As of September, 2025, Canada is grappling with an alarming increase in youth unemployment, with rates soaring to levels not seen since the early days of the COVID-19 pandemic. This crisis, affecting young Canadians aged 15 to 24, has prompted a reevaluation of the country’s immigration and labor policies, particularly the Temporary Foreign Worker Program (TFWP). Critics argue that Canadian companies are exploiting the TFWP to create low-wage sweatshops, displacing domestic workers and exacerbating the unemployment crisis among the youth.
Short-term skills and labor shortages
The TFWP, originally designed to address short-term skills and labor shortages, has evolved into a tool for employers to bypass hiring Canadian workers, especially in sectors like hospitality, retail, and agriculture. The program allows companies to hire foreign workers for up to one year when no Canadians or permanent residents are available, but recent data suggests that this condition is often overlooked. A report by the Canadian Labour Congress (CLC) estimates that over 100,000 temporary foreign workers (TFWs) are employed annually, with a significant portion in low-wage positions that could be filled by young Canadians.
The youth unemployment rate, currently hovering around 13.5%, is a stark indicator of the program’s impact. Young Canadians, many of whom are entering the workforce for the first time, find themselves competing against TFWs who are willing to work for wages below the market rate. This wage suppression is particularly evident in industries like fast food, where TFWs are often paid minimum wage or slightly above, despite the high cost of living in Canada. For instance, in Toronto, where the average rent for a one-bedroom apartment exceeds $2,000 monthly, TFWs earning $15.50 per hour struggle to make ends meet, yet their presence depresses wages for all workers in the sector.
The exploitation of TFWs
The exploitation of TFWs is not just an economic issue but a human rights concern. Many TFWs are tied to a single employer through closed work permits, leaving them vulnerable to abuse. Reports of unpaid wages, unsafe working conditions, and lack of access to healthcare are common, painting a picture of modern-day sweatshops. A recent investigation by the Globe and Mail uncovered that some employers deduct housing costs from TFWs’ paychecks, leaving them with as little as $200 a month after expenses. This practice, while technically legal under certain conditions, undermines the program’s intent and perpetuates a cycle of poverty and exploitation.
The political landscape has responded to these concerns with mixed messages. Federal Conservative Leader Pierre Poilievre has criticized the TFWP, arguing that it stops young Canadians from finding good-paying jobs. Similarly, British Columbia Premier David Eby has pointed to the program as a contributor to high youth unemployment. However, experts like Tony Fang, a labor economist at York University, caution against blaming TFWs themselves. Fang argues that other immigration streams, such as the International Mobility Program (IMP), which includes pathways like the Global Talent Stream and Intra-Company Transfers, may be more responsible for displacing Canadian workers due to their lack of labor market testing.
The data is clear
Despite these nuances, the data is clear: the TFWP’s expansion has coincided with a decline in youth employment opportunities. The program’s wage thresholds, updated in June 2025, have not kept pace with inflation, allowing employers to hire TFWs at rates that undercut Canadian workers. For example, the low-wage stream of the TFWP permits hiring TFWs at wages as low as $27.47 per hour in high-cost areas like Toronto, a rate that many young Canadians find insufficient to cover living expenses.
The tech sector, often seen as a beacon of opportunity, is not immune to these trends. While the Global Talent Stream aims to attract high-skill workers, the broader TFWP is used to fill lower-skill roles in IT support and data entry, roles that could be entry points for young Canadians. A study by the Canadian Chamber of Commerce found that 40% of tech companies rely on TFWs for these positions, citing a lack of domestic talent. However, critics counter that this narrative ignores the potential of investing in youth training programs, which could bridge the skills gap without resorting to foreign labor.
The consequences
The consequences of this reliance on TFWs extend beyond economics. Social cohesion is at risk as young Canadians feel increasingly marginalized in their own country. The sense of unfairness is palpable, with many young people expressing frustration over the perceived preference for foreign workers. This sentiment is echoed in online forums and social media, where hashtags like #CanadianJobsFirst have gained traction.
To address this crisis, policymakers must consider several reforms. First, the TFWP should be overhauled to prioritize domestic hiring, with stricter enforcement of the requirement that no Canadians are available for the job. Second, wage thresholds must be indexed to inflation and regional cost of living to ensure that TFWs are not used to undercut Canadian workers. Third, investments in youth employment programs, such as apprenticeships and vocational training, are essential to equip young Canadians with the skills needed to compete in a global economy.
Moreover, the government should enhance oversight of TFW conditions to prevent exploitation. This includes regular audits of employers, mandatory reporting of wage and working condition data, and stronger penalties for non-compliance. The recent temporary public policy allowing TFWs to change jobs before their work permit applications are finalized is a step in the right direction, but it must be accompanied by broader systemic changes.
In conclusion, the TFWP, while a valuable tool for addressing labor shortages, has become a double-edged sword. Its misuse as a source of low-wage labor has contributed to the alarming increase in youth unemployment and created conditions akin to sweatshops. As Canada navigates this complex issue, the balance between attracting global talent and protecting its domestic workforce will be crucial. Failure to address these challenges risks not only economic stagnation but also the erosion of social trust and the alienation of a generation of young Canadians. The time for action is now, to ensure that the promise of opportunity is not reserved for foreign workers at the expense of Canada’s youth.