decision is that employers should take time to familiarize themselves with enumerated grounds under their provincial human rights legislation and adjust their hiring practices accordingly. For example, in Nova Scotia the Human Rights Act does not protect the characteristic of “citizenship” but instead prohibits discrimination on the ground of “national origin”. While it remains to be seen if court in Nova Scotia would take a similar interpretation to this issue, it would be advisable for a pro-active employer to take pre-emptive steps to ensure their hiring practices are in line with these developments.

Ultimately, hiring foreign workers and permanent residents in Canada are excellent ways to enhance your organization’s diversity and access a wider pool of skilled workers. By understanding the legal aspects and responsibilities associated with hiring foreign workers and permanent residents, you can ensure fair, inclusive, and compliant onboarding processes. Embracing diversity in your workforce can lead to increased creativity, improved problem-solving, and a stronger, more resilient organization in the long run.

  1. Immigration and Refugees Protection Act, S.C. 2001, c. 27, s124 ↩︎
  2. Immigration and Refugees Protection Act, S.C. 2001, c. 27, s125 ↩︎
  3. Immigration and Refugees Protection Act, S.C. 2001, c. 27,s124(2). ↩︎
  4. Immigration Refugee Protection Regulations, SOR/2002-227, s209.2 – s209.4. ↩︎
  5. Government of Canada, Employment and Social Development Canada, Compliance information for employers hiring a temporary foreign worker, 2023, accessed online on September 27, 2023 at ↩︎
  6. Imperial Oil v. Haseeb, 2023 ONCA 364. ↩︎
This publication provides general information and should not be relied on as legal advice or opinion. Should you have any questions or require legal advice, we would be pleased to assist you with any matters related to the subject matter of this publication or any legal services provided by Barteaux Labour and Employment Lawyers Inc. Please contact us for assistance.
Posted by Barteaux Labour & Employment Lawyers Inc.

Barteaux Labour and Employment Lawyers Inc. is Atlantic Canada’s only homegrown management-side labour and employment law boutique, now offering immigration law as a core area of practice. We assist all kinds of employers, from multi-national corporations to non-profits, public bodies, and small businesses across a broad range of industries. We have a diverse team providing services to a varied group of clients.