Canada Updates TFWP Rules to Give Small Employers More Hiring Flexibility. Check Your Eligibility!

Canada has revised its Temporary Foreign Worker Program (TFWP) rules to allow certain small work locations to hire more low-wage temporary foreign workers. Employers with fewer than 10 employees at a particular work location can now hire up to one low-wage worker. Employers in selected in-demand sectors, including health care, construction, and food production, may hire up to two workers under the revised calculation.

Under the revised calculation, an employer with fewer than 10 employees at a particular work location can hire up to one low-wage temporary foreign worker. Employers operating in eligible in-demand sectors can hire up to two workers. The change applies when the standard workforce cap would otherwise allow the employer to hire fewer than the permitted number of workers.

Employers in three identified in-demand sectors can hire up to two low-wage temporary foreign workers at eligible small work locations. These sectors are:

• Health Care
• Construction
• Food Production

The higher allowance is linked to the existing 20% low-wage workforce cap for these sectors, compared with the standard 10% limit applicable to many other employers.

A position is considered low-wage when its pay falls below 120% of the applicable regional median wage listed on Canada's federal Job Bank. The exact threshold varies by location. For example, the low-wage threshold cited for Ontario is $36.92 per hour. Jobs that meet or exceed the relevant threshold can generally fall under the high-wage stream instead.

Employers generally need a positive or neutral Labour Market Impact Assessment (LMIA) to hire or retain foreign workers through the Temporary Foreign Worker Program. The LMIA is intended to demonstrate that qualified Canadian citizens or permanent residents are not available for the position.

However, not every Canadian work permit requires an LMIA because many permits are issued through the International Mobility Program (IMP).

Yes, eligible Indian workers could potentially benefit if Canadian employers create additional positions under the revised workforce calculations. The changes may be particularly relevant to workers seeking opportunities in:

• Health Care
• Construction
• Food Production
• Eligible Rural Locations

However, the rule change does not automatically provide Indians with work permits. Workers still need an eligible job and must meet applicable immigration and work permit requirements.

Employers hiring through Canada's low-wage TFWP stream must continue meeting several worker-protection requirements, including:

• Paying transportation costs to and from Canada
• Providing access to suitable housing costing less than 30% of the worker's pre-tax income
• Purchasing private health insurance when provincial or territorial coverage is unavailable
• Meeting all applicable LMIA and TFWP requirements

Since March 13, 2026, provinces have been allowed to increase the low-wage workforce cap to 15% for eligible employers in rural areas. This provides additional flexibility for rural businesses facing labour shortages.

The measure is separate from the revised small-work-location calculation and depends on the applicable provincial rules and whether the employer and location qualify for the rural provision.

Yes. Canada continues to maintain a moratorium on LMIA applications for low-wage jobs in urban areas where the unemployment rate is above 6%. This restriction has been in place since September 2024.

Therefore, the revised small-employer calculation does not mean every Canadian employer can hire low-wage foreign workers. Location, sector, workforce size, and applicable LMIA restrictions still need to be considered.

Under Canada's 2026 immigration levels plan, the federal government expects to admit:

• 60,000 foreign workers through the Temporary Foreign Worker Program (TFWP)
• 170,000 foreign workers through the International Mobility Program (IMP)

The International Mobility Program generally does not require an LMIA. These figures reflect Canada's broader approach to managing temporary migration while responding to labour market needs.