Canada Revises Low-Wage Foreign Worker Rules for Employers with Multiple Locations
New Hiring Flexibility for Multi-Site Employers Under Canada’s TFWP
Canada has updated the Temporary Foreign Worker Program (TFWP), giving businesses with small work locations more flexibility when hiring low-wage foreign workers.
As of August 18, 2026, eligible employers may hire one or two low-wage temporary foreign workers at locations with fewer than 10 employees. Previously, this calculation generally applied only to employers with fewer than 10 employees across their entire Canadian operation.
The change may affect how multi-site employers in Surrey and across Canada assess their staffing capacity under the TFWP.
How the Low-Wage Workforce Cap Works
Under the TFWP, positions are generally classified as low-wage or high-wage based on the role’s pay. A position may fall under the low-wage stream when its wage is below 120% of the regional median wage listed on the federal Job Bank.
Most employers using this stream are subject to a 10% workforce cap. A 20% cap applies to certain sectors with significant labour needs, including health care, construction, and food production.
The cap is assessed during the LMIA process. Before a foreign national can apply for a Work Permit through the TFWP, the employer generally needs a positive or neutral LMIA.
The LMIA process examines whether qualified Canadian citizens or permanent residents are available to fill the position before hiring a temporary foreign worker.
A New Calculation for Small Work Locations
The August 2026 update expands an alternative method for calculating the low-wage workforce cap by allowing ESDC to assess the workforce at an individual work location rather than the employer’s total Canadian workforce.
Previously, this calculation generally applied only to employers with fewer than 10 employees nationwide. The revised policy can matter for companies operating multiple small branches.
For example, a company may have a large workforce across Canada but fewer than 10 employees at individual locations. Previously, the company’s overall size could restrict its ability to hire low-wage temporary foreign workers at those smaller sites.
Under the revised policy:
- Employers subject to the 10% cap may hire one low-wage temporary foreign worker at a qualifying location with fewer than 10 employees.
- Employers in sectors subject to the 20% cap may hire up to two workers at a qualifying small location.
This change creates additional recruitment options for employers operating multiple small worksites.
Why the Change May Matter for Employers
Businesses may operate within regional, provincial, or national networks with multiple locations, each with different staffing needs. A company may have a large overall workforce while maintaining smaller branches that require additional employees.
The revised calculation allows employers to assess the low-wage workforce cap based on the workforce at a relevant location.
However, meeting the workforce cap does not guarantee LMIA approval or a Work Permit. Employers must still meet applicable recruitment, wage, documentation, housing, transportation, and other TFWP requirements.
Each proposed hire should be assessed based on:
- Employees at the specific location;
- The applicable wage threshold;
- The employer’s industry or sector;
- Current unemployment restrictions;
- Recruitment activities; and
- LMIA requirements.
What Counts Toward the Workforce Calculation?
ESDC’s workforce calculation for a particular location can include more than the people currently working at that site.
The calculation generally includes:
- Full-time employees;
- Part-time employees;
- Temporary foreign workers with approved LMIAs who have not yet started working; and
- Vacant positions for which the employer is requesting workers through an LMIA application.
Part-time employees are counted differently. An employee who works an average of fewer than 30 hours per week counts as 0.5 of an employee for the workforce calculation.
These figures can affect the number of low-wage workers an employer may request. Companies considering a Work Permit application should ensure that their workforce numbers are current and supported by appropriate records.
Wage Thresholds and the High-Wage Stream
The wage associated with a position plays a major role in determining which TFWP stream applies.
When the pay for a role is below 120% of the regional median wage, the position generally falls under the low-wage stream. When the wage reaches or exceeds the applicable threshold, the high-wage stream may apply.
For Ontario, the threshold referenced at the time of the policy update was $36.92 per hour.
Wage thresholds can vary by region and may change over time. Employers should therefore verify the current figures through the federal government before filing an application.
High-wage positions are not subject to the low-wage workforce cap. However, meeting the wage threshold does not remove the need to satisfy the requirements connected to the applicable TFWP stream.
The LMIA and Work Permit Process
For many TFWP cases, an employer must first obtain a positive or neutral LMIA from ESDC. The assessment considers factors such as recruitment efforts and the potential impact of hiring a foreign worker on the Canadian labour market.
After a qualifying LMIA is issued, the foreign national may apply for a Work Permit, subject to immigration and admissibility requirements.
An LMIA and a Work Permit serve different purposes. The LMIA assesses the employer and position, while the Work Permit authorizes the foreign national to work in Canada through a separate application process.
To continue employing an existing foreign worker, another LMIA may be required before a renewed Work Permit application.
