TFWP — low-wage stream cap

Topic LMIA / TFWP 🇨🇦 Verified: 2026-05

Overview

Effective September 26, 2024, Employment and Social Development Canada (ESDC) introduced a cap restricting the proportion of low-wage temporary foreign workers (TFWs) that an employer can have at any single worksite under the Temporary Foreign Worker Program (TFWP). For most employers, the cap limits low-wage TFWs to 10% of the workforce at that worksite [Unverified — check current threshold at esdc.gc.ca]. A "low-wage" position is one where the offered wage is below the provincial or territorial median hourly wage for that occupation and region. Certain sectors are exempt from the cap.

The cap was announced as part of a broader package of TFWP reforms in June–August 2024, responding to concerns about the program's scale and its effects on labour market conditions for Canadian workers. The reforms also included changes to LMIA processing priorities and greater scrutiny of applications in high-unemployment regions.

Legal basis

IRPA s 30(1) — work permit authority; enables TFWP work permits where a positive LMIA has been issued
IRPR s 203 — LMIA assessment criteria, including the requirement that employment of foreign workers will not have a negative impact on the labour market
ESDC operational guidelines — the cap is implemented through ESDC's LMIA assessment policy and employer eligibility criteria, rather than direct regulatory amendment; ESDC can refuse an LMIA on policy grounds where the cap would be exceeded

Current cap thresholds and exempt sectors: canada.ca — low-wage stream. Effective date: September 26, 2024.

How it works

The cap — how the 10% limit applies

The cap is applied at the worksite level, not at the company level. An employer operating multiple worksites calculates the cap separately for each location. For example, a restaurant chain calculates the proportion of low-wage TFWs at each individual restaurant, not across all its locations combined.

The proportion is calculated as:

Number of low-wage TFWs at the worksite ÷ Total workforce (Canadian citizens + permanent residents + TFWs) at the worksite × 100

An LMIA application will not be approved if granting it would cause the employer to exceed the applicable cap at the worksite [Unverified — verify current calculation methodology at esdc.gc.ca].

What counts as a "low-wage" position

A position is low-wage if the offered hourly wage is below the provincial or territorial median hourly wage for the relevant occupation, as published by ESDC. The median wages are updated periodically. An employer offering a wage at or above the provincial/territorial median is in the high-wage stream and is not subject to this cap.

High-unemployment region restrictions

In regions where the unemployment rate is 6% or higher, ESDC applies additional restrictions. LMIA applications for low-wage positions in the food service, accommodation, and retail trade sectors were refused in high-unemployment regions under the 2024 reform. This restriction was designed to prioritise Canadian workers in labour markets where unemployment is elevated. [Unverified — check current regional restrictions at esdc.gc.ca, as these may change with quarterly unemployment data].

Exempt sectors

The following categories are exempt from the low-wage cap and the high-unemployment region restrictions:

Primary agriculture — crop and livestock farming, greenhouse and nursery operations
Seasonal Agricultural Worker Program (SAWP) — bilateral agreements with Mexico and Caribbean countries
Agricultural stream of the TFWP (non-SAWP agricultural positions)
In-home caregiver positions — caregivers for seniors and persons with disabilities in a private home
Construction — positions classified in construction trades occupations
Healthcare occupations — positions in direct patient care

[Unverified — verify current exempt sector list at canada.ca/low-wage as the list may be updated].

Existing LMIA approvals and permits

Employers who held a valid positive LMIA issued before September 26, 2024, were able to use that LMIA to support a work permit application during the LMIA's validity period (typically 18 months from the date of issue) without being required to re-apply under the new cap rules. However, new LMIA applications submitted on or after September 26, 2024, are assessed under the cap framework.

LMIA advertising requirements interaction

The cap applies in addition to, not instead of, the standard LMIA labour market advertising requirements. An employer must still advertise the position and demonstrate that no qualified Canadian worker is available, even where the cap would not be exceeded.

Note on current thresholds

The specific percentages and sector lists in this page reflect the September 2024 reform as announced. ESDC periodically reviews and updates the cap thresholds and sector exemptions. For current operative thresholds, refer to the ESDC low-wage stream page at canada.ca.