Canada Tightens Temporary Foreign Worker Rules as 50% Permits Fall

First, linkable resources in order of appearance:
1. Temporary Foreign Worker Program / TFWP (Government of Canada – Temporary Foreign Worker Program) — appears in body text and in Practical resources.

Now the article with the required .gov link added (only the first mention of the resource in the article body text is linked). No other changes made.

Canada is moving ahead with tougher rules on temporary labor, and the impact is already showing up in the numbers. Between January and June 2025, the country issued only 119,234 work permits, down from 245,137 in the same period of 2024—a 50% drop. Most approvals were concentrated in the Temporary Foreign Worker Program (TFWP), which issued 105,195 permits in the first half of 2025—already above the government’s full‑year target of 82,000.

The data point to a rapid shift: fewer new entries overall, tighter rules on who qualifies, and more controls on where and how employers can use foreign labor.

Policy direction and rationale

Prime Minister Mark Carney signaled the new direction on September 10, saying the TFWP would “target specific, strategic sectors, and needs in specific regions.” That translates into:

• Sectoral and regional filters
• Stricter wage rules
• Caps that squeeze low‑wage positions, particularly in areas with high unemployment

The government has maintained moratoriums on low‑wage Labour Market Impact Assessment (LMIA) processing in regions with unemployment above 6%, preventing employers in those areas from adding low‑wage temporary foreign workers.

Key rule changes and timelines

• Since November 8, 2024, the threshold for high‑wage TFWP positions is 20% above the regional median wage.
• Employers must pay the posted prevailing wage for the job and location and review wages each year.
• A cap introduced on September 26, 2024 limits most sectors to 10% of their workforce in low‑wage TFWP roles.
  • Exemptions: primary agriculture, healthcare caregiving, and short‑term/seasonal roles.
• Family access narrowed on January 21, 2025:
  • Spousal open work permits (SOWPs) now limited to spouses of TFWs in TEER 0 or 1, or select in‑demand TEER 2 and 3 jobs, and only when the principal worker has at least 16 months left on their status.
  • Dependent children are no longer eligible for open work permits.

Immediate data and trends

• Work permits fell steeply in spring 2025:
  • March: 18,540
  • May: 14,243
  • June: 11,287
• Those monthly figures are much lower than a year earlier, reflecting the policy shift.

VisaVerge.com reports this pullback is occurring alongside a slowdown in international study permits, suggesting a coordinated effort to cool temporary inflows, ease pressure on housing and services, and reset the immigration mix toward permanent residents matched to labor needs.

Reactions: politics, employers, and advocacy groups

• Conservative Leader Pierre Poilievre argues the TFWP reduces job options for Canadians and has called for its abolition.
• Small and medium‑sized businesses warn that blanket caps and higher wage thresholds may:
  • Worsen labor shortages
  • Delay projects
  • Raise consumer prices
• Advocacy groups contend the changes:
  • Do little to improve worker protections
  • Do not create better pathways to permanent residency
  • May hurt Canada’s reputation as a welcoming place to work and settle

The government defends the approach by pointing to the numbers: front‑loading TFWP approvals in early 2025 helped the program hit 105,195 permits in half a year—surpassing the 82,000 target and establishing a base for stricter intake later in the year. Officials say the changes ensure the TFWP is used only when no suitable Canadian worker is available and that wage rules prevent undercutting local pay.

Data transparency concerns

Immigration, Refugees and Citizenship Canada (IRCC) delayed the release of 2025 figures, drawing criticism from employers, economists, and community groups who argue that timely data is essential to:

• Plan hiring
• Budget for wage increases
• Assess program impacts

Without regular reporting, it is harder to judge whether caps, wage floors, and moratoriums meet their goals or simply shift demand across sectors and regions.

New compliance workflow for employers

The entry sequence still begins with an LMIA application to Employment and Social Development Canada (ESDC), but businesses now face extra hurdles:

1. Submit LMIA application to ESDC (with stricter eligibility)
2. Demonstrate recruitment efforts and meet higher wage thresholds
3. Observe hiring caps and regional moratoriums where applicable
4. Once LMIA is approved, worker applies for a work permit with IRCC
5. Spousal eligibility depends on TEER level and remaining permit time

Employers—especially SMEs—report fewer options and longer timelines, even when jobs remain unfilled for months.

