Demand for temporary foreign workers across Canada is declining, according to recent government data, as restrictions to the federal program that were introduced in September and U.S. tariff concerns weigh on businesses, labour experts say.
Fourth-quarter numbers from 2024, the most recent data available, show Canada approved 61,392 temporary foreign worker (TFW) positions from October to December, down from 81,233 during the same period in 2023, according to figures from Employment and Social Development Canada.
Ontario saw the sharpest year-over-year decline in approved TFW positions nationwide, dropping to 19,444 from 28,642 in the fourth quarter.
Use of the TFW program by Canadian employers has surged in recent years, particularly in low-wage sectors — including agriculture, construction and hospitality — sparking widespread criticisms of worker exploitation and abuse as the unemployment rate climbs across the country.
New restrictions to the program that took effect in the fall aim to encourage businesses to hire more Canadian workers and combat fraud and mistreatment of migrant workers.
Under the new rules, applications for low-wage workers in regions with high unemployment will be refused in many sectors, with employers limited to hiring a maximum of 10 per cent of their workforce through the program.
Workers in agriculture, health care, construction and food security — the sectors hiring the most TFWs — will be exempt from program changes.
“We are seeing now the tightening up of the application process and criteria having some impact on the number of new (TFW) approvals,” said Jim Stanford, economist and director of the think tank Centre for Future Work.
The drop in TFW approvals is consistent with Statistics Canada’s latest estimates showing Canada’s population growth slowed to a three-year low last year, Stanford noted.
The slowdown is linked to temporary resident admissions over the 12-month period. Although the number of temporary residents — consisting primarily of study and work permit holders — rose by 291,165 in 2024, that’s still about a third of the increase of 820,766 in 2023.
Between October and December, there were 28,341 fewer non-permanent residents in the country, the first quarterly decline since the fourth quarter of 2021.
Government restrictions, along with uncertainty over U.S. tariffs’ impact on businesses, will likely continue to slow TFW applications, said Catherine Connelly, a professor at McMaster University’s DeGroote School of Business and an expert on the TFW program.
“We’re entering a period of some uncertainty for companies and how tariffs are going to affect their businesses in the next 12 months,” Connelly said.
Temporary foreign workers have highly regulated contracts that businesses must commit to, she explained.
“A lot of employers are going to be cautious about hiring anybody — that includes temporary foreign workers where you have to know well in advance how many hours you need them for.”
