Canada TFWP Reform: Canada’s Temporary Foreign Worker Program (TFWP) is undergoing major reforms in 2025, bringing stricter Labour Market Impact Assessment (LMIA) rules and changes in job categories. The goal? To ensure Canadian workers are prioritized, foreign workers are treated fairly, and businesses only hire from abroad when absolutely necessary.
For employers, job seekers, and immigration consultants, these changes are crucial to understand. This article breaks down the new TFWP rules, provides practical advice, and answers frequently asked questions.
Canada TFWP Reform
| Policy Change | Details | Effective Date |
|---|---|---|
| LMIA Validity Period | The validity period for an approved LMIA has been reduced from 12 months to 6 months. | May 1, 2024 |
| Stricter LMIA Rules for Low-Wage Jobs | No LMIAs will be processed in regions with unemployment rates above 6%, except for agriculture, food processing, construction, and healthcare. | Sept 26, 2024 |
| Maximum Duration for Low-Wage TFWs | Reduced from two years to one year for temporary foreign workers hired in low-wage positions. | Sept 26, 2024 |
| Caps on Low-Wage Foreign Workers | The percentage of low-wage foreign workers a company can hire has been reduced from 20% to 10%, except for construction & healthcare (20% cap). | Sept 26, 2024 |
| Higher Wages for High-Wage TFWs | Employers must now offer 20% above provincial median wages to hire temporary foreign workers in high-wage streams. | Nov 8, 2024 |
| Employer Attestations Eliminated | Employers can no longer use attestations from lawyers/CPAs to prove business legitimacy—additional documentation is required. | Oct 28, 2024 |
Canada’s 2025 TFWP reforms bring major changes to how businesses hire foreign workers. Shorter LMIA validity, wage increases, job restrictions, and stricter employer requirements mean both employers and workers must plan carefully.
While these changes ensure Canadian workers are prioritized, they also challenge industries that depend on foreign labor. Businesses must adapt by streamlining hiring processes, offering competitive wages, and complying with new LMIA policies.
Why These Changes? Understanding the TFWP Reforms
The Canadian government is making these sweeping changes to:
Reduce Unemployment – By ensuring Canadian workers get priority for available jobs.
Protect Temporary Foreign Workers – Preventing exploitation and ensuring fair wages.
Encourage Higher Wages – Employers must offer higher salaries to foreign workers instead of undercutting local wages.
Ensure Businesses Follow Rules – Stricter employer verification prevents fraud and misuse of the system.
What is the Labour Market Impact Assessment (LMIA)?
The LMIA is a document employers must obtain before hiring foreign workers. It proves that no Canadian is available to fill the job. However, getting an LMIA is now tougher due to the new rules.
Key Changes Explained (With Examples)
Shorter LMIA Validity Period
- Before: Employers had 12 months to hire foreign workers after getting an LMIA.
- Now: They only have 6 months.
- Example: If a restaurant in Toronto receives an LMIA in January 2025, it must hire the worker by June 2025. Otherwise, they must apply again.
Stricter Rules for Low-Wage Jobs
- LMIAs won’t be processed in high-unemployment areas (6%+ unemployment).
- Exempt Sectors: Agriculture, food processing, healthcare, and construction.
- Example: A retail store in Alberta (unemployment rate 7%) CANNOT hire foreign cashiers under TFWP.
Lower Maximum Duration for Low-Wage TFWs
- Before: Foreign workers in low-wage jobs could stay up to 2 years.
- Now: Their stay is limited to 1 year.
- Example: A hotel hiring housekeepers under TFWP must now renew the LMIA every year instead of every two years.
Lower Cap on Low-Wage Foreign Workers
- General Rule: Only 10% of a company’s workforce can be foreign workers.
- Exception: Construction & Healthcare companies can hire up to 20%.
- Example: A restaurant with 50 employees can only have 5 foreign workers (10%).
Higher Wages for High-Wage Workers
- Employers must offer at least 20% above the provincial median wage for high-wage jobs.
- Example: If Ontario’s median wage is $27/hour, high-wage foreign workers must be paid at least $32.40/hour.
No More Employer Attestations
- Employers must submit financial records, tax returns, and payroll information instead of a simple attestation from an accountant/lawyer.
- Example: A construction firm must now provide detailed records to prove business legitimacy.
Practical Tips for Employers Navigating TFWP Changes
Plan Recruitment Early – With shorter LMIA validity, start hiring immediately after approval.
Review Wage Structures – Ensure wages meet 20% above median if hiring under the high-wage stream.
Track Workforce Composition – Make sure low-wage foreign workers don’t exceed 10% of staff.
Prepare Strong Documentation – Employers must provide detailed financial and operational records for LMIA applications.
Explore Alternative Hiring Options – Consider Express Entry, Provincial Nominee Programs (PNP), or employer-specific work permits.
Claim $191.75 Monthly Tax-Free Income With Your TFSA – Check Claim Process, Eligibility
$2,500 + $1,700 + $850 Retirement Benefits in 2025 – Check Your Payment Date & Eligibility
GST Payments Increasing in 2025 – $519, $650 & $171 Extra for Eligible Canadians!
FAQs About Canada TFWP Reform
1. Can businesses still hire temporary foreign workers in Canada?
Yes, but stricter rules apply. Employers must prove no Canadians are available, offer higher wages, and comply with new LMIA restrictions.
2. What sectors are affected the most?
Industries that rely on low-wage workers, like hospitality, retail, and manufacturing, will find it harder to hire foreign workers.
3. What happens if an employer exceeds the 10% cap on foreign workers?
They won’t be approved for an LMIA, meaning they can’t hire additional foreign workers.
4. Are farm workers affected?
No. The agriculture sector is exempt from many new rules due to labor shortages.
5. Can foreign workers stay in Canada permanently?
Some may qualify for Permanent Residency (PR) through programs like Express Entry, PNP, or the Atlantic Immigration Program.