Sectoral impacts and exemptions

• Exemptions / relative bright spots
  • Agriculture (seasonal and primary roles)
  • Healthcare caregiving, including long‑term care and home care
• Hardest hit sectors
  • Hospitality
  • Retail
  • Manufacturing

Many firms in affected sectors will either scale back recruitment or raise wages to attract domestic workers, even if labor remains tight.

Advocates say exemptions should include stronger safeguards: housing standards, fair scheduling, and protected reporting channels to prevent abuse.

Effects on workers, families, and pathways

• Opportunities in low‑wage and non‑priority sectors are shrinking.
• Even high‑wage roles face tougher wage floors.
• Families expecting two incomes may need to adjust if the principal worker is in a TEER 2/3 job not on the select list or has less than 16 months remaining.
• Students and those on study‑to‑work paths may face fewer options as student permit numbers fall and post‑graduation routes adjust.

Economic tradeoffs

• Potential benefits:
  • Reduced pressure on housing, classrooms, and public services in hot markets
• Potential costs:
  • Deeper staffing gaps in hospitality, food processing, and logistics
  • Shorter business hours, reduced output, and project delays
  • Increased automation or production shifts—possible but costly and time‑consuming

Compliance and enforcement expectations

Officials signaled more active audits, wage checks, and LMIA reviews. Recommended records and actions:

• Employers:
  • Keep documentation of Canadian recruitment efforts
  • Maintain annual wage review records aligned with prevailing rates
  • Track adherence to the 10% cap where applicable
• Workers:
  • Retain copies of contracts, pay stubs, and housing arrangements
  • Seek help if conditions differ from what was promised

Forward outlook and policy dynamics

The government will likely continue fine‑tuning sectoral and regional rules:

• If unemployment rises in a region, moratoriums could expand
• If shortages worsen in a critical field, more roles may receive priority

This dynamic approach aims to align labor supply with demand but also increases uncertainty. Companies with multi‑year plans must closely monitor policy updates and adapt hiring strategies—training local workers, expanding retention, or revising timelines.

VisaVerge.com’s analysis suggests the most durable change may be cultural: the TFWP is shifting from a broad relief valve for labor needs to a narrow tool reserved for cases where the economic case is strongest. That raises the bar for employers, tightens family access, and places more pressure on permanent residency pathways to handle long‑term workforce growth.

Practical resources

Workers and employers seeking official guidance should review the government’s program hub at the Government of Canada – Temporary Foreign Worker Program: https://www.canada.ca/en/employment-social-development/services/foreign-workers.html. The site outlines employer duties, wage requirements, sector rules, and regional measures, and is updated as policies change.

Key takeaway: The trend lines are clear—fewer work permits overall, a tighter TFWP, and a sharper policy focus on where and when temporary labor fits into Canada’s job market. The balance between employer needs, worker rights, and public concerns over housing and services will determine the program’s role going forward.

Policy Changes Overview

• New admissions target: 82,000 net new TFWP entries for 2025, with heavy front‑loading in H1.
• Regional moratoriums: Bans on low‑wage LMIA processing in areas with unemployment above 6%.
• Wage rules: High‑wage threshold at 20% above regional median; employers must pay prevailing wages and review yearly.
• Hiring cap: 10% ceiling on low‑wage TFWs in most sectors; exemptions for agriculture, caregiving, and short‑term/seasonal roles.
• Family access: SOWPs limited to spouses of TEER 0/1 or select TEER 2/3 workers with 16+ months left; dependent children no longer eligible for open work permits.

Impact on Applicants and Employers

• Employers:
  • Rising costs and fewer options
  • Increased investment in local hiring, training, and retention
  • Some may shift to automation or reduce growth plans
• Foreign workers:
  • Fewer openings and tougher family rules
  • Need for more careful planning or pursuit of alternative destinations/permanent pathways

IRCC’s delayed data release has clouded the picture, but indicators point to a smaller temporary pipeline, a tighter TFWP, and heightened scrutiny. As 2025 continues, policymakers will balance program objectives against the real‑world effects on businesses, workers, and communities.