Canada Just Raised Temporary Foreign Worker Program Wage Thresholds

In a major policy shift aimed at balancing labour market needs and addressing domestic economic concerns, Canada has raised the wage thresholds for its Temporary Foreign Worker Program (TFWP). This change, implemented by Employment and Social Development Canada (ESDC), directly affects foreign workers and employers relying on the TFWP to fill workforce gaps. As Canada grapples with housing affordability and growing pressure on social services, this wage increase plays a critical role in reshaping how temporary foreign labour is managed. The updated wage requirements, effective June 27, 2025, influence eligibility criteria under high-wage and low-wage streams of the TFWP.

1. Restructuring Access to High- and Low-Wage Streams

One of the most immediate effects of the new wage threshold is how it changes the classification of TFWP applications. Foreign workers earning above the updated provincial threshold must now be processed under the high-wage stream, while those earning below it will fall into the low-wage stream category. For instance, in Ontario, the threshold increased from CAD $34.07 to CAD $36.00—a 5.66% rise.

This shift will likely alter how employers budget for labour, compelling many to reconsider compensation strategies. More importantly, it reinforces fair pay practices, ensuring that foreign workers receive competitive wages aligned with regional market conditions.

2. Restricted Access to LMIA in High Unemployment Areas

An essential implication of this change lies in the low-wage LMIA moratorium for regions with an unemployment rate of 6% or higher. This means employers located in affected Census Metropolitan Areas (CMAs) such as Toronto (8.6%), Vancouver (6.6%), and Edmonton (7.3%) cannot hire through the low-wage stream, even if roles previously qualified.

Explore Canada’s broader strategy to protect foreign workers

This geographic targeting ensures that the program doesn’t displace Canadian job seekers in regions struggling with employment, maintaining the program's integrity and protecting vulnerable workers.

3. Capping Low-Wage Employment in Workplaces

ESDC also imposed restrictions based on workforce composition. If low-wage foreign workers comprise more than 10% of the total workforce at a given location, LMIA applications for additional low-wage roles will not be processed. Certain sectors like construction, food manufacturing, hospitals, and elder care are permitted up to 20% foreign low-wage workers.

This policy compels employers to prioritize local hiring, reducing over-reliance on foreign labour and encouraging investment in domestic workforce development.

4. Reflecting Canada's Broader Immigration Policy Trends

This wage threshold increase is part of Canada’s broader immigration recalibration in 2024–2025, which also included:

• Reducing LMIA validity from one year to six months

• Shortening low-wage work permit durations

• Limiting study permits and visitor-to-worker permit transitions

• Introducing net new foreign worker admission caps

Learn more about the TFWP from this high-authority source

This cohesive strategy signals a shift towards sustainable immigration, aiming to ease pressure on housing and services while still supporting critical sectors.

5. Increased Compliance and Monitoring

By introducing tighter wage requirements and regional employment filters, ESDC and Immigration, Refugees and Citizenship Canada (IRCC) can more effectively monitor compliance. Employers must now align compensation practices with regional standards and navigate a narrower framework for foreign labour recruitment.

These updates promote transparency and fairness, while curbing exploitation and abuse, which had drawn criticism toward the TFWP in recent years.

Canada's decision to raise wage thresholds under the TFWP is a significant step in refining the balance between foreign worker needs and domestic economic stability. By reinforcing regional employment priorities, fair wages, and ethical hiring practices, the policy strengthens the program's integrity.

Employers and foreign nationals must stay informed to navigate these changes effectively. For personalized guidance, schedule a consultation with A2Zimmi to understand how these updates affect your immigration or hiring strategy.

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