Declining Temporary Foreign Workers in Canada: Trends and Implications as of May 1, 2025
Canada’s Temporary Foreign Worker (TFW) program is experiencing a significant downward trend in 2025, driven by tightened policies and shifting economic priorities.
Why Are TFW Numbers Dropping?
Stricter Policies: In September 2024, IRCC reduced the low-wage TFW cap from 20% to 10% of an employer’s workforce and shortened low-wage work permits to one year. These changes aim to prioritize Canadian workers amid a 6.6% unemployment rate.
Economic Shifts: Easing labor shortages in sectors like food services and retail have reduced employer reliance on TFWs, with domestic hiring rebounding post-pandemic.
Worker Rights Advocacy: Criticism of exploitative closed work permits has prompted reforms, discouraging overuse of the program. Advocacy for open permits is gaining momentum.
Specific Regional and Demographic Trends : A Statistics Canada report highlights a sharp decline in U.S. citizen TFWs, dropping from 61,698 in 2010 to 38,867 in 2023, a 37% decrease. This contrasts with a rise in U.S. non-citizen residents obtaining work permits, reflecting shifting North American labor dynamics. Meanwhile, overall TFWs from the U.S. fell from 16.6% of Canada’s temporary workforce in 2010 to just 4% in 2023, indicating a broader diversification of TFW source countries
Key Impacts
Economic Strain: Industries like agriculture (15% TFWs) and construction face potential labor gaps, pushing employers toward higher wages or automation.
Improved Worker Protections: Fewer TFWs and advocacy for open permits may reduce exploitation, particularly for low-wage workers from countries like India and Mexico.
Immigration Shifts: With 45% of economic immigrants in 2024 being former TFWs, a decline could shrink permanent residency pathways, favoring high-skilled workers.
Public Services Relief: Reducing TFWs aligns with Canada’s plan to lower temporary residents to 5% of the population by 2027, easing housing and healthcare pressures.
What’s Next?
Policy Evolution: Expect stricter Labour Market Impact Assessments (LMIAs) and a focus on high-skilled labor through programs like the International Mobility Program.
Sector-Specific Solutions: Agriculture may see exemptions to ensure seasonal labor, with pilot programs streamlining hiring for trusted employers.
Advocacy Push: Calls for open work permits and permanent residency pathways for low-wage TFWs could reshape the program by 2026.
