December 27, 2024

The Future of Canadian Labour Market Impact Assessments (LMIA) for Foreign Workers: Is There Another Way? A Brief Look at Singapore

Immigration, Refugees and Citizenship Canada (IRCC) has eliminated points for Labour Market Impact Assessments (LMIAs), reducing potential scores by either 50 or 200 points in an effort to combat fraud. But is there another way? Let’s take a look at Singapore.
Singapore is an island country and city-state in Southeast Asia with a population of 5.9 million and a Gross Domestic Product (GDP) of $501 billion in 2023. Its population is extremely diverse due to considerable past immigration. The Chinese are the predominant group, but there are also Malays, Indians, Tamils, Sikhs, Pakistanis, and Sinhalese communities, speaking an amalgamation of languages and dialects. There is also a mix of Eurasians, and the main language of communication is English.
Singapore has the most advanced economy in Southeast Asia, alongside South Korea and Taiwan. Its rapidly expanding economy drew large numbers of immigrants to the country, especially from China, Malaysia, India, Bangladesh, and the Philippines. The changes in the economy and societal needs prompted the government to take more drastic measures regarding immigration and workforce mobility in the city-state. Europeans are also part of the community, and their percentage has increased in the last few decades as foreign investment in the country grew.
Singapore has several foreign worker programs designed to meet the country’s labor needs while balancing its population dynamics and economic priorities. These programs are structured based on qualifications, skill levels, and the industries in which foreign workers are employed, which differs from Canada’s approach. Here’s an overview:

1. Work Passes and Permits
The law requires that all foreign workers have a valid work permit or pass to work in Singapore. The main types are:

A. Employment Pass (EP) – Designed for professionals, managers, and executives (PMEs).
• Eligibility:

o A minimum monthly salary of SGD 5,000 (higher for older, more experienced candidates).
o Relevant qualifications such as a degree or specialized skills.

• Duration: Typically issued for one to two years and renewable.
• Dependents: EP holders earning at least SGD 6,000 monthly can sponsor their dependents. An economic threshold is required, unlike in Canada.

B. S Pass – Designed for mid-level skilled workers.
• Eligibility:

o Minimum monthly salary of SGD 3,150 (higher for older, more experienced workers).
o Diploma-level qualifications or technical certifications.

• Quota: Employers are limited to a percentage of S Pass holders in their workforce.
• Levy: Employers pay a monthly levy for each S Pass worker.
• Dependents: Holders earning at least SGD 6,000 monthly can sponsor dependents.

C. Work Permit (WP) – Designed for low-skilled or semi-skilled workers.
• Eligibility:

o Typically issued to workers in construction, manufacturing, marine, process, and services sectors.
o Different quotas and levies apply depending on the industry.
o No minimum salary requirement.

• Duration: Usually valid for two years and tied to the employer.
• Nationality Restrictions: Limited to certain approved countries.
• Dependents: WP holders cannot sponsor dependents.

D. Other Passes – Designed for entrepreneurs intending to start businesses in Singapore.
• Personalised Employment Pass (PEP): For high-earning professionals with flexibility to switch jobs.
• Training Employment Pass/Work Permit: For foreign trainees undergoing practical training in Singapore.

2. Quotas and Levies
Singapore imposes quotas and levies on employers hiring foreign workers to encourage the hiring of locals.

• Quota System: Limits the proportion of foreign workers in specific industries.
• Levy System: Employers must pay a monthly levy per foreign worker, with rates varying by sector and the worker’s skill level.

3. Fair Consideration Framework (FCF)
The FCF ensures that employers consider Singaporean candidates fairly before hiring foreign workers. It includes:

• Advertising jobs on MyCareersFuture for at least 28 days before hiring foreign candidates.
• Regular audits to ensure compliance.

4. Dependency Ratio Ceilings (DRC)

• Employers must adhere to specific ratios of local to foreign employees.
• The DRC varies by industry, e.g., construction, manufacturing, and services sectors.

5. Skills Upgrading and Transfers
Programs like the Capability Transfer Program (CTP) encourage knowledge transfer from foreign professionals to Singaporean workers. The goal is to reduce dependency on foreign labor in the long run.

6. Challenges and Developments
Singapore’s foreign worker policies are continually adjusted to:

• Reduce reliance on foreign labor.
• Balance economic growth with social integration.
• Address local concerns about job competition and societal cohesion.

Recent trends include tighter quotas, higher levies, and enhanced requirements for certain sectors to prioritize local employment.

What Is Applicable to Canada?
We are already beginning to see more nuanced study permit streams with different privileges, and work permits are expected to follow suit. Could a monthly employer fee be in the works as a condition of LMIAs moving forward? If IRCC seeks to curb the number of workers beyond quotas, will employers be asked to pay a monthly fee? Some will argue this might deter “fake” job offers, as a direct link between employers and their financial services will be established with IRCC on an ongoing basis.
Additionally, unless there is a clear need, employers might not want to pay a fee each month, quarter, semester, or year. However, it would undoubtedly serve as a disincentive to extend a job offer. It will also be critical that employers do not attempt to recover these fees from potentially vulnerable employees. Levies tied to quotas may well be the future. It may be that specific industry quotas for foreign workers will be required, similar to Singapore’s system. Perhaps quotas could be linked to specific National Occupational Codes (NOCs).
So, there are many considerations—both pros and cons—regarding levies and quotas that must be carefully evaluated. Nevertheless, a deeper dive into the Singaporean model and their experiences may be worth exploring.