Canada Tightens Rules for Temporary Foreign Workers: What Employers and Applicants Need to Know
- Mati Lio
- Oct 13, 2025
- 3 min read
In a significant policy shift, the Government of Canada has announced stricter regulations for the Temporary Foreign Worker Program (TFWP), aiming to prioritize employment opportunities for Canadians and permanent residents while ensuring that foreign labor is utilized only when necessary. These changes are part of a broader strategy to stabilize population growth and maintain immigration integrity.
Key Changes to the Temporary Foreign Worker Program
1. Reduced Usage and Stricter Requirements
The federal government has significantly reduced the use of the TFWP. Between September 2024 and September 2025, applications to the program decreased by 50% overall, with a 70% reduction in the low-wage stream. Employers must now demonstrate genuine efforts to recruit Canadian workers before hiring foreign labor. Additionally, they are required to continue recruitment efforts while their application is pending.
2. Increased Penalties for Non-Compliance
To ensure compliance, the government has doubled penalties for employers who violate program rules. In the 2024–2025 fiscal year, penalties more than doubled from $2,067,750 to $4,882,500, and 36 employers were banned from the program—a threefold increase from the previous year.
3. Stricter Caps on Low-Wage Positions
Employers are now subject to stricter caps on the number of low-wage temporary foreign workers they can hire. The cap has been reduced from 20% to 10% of the total workforce at a given work location. In regions with an unemployment rate of 6% or higher, applications for low-wage positions may be refused.
4. Higher Wage Thresholds
Effective June 27, 2025, Canada increased the wage thresholds for employers hiring through the TFWP. This adjustment affects nearly all provinces and territories and aims to ensure fair compensation and align wages for temporary foreign workers with Canadian labor market standards.
5. Limitations on Open Work Permits for Families
Starting January 21, 2025, Canada will significantly limit open work permits for family members of international students and temporary foreign workers. This policy change is part of broader efforts to reduce the number of temporary residents in the country.
Rationale Behind the Canada Temporary Foreign Workers Program Changes
These policy adjustments are part of Canada's broader strategy to reduce reliance on temporary foreign labor and prioritize employment for Canadian citizens and permanent residents. The government aims to address concerns related to housing affordability, youth unemployment, and pressure on social services. While these measures have been welcomed by some, they have also raised concerns among employers and advocacy groups about potential labor shortages and the treatment of foreign workers.
What This Means for the Future
The federal government has set targets to reduce the number of temporary residents to 5% of the total population over the next three years, including temporary foreign workers and international students. This initiative is expected to result in a marginal population decline of 0.2% in both 2025 and 2026, before returning to a population growth of 0.8% in 2027.
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Disclaimer
The information provided in this article is based on publicly available government sources as of October, 2025. For the most current and detailed information, please refer to official government websites or consult with immigration professionals.
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