Canada Revises Work Permit Rules to Boost Hiring of Low-Wage Foreign Workers

On 18 August 2026, Canada’s Employment and Social Development Canada (ESDC) announced key amendments to the Temporary Foreign Worker Program (TFWP) aimed at easing labour shortages in low-wage sectors.

The revised rules now permit eligible employers with fewer than 10 employees at each work location to hire one low-wage foreign worker per site. For sectors such as healthcare, construction, and food production, the allowance increases to two workers per location. This change shifts the previous cap from a total workforce basis to a per-site calculation, enhancing flexibility for small businesses operating multiple locations.

Understanding the New Hiring Caps

• Employers must include all full-time, part-time (counted as half if under 30 hours weekly), and temporary foreign workers with approved Labour Market Impact Assessments (LMIAs) in their staffing counts.
• Eligible positions classified as low-wage pay less than 120% of the regional median wage; for example, in Ontario, this threshold is CAD 36.92 (KSh 5,325) per hour.
• Low-wage stream employers are required to pay return travel costs, ensure accommodation expenses remain below 30% of pre-tax income, and provide private health insurance if provincial coverage is unavailable.

Provincial Adjustments and Labour Market Conditions

Since March 2026, provinces can raise the low-wage cap to 15% for rural employers to address regional staffing challenges. However, a freeze on low-wage LMIA applications remains in place for urban areas with unemployment rates exceeding 6%, effective since September 2024.

Program Context and Future Outlook

The TFWP operates separately from Canada’s International Mobility Program (IMP), which issues most work permits without requiring LMIAs. Under Canada’s 2026 immigration plan, 60,000 foreign workers will be admitted via the TFWP, with an additional 170,000 through the IMP.