Canada has introduced a significant policy shift by ending wage assessments under the Temporary Foreign Worker Program (TFWP). Going forward, all work permit applications will rely on wage data contained within the Labour Market Impact Assessment (LMIA), streamlining oversight and strengthening compliance.

Under the revised framework, the previous wage assessment requirements attached to the TFWP have been removed. While the program continues to operate, authorities will now process work permit applications strictly through the LMIA-based wage system.

An LMIA is a document Canadian employers may need before hiring a foreign worker, confirming both the need for a temporary employee and the unavailability of a Canadian citizen or permanent resident for the role. A positive LMIA—often called a confirmation letter—allows the employer to proceed with the hiring process.

To obtain an LMIA, employers must apply through Employment and Social Development Canada (ESDC). Once approved, the foreign worker can apply for a work permit by submitting the LMIA, its corresponding number, a job offer letter, and an employment contract.

The broader reform comes amid increased scrutiny of the TFWP over alleged misuse and fraud. The Canadian government has emphasized measures that safeguard domestic job opportunities and reduce over-reliance on temporary foreign labour.

Since September 26, 2024, Canada has implemented targeted restrictions, particularly for low-wage streams in metropolitan regions with unemployment rates of 6% or higher. Exceptions exist for certain seasonal and non-seasonal jobs in sectors such as food security, construction, and healthcare.

Additional reforms include reducing the cap on temporary foreign workers to 10% of an employer’s total workforce under the Low-Wage stream, cutting the maximum work duration from two years to one year, shortening LMIA validity from 18 months to six months, and implementing region-specific measures such as temporary pauses in Montreal.

For both employers and workers, the changes reinforce stricter compliance. Employers must secure an LMIA before proceeding, while workers must submit the LMIA number and supporting documents during their work permit application. The overarching goal is to balance labour market needs with fair protections and ensure that Canadian workers remain the priority.