Unemployment rate in 8 urban centres drops below 6 percent, cancelling freeze on low-wage foreign worker applications
Canada’s federal government has quietly reopened the door to low‑wage foreign worker recruitment in eight urban centres, a shift that will matter for HR leaders struggling to fill frontline roles – and for employers who had pinned workforce plans on the Temporary Foreign Worker Program (TFWP).
As of Jan. 9, 2026, Service Canada has resumed processing Labour Market Impact Assessment (LMIA) applications in the low‑wage stream for Vancouver, Winnipeg, Kingston, Halifax, Moncton, Saint John, Fredericton and Montréal, after local unemployment rates in each of these census metropolitan areas (CMAs) fell below six per cent.
The change reverses a freeze introduced in 2025 that stopped employers in specified CMAs from accessing the low‑wage stream where unemployment was at or above six per cent. Ottawa publishes a list of eligible and ineligible regions on a quarterly basis; the latest update took effect on Jan. 9, with the next review scheduled for April 10.
For HR leaders, the resumption means low‑wage foreign recruitment can once again be part of the staffing toolkit in these labour markets – but only within a policy framework that remains deliberately stringent.
Why low‑wage LMIAs were frozen
Under Employment and Social Development Canada (ESDC) rules, employers using the low‑wage stream must clear several hurdles before hiring through the TFWP. LMIA applications are tied directly to local labour conditions, and the federal government has created a bright‑line test for higher‑unemployment regions.
Before filing, employers are required to check whether any of the positions are located in a CMA and then confirm the unemployment rate in that area using the federal table. If any work location falls in a CMA where joblessness is six per cent or higher at the time of submission, low‑wage LMIA applications are not processed. This refusal‑to‑process mechanism is written into federal program guidance and has also been reinforced in background material on the TFWP.
The reopened regions have now dipped below that six per cent threshold, triggering the resumption of low‑wage LMIA processing there, while other CMAs with higher unemployment remain ineligible, reported CIC News.
Operationally, Immigration, Refugees and Citizenship Canada (IRCC) and Service Canada share responsibility: IRCC issues work permits, but employers must first secure a positive LMIA from ESDC/Service Canada under the TFWP framework.
What counts as ‘low‑wage’
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.
The distinction between high‑ and low‑wage streams is not just semantic. It affects:
- Caps and quotas: there are federal limits on the proportion of low‑wage temporary foreign workers in a workplace, with additional refusal‑to‑process measures in high‑unemployment areas.
- Duration of employment: the federal government’s guidance notes that employers submitting an LMIA for a low‑wage position may generally request a maximum employment duration of one year.
- Wage setting and compliance: offering below the prevailing wage can lead to a negative LMIA decision, and employers must respect the prevailing wage benchmarks in their region.
For HR teams, this means compensation strategy is directly implicated in whether a role falls into the more constrained low‑wage stream or qualifies for the high‑wage pathway, which was not subject to the same regional freeze.
What changes in the eight regions
Service Canada will again accept and process low‑wage LMIA applications in Vancouver, Winnipeg, Kingston, Halifax, Moncton, Saint John, Fredericton and Montréal for the first quarter of 2026, reported the US-based VisaHQ.
The reopening doesn’t change broader program obligations: employers must still demonstrate recruitment efforts, meet wage and working‑conditions standards, and remain subject to inspections and penalties for non‑compliance established by the federal government.
The resumption of low‑wage LMIA processing in select regions comes as IRCC continues to adjust other immigration levers, prioritizing economic immigration streams in many of its recent program decisions, VisaHQ reported.
Looking ahead to April and beyond
Because the LMIA eligibility list is reviewed quarterly, these authorizations aren’t guaranteed in subsequent quarters. With the next scheduled update expected on April 10, changes in regional unemployment could again trigger refusals to process low‑wage LMIAs in some CMAs or expand eligibility in others, according to ICC Immigration.