Because recruitment, LMIA processing, and immigration applications involve separate stages, employers should plan each step carefully.
Additional Requirements for Low-Wage Employers
Employers using the low-wage stream have responsibilities beyond complying with the workforce cap.
Depending on the circumstances, these obligations may include paying for the worker’s transportation to Canada and return travel after the employment period.
Employers must also address housing requirements. The worker must have access to suitable housing, with costs generally limited to less than 30% of the worker’s pre-tax income.
If the worker is not covered by publicly funded provincial or territorial health insurance, the employer may also need to purchase private health insurance.
Failure to meet program obligations can lead to serious consequences and may affect an employer’s future participation in the TFWP.
Rural Workforce Cap Changes
Another policy change took effect on March 13, 2026.
The federal government gave provinces the ability to increase the low-wage workforce cap to 15% for eligible employers in rural areas.
This measure operates separately from the August 2026 update involving work locations with fewer than 10 employees.
Different cap rules may apply depending on the employer’s location, sector, workforce, and other circumstances. A rule available to an employer in a rural community does not automatically apply to a business operating at a site in Surrey or another urban area.
Urban Unemployment Restrictions Still Apply
The new calculation does not override restrictions affecting low-wage LMIA applications in certain urban areas.
Since September 2024, employers have faced restrictions on hiring or renewing workers through the low-wage stream in metropolitan areas where unemployment exceeds 6%, subject to applicable exceptions and rules.
This means that an employer may have space available under the workforce cap while still encountering another obstacle during the LMIA process.
Before starting recruitment or preparing a Work Permit strategy, employers should review current unemployment data and determine whether the proposed work location falls within an affected area.
TFWP and the International Mobility Program
Not every foreign worker comes to Canada through the TFWP.
The International Mobility Program (IMP) provides another pathway for many foreign nationals. Unlike the TFWP, the IMP generally includes LMIA-exempt categories.
The TFWP is commonly used when an employer must demonstrate a labour market need for foreign workers. The IMP includes various LMIA-exempt categories based on economic, social, cultural, reciprocal, or other legal considerations.
According to the immigration levels figures referenced in the policy discussion, Canada plans to admit 60,000 foreign workers through the TFWP and 170,000 through the IMP during the year.
Choosing the appropriate pathway can affect documentation, eligibility, timing, and the type of Work Permit being requested.
What Should Employers Do Next?
The August 2026 policy update may create additional hiring opportunities for employers with several small work locations.
A company should begin by identifying the exact location where the foreign national will work and calculating the workforce at that site according to ESDC’s methodology.
The employer should then determine:
- Whether the position falls under the low-wage or high-wage stream;
- Which workforce cap applies?
- Whether unemployment restrictions affect the location;
- Whether the sector qualifies for a higher cap;
- Whether recruitment requirements have been met; and
- What obligations apply after hiring the foreign worker?
For businesses with multiple locations, a location-by-location review may now be particularly important.
FAQs
1. Can a multi-site employer hire more low-wage temporary foreign workers under the new rule?
Yes. Under the August 2026 update, the alternative calculation can apply to individual work locations with fewer than 10 employees. Employers subject to the 10% cap may be able to hire one low-wage worker at such a location, while eligible employers in sectors subject to the 20% cap may be able to hire two.
2. Does the new rule automatically lead to LMIA approval or a Work Permit?
No. The policy changes the workforce-cap calculation in qualifying situations. Employers must still meet the relevant TFWP and LMIA requirements, while the foreign national must separately meet the immigration requirements for a Work Permit.
3. How are part-time employees counted for the workforce cap?
Employees who work an average of fewer than 30 hours per week are generally counted as 0.5 employees for the workforce calculation.
4. Are high-wage positions subject to the low-wage workforce cap?
No. Positions classified under the high-wage stream are not subject to the low-wage workforce cap. The applicable stream depends on the wage for the position compared with the current regional threshold.
5. Can a Surrey employer use the new small-location calculation?
Potentially. The employer must have a qualifying work location with fewer than 10 employees and meet the other applicable program requirements. The work location, sector, wage, workforce calculation, and current federal restrictions should all be reviewed before filing an LMIA application.
Moving Forward
Visa Harbour Immigration assists employers and foreign nationals in Surrey with employer-supported applications and foreign worker pathways.
A TFWP-related Work Permit case may involve reviewing the position and work location, preparing an LMIA application, and completing the worker’s immigration application after an LMIA decision.
Key considerations can include eligibility, immigration status, supporting documents, workplace requirements, and federal program rules for new or renewed Work Permits.
Contact Visa Harbour Immigration in Surrey to discuss your employer-supported immigration matter and explore the available pathways for your situation.
