Ottawa freezes low-wage LMIA applications for 3 new cities

Canada has expanded its freeze on processing low‑wage Labour Market Impact Assessment (LMIA) applications to Vancouver, Winnipeg and Halifax, tightening employers' and HR professionals' access to temporary foreign workers in additional urban centres where unemployment has risen.

Effective 10 April 2026, Employment and Social Development Canada (ESDC) updated its quarterly refusal‑to‑process list for the Temporary Foreign Worker Program (TFWP), adding the three cities to 27 other census metropolitan areas (CMAs) where low-wage Labour Market Impact Assessments (LMIAs) will not be processed through 9 July 2026, according to a release from Employment and Social Development Canada and a report from VisaHQ.

At the same time, the CMAs of Lethbridge, Red Deer, Kamloops and Chilliwack have been removed from the list. This means employers there can once again recruit low-wage foreign talent if they meet program rules.

In January, Canada’s federal government reopened the door to low‑wage foreign worker recruitment in eight urban centres.

Since Sept. 26, 2024, Ottawa has refused to process LMIA applications in the low-wage stream in census metropolitan areas with an unemployment rate of 6% or higher.

6% unemployment threshold

The changes stem from ministerial instructions that allow Service Canada to refuse LMIA applications for low-wage positions in CMAs with an unemployment rate of 6% or higher, as well as for positions above set caps on low‑wage roles, in‑home caregiver positions with live‑in requirements, and any position where an employer has had an LMIA revoked in the previous two years, according to ESDC guidance updated April 1 and 10, 2026.

ESDC guidance states that certain low‑wage LMIA applications submitted as of Sept. 26, 2024 “won’t be processed” if they involve “a wage below the provincial or territorial wage threshold, and a work location in a CMA with an unemployment rate of 6% or higher at the time of LMIA submission.” Employers whose files are refused under these measures are not charged processing fees and receive letters explaining why their applications were not processed.

Existing low‑wage work permits are not cancelled by the update, but renewals are in question. Foreign workers already holding valid low‑wage permits in the affected CMAs “are not immediately impacted, but renewals will be blocked unless the local unemployment rate improves by the next quarterly review on 10 July,” noted VisaHQ – a registered third party service provider with the US Department of State and foreign consular entities specialising in expediting passport and visa applications.

For the purposes of the TFWP, the low‑wage stream generally covers roles that pay less than 120 per cent of the regional median wage. These are often front‑line, entry‑level or support positions in sectors such as hospitality, retail, warehousing, food processing, and some care and service roles.

Caps on low‑wage headcount

Separate rules limit how many low‑wage temporary foreign workers an employer can have at a single location. “LMIA applications won’t be processed if the proportion of low-wage positions is above the 10% of the total workforce at a given work location,” ESDC guidance says.

For some sectors and occupations, a higher ceiling applies. “For the sectors, subsectors and occupations below, LMIA applications won’t be processed if the proportion of low-wage positions is above the 20% of the total workforce at a given work location: NAICS 23 – Positions in construction; NAICS 311 – Positions in food manufacturing; NAICS 622 – Positions in hospitals; NAICS 623 – Positions in nursing and residential care facilities; specific in-home caregiver positions in a private household,” the department states.

With low‑wage LMIAs barred in more CMAs, employers face a narrower set of options. “Employers that still need foreign staff have two main work-arounds: raise wages so the role qualifies for the high-wage LMIA stream, or pivot to occupations that are exempt from the ban (e.g., agriculture, construction and food manufacturing),” VisaHQ noted.

The firm added that “strategically, employers may find it cheaper to offer salaries at or above each province’s high-wage threshold (ranging from CAD 30.00 in Manitoba to CAD 36.60 in British Columbia) than to absorb the costs of repeated recruitment and onboarding.”

Multi‑region operations and rural relief

The evolving list of affected CMAs is particularly significant for employers operating across several regions. 

“For multinational companies with operations across Canada, the announcement complicates resource planning. Recruiters must now double-check the unemployment rate of the job location before filing a low-wage LMIA and may need to redispatch candidates to neighbouring regions where processing remains open,” VisaHQ said, adding that companies headquartered outside Canada should brief hiring managers and mobility teams on “the new map of ‘open’ and ‘closed’ regions.”

Alongside the urban freeze, ESDC has introduced “temporary measures for rural areas,” effective April 1m 2026, under which “employers in rural areas within participating provinces and territories may be eligible for temporary measures on the proportion of temporary foreign workers hired for certain low-wage positions.”

The unemployment‑rate table underpinning the refusal‑to‑process measures is updated every three months, with the next revision scheduled for July 10, 2026.

Last updated: April 10, 2026
Source: Statistics Canada, Labour Force Survey