Employers will no longer have flexibility to set the wages for foreign labour, calling a halt to what was known as the 15 per cent rule, Immigration Minister Jason Kenney told a news conference.
That rule allowed businesses to pay foreign workers up to 15 per cent below median wages, if that's what they were paying Canadians.
The Conservatives are also calling a temporary halt to a program that fast-tracked the ability of some companies to bring in workers from outside Canada through what's known as an accelerated labour market opinion.
The two changes are part of a broader overhaul of the temporary workers program that also includes stricter rules for applications, new fees for employers who apply and a promise of stricter enforcement.
Some elements of the overhaul were announced in the March budget, but the program review has taken on greater political urgency for the Conservatives in recent weeks in the face of weak job numbers and a high-profile case of potential misuse of the foreign workers system involving The Royal Bank of Canada.
The 15 per cent rule and fast-tracked application process were introduced with much fanfare last year as a way to keep Canada's economy humming.
Kenney insisted both were just pilot projects.
"It is a paradox that we get from some interest groups — constant pressures suggesting that the program is far too lax, and then from many, many employers and industry groups suggesting the program is far too rigid," he said.
"And we tried to respond to some of those concerns."
But the concerns of Canadians have been mounting as well.
Earlier this month, it was revealed that the Royal Bank contracted a supplier to provide IT assistance, which resulted in the bank outsourcing some Canadian jobs.
Questions were raised about how the supplier brought its own employees into Canada under the temporary foreign worker program so they could be trained at RBC branches.
And last year, a mining firm came under scrutiny for being approved to bring in foreign labour by claiming the ability to speak Mandarin was an essential requirement of the job.
"We understand why Canadians are asking questions, and quite frankly, our government shares their concerns," said Kellie Leitch, parliamentary secretary to the minister of human resources.
"The program was never intended to displace Canadians."
Critics said the 15 per rule was partially to blame, as it allowed the import of cheap labour and meanwhile, the fast-tracked application processes were never policed to ensure they met the rules.
The Conservatives have made a mess of the entire program, the New Democrats charged.
"This is not the first time the Conservatives have said they wanted to fix the program," said NDP human resources critic Chris Charlton.
"This is the latest example of them acting only after they got caught."
Kenney said he knows employers won't be thrilled by the changes.
"Our message to them today is don't just double, but triple your efforts to hire and train available Canadians for the work," he said.
"This will affect their businesses but we're sending a message that Canadians want them to send: do everything you can to find Canadians first."
Reaction was swift.
"What is being proposed by the government today is not in the interest of Canadian business," the Canadian Chamber of Commerce said in a statement.
"It's frustrating to see Canadians underemployed. It would be worse to see whole communities damaged because a key employer relocated elsewhere."
In 2012, some 213,516 people entered Canada via the temporary foreign worker program, more than three times the number admitted a decade ago.
Put another way, the private sector brought in 25 per cent more foreign labourers last year than the number of economic immigrants accepted by the government, which has long insisted caps on its own programs are necessary so as not to flood the Canadian labour market.
Two of the seven changes announced to the program Monday appear directly related to the recent controversies.
One will add questions to employer labour market opinion applications to ensure that the program isn't used for outsourcing of Canadian jobs; the second ensures only English or French can be used as language requirements.
The changes will also increase the government's authority to revoke work permits if the program is being abused.
The government says it will also ensure employers who use foreign labour have a plan to switch to a Canadian workforce over time.
The changes also allow the government to charge employers a fee to bring in foreign labour rather than have taxpayers absorb the cost of the program.
The government spends approximately $35.5 million per year processing applications, at a cost of approximately $342 per application, Human Resources and Skills Development Canada told a pre-budget briefing earlier this year.
The seasonal agricultural worker program and the agricultural stream of the foreign workers program will be unaffected by the changes.
The government said there are proven labour shortages in this industry and the unfilled jobs are temporary.
Opposition politicians have argued that the growth and alleged abuse of the program pokes holes in the Conservative government's claim to have created thousands of jobs in Canada since the 2008 recession.
In a report released Monday, the Alberta Federation of Labour said that in 2010, Alberta's economy lost 8,600 jobs but at the same time, 22,992 foreign workers were allowed in.
Three out of every four jobs created in Alberta are filled by foreign workers, said Gil McGowan, the federation's president.
"It's clear to us that there is a huge and growing disconnect between what the Harper government says this program is supposed to be about and what it's actually become," McGowan said.
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