Employment Minister Jason Kenney and Immigration Minister Chris Alexander have announced an overhaul of the Temporary Foreign Worker Program, effectively conceding there has been growing abuse of the program and a driving down of wages.

"We will better prevent and detect abuse and penalize employers who abuse the program," Kenney said. "We will severely sanction those who break the rules. We'll better protect foreign workers and we'll also recognize that Canada benefits from international mobility."

Kenney said the changes announced Friday are intended to send employers a clear signal that abuse of the program will not be tolerated and that they must redouble their efforts to hire Canadians first.

"You can't build your business model around it," Kenney said.

The minister described the new measures "as bold, broad, ambitious, and balanced."

The moratorium on the fast-food industry's access to the program is lifted immediately in light of the sweeping changes announced Friday.

The revamped program will bar employers from hiring foreign workers in regions where unemployment is high, it will put a cap on the number of workers employers can hire, include a more stringent screening process for employers to prove they need to hire a foreign worker over a Canadian one, and increase the number of spot checks in the workplace and fines for those who break the rules.

The Temporary Foreign Worker Program will now be divided into two programs: One — still called the TFWP — will require that employers prove the need to hire a non-Canadian worker. The other, to be called the International Mobility Program, won't.

Reforms to the program include:

Barring employers from hiring low-wage temporary foreign workers in regions where the unemployment rate is above six per cent.

A cap of 10 per cent on the number of low-wage temporary foreign workers employers can hire per work site by 2016.

The cap will be gradually phased in, starting at 30 per cent effective immediately, then reduced to 20 per cent on July 1, 2015, and 10 per cent a year later in 2016.

An increase in the number of inspections: one in four employers will be inspected each year. The government says it will hire approximately 20 more inspectors, bringing the number to about 60.

An increase from $275 to $1,000 in the application fee employers must pay per worker requested, effective immediately.

Fines of up to $100,000 for employers who abuse the program, starting in fall.

Additional funding for the Canada Border Services Agency so it can pursue more criminal investigations.

As CBC News reported on Thursday, the new rules will also include:

Posting the names of employers who receive permission to hire foreign workers.

Making public the number of positions approved through the program on a quarterly basis.

Reducing the amount of time a temporary foreign worker can be employed in Canada, to two years from four.

The majority of today's changes do not apply to employers who hire seasonal workers, live-in caregivers and nannies.

Fast-food businesses affected

The government has spent the last few months on the defensive after the program came under intense scrutiny following a series of stories by CBC Go Public's team reporting alleged abuses of the program by several employers, including three McDonald’s franchises in Victoria​.

The government suspended all pending foreign worker permits for the three McDonald’s locations owned by franchisee Glen Bishop and blacklisted his franchise from using the program, pending the outcome of the probe.

McDonald’s Restaurants of Canada Ltd. issued a statement today saying it has "always been committed to hiring Canadians first."

The statement said McDonald’s Canada hired Deloitte in May to conduct a compliance audit of its corporate and franchised restaurants’ use of the program. The report is expected to be completed soon.

As for the new rules, McDonald’s Canada said it is currently reviewing the extent of the changes.

Today, the government said it received growing reports of abuses, with over 1,000 complaints filed through a tip line launched on April 6.

Kenney said he heard time and again of Canadian workers not even receiving a phone call back from potential employers in the fast-food industry.

"That really ticks me off," Kenney said.

The minister said he expects the new measures will have a significant effect on some businesses, particularly on those in the fast-food sector.

"I must tell you how disturbed I have been to learn about businesses in that sector opening up new stores, new franchises, in areas where they tell us there are no local workers available."

"That is clearly an abuse," Kenney said.

Alberta, business groups unhappy

Garth Whyte of Restaurants Canada, a national association which represents 30,000 members including restaurants, bars and other food service providers, told CBC News "the rules have become so stringent that's it's going to be very difficult for our members to access it."

"What this highlights, to me, is that the government still is diddling around not having an overall labour shortage strategy," Whyte said.

Kenney said again today the government would be spending $14 million to fund two new labour market studies — a quarterly study on job vacancies and an annual survey on wage rates.

The Canadian Federation of Independent Business, a group generally supportive of this government's initiatives, said today's announcement was "a gross overreaction to a handful of negative stories."

“Regional jobless rates mean very little to a small business owner who can’t find enough interested workers to keep the doors open,” said Dan Kelly, the president of the CFIB, in a written statement.

“Unless the federal government is prepared to force unemployed Canadians to move to take jobs they don’t want, these changes leave a huge gap for employers."

Alberta Minister of Jobs, Skills, Training and Labour Kyle Fawcett, Kenney's provincial counterpart, said while there are some positive changes to the program, on the whole he said the new measures are not good for Alberta.

Fawcett described it as "bad economic policy" for Alberta.

Political reaction

NDP MP Pat Martin said today's changes acknowledge that the program is broken but said they do little to fix it.

"A bit of tweaking and tinkering on the front end is not going to protect Canadian jobs."

"First they weakened the program and made it easier to abuse and now they're trying to reverse the damage they caused," Martin said. "They're not really ... protecting Canadian jobs or raising wages for Canadians ... nor are they taking active steps to protect foreign workers from abuse. They're just making it a little more uncomfortable for employers to use the program."

Liberal MP John McCallum wondered how the government would meet its commitment to increase the number of inspections without hiring significantly more inspectors.

Government officials today could not say exactly how many inspectors are currently tasked with conducting spot checks, only that the number is in the range of 40 and that they expect to hire approximately 20 more.

"I say that lacks credibility. I say as well, if the government is serious about enforcement against worker abuse they should enlist the help of the provinces," McCallum said.