Canada’s Temporary Foreign Worker Program (TFWP) is undergoing major reforms in 2025. These changes introduce tougher rules for Labour Market Impact Assessments (LMIAs), restrict job categories, and shift focus toward protecting Canadian jobs and foreign worker rights. The new rules aim to ensure that employers only hire from abroad when no Canadian is available, while also improving fairness and transparency in the system.
Whether you’re an employer, foreign job seeker, or immigration advisor, understanding these changes is essential. This article breaks down the new TFWP regulations, offers practical insights, and answers key questions.
TFWP Policy Changes at a Glance
| Policy Change | New Rule | Effective Date |
|---|---|---|
| LMIA Validity Period | LMIA approvals are now valid for only 6 months instead of 12. | May 1, 2024 |
| Low-Wage LMIA Restrictions | No LMIAs for low-wage jobs in areas with over 6% unemployment, with exceptions for key sectors. | Sept 26, 2024 |
| Low-Wage TFW Duration | Maximum duration for low-wage TFWs reduced from two years to one year. | Sept 26, 2024 |
| Cap on Low-Wage Foreign Workers | Reduced to 10% per business, except 20% for construction and healthcare. | Sept 26, 2024 |
| Higher Pay for High-Wage TFWs | Wages must be 20% higher than the provincial median for high-wage positions. | Nov 8, 2024 |
| Removal of Employer Attestations | Employers must now submit full financial documentation-no more attestations. | Oct 28, 2024 |
These 2025 reforms significantly reshape how companies can recruit temporary foreign workers. With tighter deadlines, wage hikes, and stricter employer requirements, businesses and workers alike must prepare for a more regulated environment.
Why Is Canada Reforming the TFWP?
The federal government’s aim is to:
- Prioritize Canadian Workers – Ensure local talent has the first opportunity for employment.
- Protect Foreign Workers – Reduce exploitation and improve working conditions and wages.
- Encourage Competitive Pay – Stop wage suppression by requiring higher salaries for foreign hires.
- Strengthen Oversight – Crack down on abuse by making employer validation more rigorous.
What Is a Labour Market Impact Assessment (LMIA)?
An LMIA is a document employers need before hiring foreign nationals. It proves that no qualified Canadians or permanent residents are available to fill the role. Due to the new changes, obtaining an LMIA has become more demanding and time-sensitive.
Key Reform Highlights (With Practical Examples)
1. Shorter LMIA Validity
Before: LMIAs remained valid for 12 months.
Now: Employers only have 6 months to use the approval.
Example: A Toronto restaurant receiving an LMIA in January 2025 must complete the hire by June 2025 or reapply.
2. Tightened Low-Wage LMIA Criteria
LMIAs for low-wage jobs will no longer be processed in regions with unemployment above 6%, except for agriculture, food processing, healthcare, and construction.
Example: A retail store in Alberta (unemployment at 7%) cannot apply to hire foreign cashiers.
3. Shortened TFW Duration for Low-Wage Jobs
Before: Foreign workers could stay up to 2 years.
Now: The stay is capped at 1 year.
Example: A hotel hiring cleaners must renew the LMIA annually.
4. Lower Cap on Foreign Staff
Employers are now limited to 10% foreign workers in low-wage roles, unless in construction or healthcare (20%).
Example: A 50-employee restaurant can employ only 5 foreign workers under the new rule.
5. Higher Wages for High-Skilled Foreign Workers
Employers must offer 20% more than the provincial median wage.
Example: If Ontario’s median wage is $27/hour, high-wage TFWs must earn at least $32.40/hour.
6. No More Employer Attestations
Lawyer or accountant attestations are no longer accepted as proof of business legitimacy. Full documentation-such as tax returns and payroll records-is required.
Example: A construction firm must now submit thorough business records with its LMIA application.
Tips for Employers Adjusting to the New TFWP Rules
- Act Fast After LMIA Approval – With a 6-month limit, begin recruitment immediately after receiving approval.
- Review Compensation Packages – Ensure wages for high-wage positions meet the 20% premium over provincial medians.
- Track Staff Composition – Stay within the 10% cap for low-wage foreign workers (20% for healthcare/construction).
- Gather Strong Documentation – Be ready to submit detailed business records during the LMIA process.
- Consider Immigration Alternatives – Explore options like Express Entry, Provincial Nominee Programs (PNPs), or employer-specific work permits for long-term hiring.
Frequently Asked Questions (FAQs)
1. Can companies still hire foreign workers?
Yes, but they must meet stricter criteria, including wage benchmarks and detailed documentation. The LMIA process is now more selective.
2. Which industries are most impacted?
Sectors dependent on low-wage labor-like hospitality, retail, and manufacturing-will face the biggest challenges under the new rules.
3. What if an employer exceeds the foreign worker cap?
They will be denied LMIA approval and cannot hire additional foreign workers beyond the set cap.
4. Are agricultural jobs affected?
No. Agriculture remains largely exempt due to chronic labor shortages in the sector.
5. Can temporary foreign workers apply for permanent residence?
Yes, many TFWs may be eligible to transition to PR through programs like Express Entry, PNPs, or the Atlantic Immigration Program.
Canada’s 2025 TFWP reforms mark a significant shift in how employers source international talent. While they aim to protect Canadian workers and uphold fair labor standards, they also demand greater planning and compliance from businesses. By staying informed and proactive, employers can continue to meet staffing needs while navigating a more responsible and transparent hiring framework.
