More than 1.3 million temporary work permits set to expire by end of 2026
Canadian employers are facing growing uncertainty as more than 1.3 million temporary work permits are set to expire by the end of 2026, raising concerns about labour shortages, supply chain stability and business closures, according to a group.
In a press release, the Canadian Federation of Independent Business (CFIB) said the impending expiries “threaten significant economic and labour challenges,” particularly for small firms that have leaned on the Temporary Foreign Worker Program (TFWP) to address persistent staffing gaps.
CFIB president Dan Kelly warned that “the economic fallout could be massive,” saying “thousands of workers could be forced to leave or left in limbo waiting for an extension or a new permit.”
“Some estimates show more than 300,000 work permits are due to expire by the end of March alone,” Kelly said. “Many employers are now facing the hard reality that they may not be able to keep their foreign workers because of recent federal changes.”
For human resources leaders, the scale and timing of the expiries mean workforce continuity and compliance planning will likely have to accelerate over the coming months.
Small businesses exposed to labour and growth risks
CFIB data show that skilled labour shortages remain a major constraint for smaller firms.
According to its Monthly Business Barometer, 39% of small businesses cite shortages of skilled workers as the second highest factor limiting sales and growth. In a 2024–25 survey of employers that used the TFWP, 57% said they would have to scale back growth plans without access to foreign workers, while 52% said they would be unable to fill orders or render services.
Almost one quarter (24%) of respondents said they would need to reduce hours of operation, and 18% indicated it was very likely they would have to close if unable to retain or replace their temporary foreign workers, CFIB reported.
Labour shortages in Saskatchewan
The pressures are already visible in Saskatchewan, where industries “are bracing for impact as thousands of permits are expected to expire in the province by the end of the year,” Global News reported.
Sectors such as hospitality, trucking, agriculture and the skilled trades depend on temporary foreign workers to “fill labour gaps,” Brianna Solberg, CFIB’s provincial affairs director, said, according to the report.
“They’re going to lose access to those workers, and so it will come as a huge blow to their productivity,” Solberg said, adding that small businesses are especially at risk due to their greater reliance on these workers.
Saskatchewan’s hospitality industry has been preparing for changes since new federal immigration rules were introduced in late 2024. Jim Bence, president and CEO of Hospitality Saskatchewan, said employers prefer to recruit domestically but often cannot find enough qualified candidates, according to Global News
“We want to hire from within our own borders, for sure — it just makes way more sense. But unfortunately, that isn’t always the only labour pool that we can rely on,” Bence told the publicaiton. He said the decline in both temporary foreign workers and international students was already being felt on the front lines, with jobs going unfilled. “Our anticipation is that by July of this year, we will see significant shortfalls,” he added.
At the end of 2025, Saskatchewan had 47,503 non-permanent residents, including 31,458 work permit holders, according to the report, citing Statistics Canada. Nationally, temporary foreign workers account for about 10 per cent of all non-permanent residents and roughly one per cent of the total workforce.
Federal response targets rural and sector-specific pressures
In response to growing concerns, the federal government has announced temporary measures aimed at easing labour pressures in rural areas.
The new rules allow rural employers, for up to 12 months, to keep their current number of temporary foreign workers and raise the cap on low-wage TFWs from 10% to 15% of their total workforce. Sector-specific exemptions remain, with health care, construction and food processing allowed to maintain a 20% cap on low-wage temporary foreign workers.
These measures must be requested by provinces and territories and can only take effect at least two weeks after a request is submitted. The earliest they can be implemented is 1 April, and they are scheduled to expire on March 31, 2027.
CFIB said it welcomed the announcement but urged Ottawa to go further to provide stability. The organisation is calling for a grandfathering clause to help retain TFWs already in Canada, a pathway to permanent residency for lower-skilled workers who have maintained status and paid taxes, an appeals process for denied applications, reduced administrative burden and earlier consultation with employers before future reforms.
“Businesses and their employees need stability,” said Corinne Pohlmann, Executive Vice-President of Advocacy at CFIB. “Many of these work permit holders, including TFWs, are already integrated in, and contributing to, their communities. Immigration policies must respond to economic needs and so now is not the time to make things even harder for small businesses and their employees. Government needs to deliver on a concrete plan to ensure workforce stability.”
The federal government has also introduced a temporary immigration measure aimed at helping Quebec employers retain skilled temporary foreign workers who are already on a pathway to permanent residence.
Recently, Canada extended temporary special immigration measures for certain Iranian nationals already working in the country.
