The chair of the St.John's Board of Trade is warning that small businesses may be forced to close because of the changes to the Temporary Foreign Worker Program.

Sharon Horan says the changes to the program tie the ability for small businesses to hire to regional unemployment rates.

But she says those statistics are not local enough and therefore hurt businesses in towns such as Happy Valley-Goose Bay, which is booming even though the region to which it has been assigned by the federal government is generally not. That region includes communities in western and northern Newfoundland. 

Federal Employment Minister Jason Kenney announced an overhaul of the Temporary Foreign Worker program last Friday.

The changes include barring employers from hiring some low-wage temporary foreign workers in regions where the unemployment rate is above six per cent, in jobs such as cashiers, construction workers, food counter attendants and security guards, among others.

"If there's high unemployment on the northern peninsula of Newfoundland and Labrador, because Goose Bay may be in that same region, they're going to be unable to access a temporary foreign worker," says Horan.

Regional unemployment rate 16 per cent

In May, Statistics Canada reported that the unemployment rate for West Coast - Northern Peninsula - Labrador was 16.0 per cent. 

"Increasing fees, introducing a worker cap and reducing the amount of time they can work here will have a negative impact on many businesses, particularly those in the food service industry, which represents 15 per cent of our membership," Horan said in a statement.

"It is our fear some (small businesses) will have to close their doors unless some of these restrictions are lifted."

Lloyd Hillier, the owner of the Jungle Jim's restaurant in Happy Valley-Goose Bay, said that the restaurant may close next week if he can't hire temporary foreign workers to fill some positions.