The new rules, which build on measures announced in April, include additional restrictions on what language proficiency employers can request, broader requirements to advertise job openings and a new questionnaire that tries to ferret out whether a firm is seeking to replace existing Canadian workers.
The changes took effect on July 31, but do not affect the seasonal agricultural worker program.
"Qualified Canadians, including new Canadians, should have first crack at available jobs," Immigration Minister Chris Alexander — who made the announcement jointly with Employment and Social Development Minister Jason Kenney — said in a statement Wednesday.
Kenney said the $275 fee ensures that taxpayers no longer pay the cost of processing employer applications.
Last year, 60 per cent of processed applications were never actually filled by employers, costing taxpayers tens of millions of dollars, the release says. The government expects the fee to cut applications by about 30 per cent.
The latest restrictions follow a decision in April to jettison perhaps the most controversial aspect of the program, which allowed employers to pay foreign workers as much as 15 per cent less than the average wages for a job.
Critics complained the provision created an incentive for employers to bring in foreign workers rather than hire Canadians.
Carleton University business professor Ian Lee called the changes "prudent" and "adroit," both from an economic and political perspective, saying he believes the accumulated impact will result in a drop in temporary foreign workers next year.
The abuses of the program had given both business and the government a black eye, he said, so reforms were needed.
"It's not going to make the foreign workers category vanish, but I think you will see the numbers down next year," Lee said.
"I think companies are going to be much more careful in their use of the category for political reasons, for optics reasons, for public reputation reasons and because it's going to be more expensive now to use them."
Still, Lee added, such programs will become increasingly necessary in the future to fill job gaps, particularly in specialized skills, created as the baby boom generation transitions from work to retirement.
The use of the temporary foreign worker program has exploded in recent years even as unemployment levels stubbornly remained above seven per cent and many other Canadians struggled with underemployment. Some figures indicate the number of temporary workers in Canada doubled in seven years to about 340,000 as of December 2012.
The program became a political hot potato for the government in the spring, however, after it was revealed that the Royal Bank of Canada contracted with a supplier to provide IT assistance, which resulted in the bank cutting Canadian jobs while the new supplier brought in foreign workers to fill them.
RBC chief executive Gord Nixon later apologized for the incident.
A mining firm also came under scrutiny last year after it received the green light to bring in foreign workers who could speak Mandarin.
The new rules would still allow firms to request language proficiency other than English or French, but they would be required to show why it was essential to the work.
As well, the new questionnaire asks a number of questions dealing with outsourcing, including whether "the entry of these temporary foreign workers (would) lead to job losses, now or in the foreseeable future, for Canadians ... as a result of layoffs, outsourcing, offshoring or other factors ..."
Officials say the government is still reviewing the program and more changes may be announced in the fall.
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