Canada's new foreign worker restrictions affect 24 major regions
On This Page You Will Find:
- Current status of food service worker restrictions in Canada for 2026
- 24 regions where low-wage foreign workers are now banned from working
- New 10% cap limiting temporary foreign workers in most sectors
- Quarterly updates on which cities face employment restrictions
- Timeline showing how worker admission targets drop to 50,000 by 2027
Summary:
Maria Santos had been planning to bring her cousin from the Philippines to work at her Toronto restaurant through Canada's Temporary Foreign Worker Program. But when she submitted her application in January 2026, she received an unexpected rejection. The reason? Toronto is now one of 24 Canadian regions where hiring low-wage foreign workers has been suspended due to high unemployment rates. While the original 2014 food service ban ended years ago, new restrictions have emerged that affect restaurants, retail stores, and other businesses across major cities. These changes represent the most significant shift in Canada's foreign worker policy in over a decade, with admission targets dropping from previous highs to just 50,000 workers by 2027.
🔑 Key Takeaways:
- The original 2014 food service moratorium ended years ago, but new restrictions now affect all low-wage sectors
- 24 regions including Toronto, Calgary, and Ottawa cannot hire low-wage temporary foreign workers due to 6%+ unemployment
- Most sectors now have a 10% cap on temporary foreign worker positions as of September 2024
- Regional restrictions are updated quarterly based on unemployment data
- Foreign worker admission targets will drop to 50,000 by 2027, down significantly from previous years
If you're a restaurant owner, retail manager, or business operator who has relied on temporary foreign workers, you're likely feeling confused about what these changes mean for your staffing plans. The landscape has shifted dramatically from the days when a blanket ban targeted only food services to a more complex system that affects multiple industries based on regional economic conditions.
The End of the Original Food Service Ban
The food service industry breathed a collective sigh of relief when Canada lifted its sector-specific moratorium that had been in place since April 24, 2014. That original restriction specifically targeted restaurants, fast-food chains, and other food service establishments, preventing them from accessing the Temporary Foreign Worker Program regardless of their location or local economic conditions.
The 2014 moratorium was implemented following public outcry over concerns that foreign workers were displacing Canadian employees in the food service sector. At the time, the government promised the ban would remain "until the ongoing review of the Temporary Foreign Worker Program is finished."
That review concluded years ago, and food service businesses regained access to hire temporary foreign workers. However, what many employers didn't anticipate was that new, broader restrictions would soon take their place.
New Regional Restrictions Take Effect
Starting in September 2024, the federal government implemented a fundamentally different approach to controlling temporary foreign worker access. Instead of targeting specific industries, the new system focuses on regional unemployment rates.
Here's how it works: any economic region with an unemployment rate of 6% or higher faces a complete moratorium on processing Labour Market Impact Assessment (LMIA) applications for low-wage positions. This means businesses in these areas cannot hire temporary foreign workers earning below the provincial or territorial median wage.
The most recent update, published on January 8, 2026, identifies 24 regions currently under this restriction. The list includes major metropolitan areas where thousands of businesses operate:
Major Cities Affected:
- Toronto and surrounding Greater Toronto Area
- Calgary and area
- Ottawa-Gatineau region
- Various other economic regions across provinces
This geographic approach means a restaurant in downtown Toronto faces the same restrictions as a retail store in Calgary or a cleaning company in Ottawa. The common factor isn't the industry—it's the local unemployment rate.
The 10% Cap: A New Industry-Wide Limit
Beyond the regional restrictions, businesses across Canada now face an additional constraint that affects their long-term staffing strategies. As of September 26, 2024, most sectors can only fill 10% of their low-wage positions with temporary foreign workers.
This represents a significant shift from previous policies where businesses could potentially fill larger percentages of their workforce with temporary foreign workers, provided they could demonstrate genuine labor shortages and meet other LMIA requirements.
For a restaurant with 50 employees, this means only 5 positions can be filled by temporary foreign workers. A retail chain with 100 low-wage positions across multiple locations can now hire only 10 temporary foreign workers total.
The 10% cap applies regardless of whether your business operates in a restricted region or an area with low unemployment. It's become a universal constraint that affects workforce planning across industries.
Quarterly Updates Create Planning Challenges
Unlike the predictable nature of the original food service ban, the new regional restrictions change every three months based on updated unemployment statistics. This creates ongoing uncertainty for business owners who need to plan their staffing needs months in advance.
A region that allows temporary foreign worker applications in January might find itself on the restricted list by April if unemployment rises above 6%. Conversely, areas currently under moratorium could regain access if their economic conditions improve.
