By Mata Press Service

The federal government is temporarily loosening restrictions on the hiring of low-wage temporary foreign workers in rural Canada, saying some communities still face severe labour shortages even as unemployment rises nationally.

Employment and Social Development Canada said rural employers in eligible regions will be allowed to increase the share of low-wage temporary foreign workers in their workforce to 15 per cent from 10 per cent. The measure, which must be requested by provinces or territories, could take effect as early as April 1 and will remain in place until March 31, 2027.

The move creates a targeted exception to Ottawa’s recent efforts to tighten the Temporary Foreign Worker Program, or TFWP, as concerns grow over Canada’s reliance on temporary labour and pressure on the job market.

Federal Jobs Minister Patty Hajdu said the change is intended to address persistent worker shortages in rural regions while keeping Canadians first in line for available jobs.

“Canadians must always be first in line for available jobs, but in some rural regions employers are facing persistent labour shortages,” Hajdu said in the government’s release. She said the time-limited measures are meant to address “urgent workforce gaps” while supporting the industries that keep rural communities running.

Buckley Belanger, Secretary of State for Rural Development, said rural Canada cannot be treated the same way as major urban labour markets.

“In many parts of rural Canada, employers are dealing with tight labour markets, smaller local workforces, and fewer people able to move where the jobs are,” Belanger said.

The change means qualifying rural employers will be allowed to retain their current number of low-wage temporary foreign workers and, in some cases, hire more up to the new 15 per cent cap.

Existing sector-specific exemptions will remain. Employers in health care, construction and food processing will continue to be allowed to hire up to 20 per cent of their workforce through the low-wage stream, while seasonal sectors such as fish and seafood processing and tourism will continue to be exempt from the cap for seasonal positions.

The announcement comes at a politically sensitive time.

Statistics Canada reported last week that the country lost 83,900 jobs in February and that the unemployment rate rose to 6.7 per cent from 6.5 per cent in January. Youth unemployment is now above 14 per cent, among the highest levels seen in years.

That backdrop is likely to intensify criticism from those who argue Ottawa should be reducing, not expanding, access to foreign labour while more Canadians are struggling to find work.

The federal government has spent the past two years moving in that direction.

Between October 2023 and November 2024, Ottawa introduced a series of restrictions aimed at reducing employer reliance on the TFW program. Those measures included refusing to process low-wage applications in census metropolitan areas with unemployment rates of six per cent or higher, cutting the general cap on low-wage foreign workers from 20 per cent to 10 per cent, and reducing the maximum employment duration for low-wage work permits to one year.

The government says those changes reduced overall reliance on the program, but not enough to resolve workforce shortages in some rural areas where employers still struggle to attract and retain staff.

Officials say temporary foreign workers account for roughly one per cent of Canada’s total workforce and about 10 per cent of all non-permanent residents in the country. At the end of 2025, there were about 220,000 workers with TFW permits in Canada.

Ottawa has also been trying to shrink the broader temporary resident population after a sharp surge between 2022 and 2024. As of Oct. 1, 2025, Canada had 2.85 million temporary residents, equal to 6.8 per cent of the population. The federal government has set a target of reducing that share to five per cent by 2027.

Business groups welcomed the latest TFW announcement, calling it a practical response to labour shortages outside major cities.

Restaurants Canada said the change is a step toward a more predictable workforce strategy for rural, remote and tourism-dependent regions, where employers often struggle to find enough local workers.

“Access to a reliable and predictable source of labour is essential to the economic and social fabric of these communities,” said Kelly Higginson, the group’s president and chief executive officer.

Higginson said temporary foreign workers make up only about three per cent of the restaurant industry’s workforce but help fill key gaps that allow businesses to stay open and continue employing Canadians. Restaurants in rural areas, she said, often need workers for specialized positions such as chefs and cooks or for hard-to-fill overnight shifts.

The Canadian Chamber of Commerce also backed the move, saying Ottawa had recognized that labour shortages vary across the country.

“The announcement moves away from a one-size-fits-all approach and recognizes regional realities,” said David Pierce, the chamber’s vice-president of government relations.

The Canadian Federation of Independent Business, which has warned of disruption as more than 1.3 million work permits are set to expire by the end of 2026, has also argued that many small firms rely on foreign workers out of necessity, not convenience.

CFIB says skilled labour shortages remain the second-largest constraint on sales and growth for 39 per cent of small businesses. In a recent survey of firms that used the TFWP, 57 per cent said they would have to scale back growth plans without access to foreign workers, while 52 per cent said they would be unable to fill orders or provide services.

Still, the program remains controversial.

Labour advocates and critics have long argued that the TFW system gives employers too much power because workers are typically tied to a single employer through closed permits. That structure can leave workers vulnerable to abuse or exploitation because leaving a job can also mean losing the right to work in Canada.

The expansion also opens the government to renewed political attacks from those who say the country needs a clearer separation between temporary labour needs and broader immigration policy.

Conservative Leader Pierre Poilievre has called for the current program to be scrapped and replaced, except for a separate stream focused on agriculture. Agricultural employers are already exempt from the general cap on foreign workers.

Large numbers of temporary foreign workers in Canada come from Asian countries including the Philippines, India and several South and Southeast Asian nations. Many fill jobs in food processing, hospitality, caregiving, agriculture and other sectors that employers say are difficult to staff domestically.

At the same time, migrant worker advocates have repeatedly raised concerns about insecurity, limited mobility and the lack of pathways to permanent residence for lower-wage workers who help keep essential sectors functioning.

The latest announcement does not create any new pathway to permanent residency, nor does it change the closed-permit structure that has drawn criticism from labour groups.

Instead, Ottawa is presenting the move as a narrow economic tool for specific rural labour markets.