This quarterly review system means you need to stay informed about your region's status and have backup staffing plans ready. The government publishes updated lists four times per year, typically at the beginning of each quarter.
Dramatic Reduction in Worker Admissions
The policy changes extend beyond regional restrictions and sector caps to overall program size. Canada has announced significant reductions in temporary foreign worker admission targets that will reshape the entire program.
The numbers tell a stark story:
- 2026: 60,000 admissions
- 2027: 50,000 admissions
- 2028: 50,000 admissions (maintained)
These targets represent a substantial decrease from previous years when Canada admitted significantly more temporary foreign workers across all streams. The reduction reflects the government's broader strategy to prioritize domestic employment and reduce reliance on foreign workers.
For individual businesses, this means increased competition for available spots in the program. Even if your region isn't restricted and you stay within the 10% cap, securing approval for temporary foreign workers will likely become more challenging as demand exceeds available positions.
What This Means for Different Business Types
Restaurant Owners: You're no longer subject to a food service-specific ban, but you face the same regional and cap restrictions as other industries. If you operate in Toronto, Calgary, or other high-unemployment regions, you cannot currently access the program regardless of your specific labor needs.
Retail Businesses: The 10% cap particularly affects large retail operations that previously relied on temporary foreign workers for seasonal or ongoing staffing needs. You'll need to restructure your workforce planning to stay within the new limits.
Small Business Operators: The combination of regional restrictions and reduced overall admissions creates a more competitive environment. Small businesses may find it harder to secure temporary foreign workers compared to larger companies with more resources to navigate the application process.
Multi-Location Businesses: If you operate across different regions, you might be able to hire temporary foreign workers for locations in unrestricted areas while being blocked in high-unemployment regions. This creates complex staffing allocation decisions.
Preparing for Ongoing Changes
The shift from industry-specific to region-specific restrictions requires a new approach to workforce planning. Here's what successful businesses are doing to adapt:
Monitor Regional Status: Set quarterly reminders to check whether your region remains eligible for temporary foreign worker applications. This information is publicly available and updated regularly.
Develop Alternative Staffing Strategies: Build relationships with domestic recruitment agencies, community colleges, and employment centers to identify Canadian workers and permanent residents who might fill your positions.
Calculate Your 10% Allocation: Determine exactly how many temporary foreign worker positions you're allowed under the new cap and prioritize which roles are most critical to fill through the program.
Plan for Longer Processing Times: With reduced admission targets and increased competition, expect longer wait times for LMIA approvals and temporary foreign worker arrivals.
The current system represents a fundamental shift in how Canada manages temporary foreign worker access. While the original food service ban has ended, the new restrictions affect a broader range of businesses and create ongoing uncertainty that requires active management and planning.
Understanding these changes and adapting your staffing strategies accordingly will be crucial for maintaining operations while complying with the evolving regulatory landscape. The days of predictable, long-term access to temporary foreign workers have been replaced by a more dynamic system that requires constant attention and flexible planning.
FAQ
Q: What exactly changed with Canada's food service worker ban in 2026?
The original food service worker ban that started in April 2014 has been completely lifted, meaning restaurants and food service businesses are no longer subject to industry-specific restrictions. However, this doesn't mean hiring foreign workers has become easier. Instead of targeting just food services, Canada now implements region-based restrictions that affect all low-wage sectors, including restaurants, retail, and hospitality. Currently, 24 regions including Toronto, Calgary, and Ottawa cannot hire any low-wage temporary foreign workers due to unemployment rates exceeding 6%. Additionally, all businesses nationwide face a new 10% cap on temporary foreign worker positions and significantly reduced admission targets dropping to just 50,000 workers by 2027. So while the food service ban is gone, the overall system has become more restrictive and complex.
Q: Which regions are currently banned from hiring temporary foreign workers and how often does this change?
As of January 2026, 24 economic regions across Canada are under a complete moratorium for low-wage temporary foreign worker hiring due to unemployment rates of 6% or higher. Major affected areas include the Greater Toronto Area, Calgary region, Ottawa-Gatineau, and various other metropolitan centers. The critical difference from the old system is that these restrictions are updated quarterly based on current unemployment statistics from Statistics Canada. A region that's unrestricted in January could be banned by April if unemployment rises, and vice versa. This creates ongoing uncertainty for business planning since you might submit an application in an eligible region only to find it restricted by the time processing occurs. Employers need to check the government's quarterly updates and maintain flexible staffing strategies since regional eligibility can change every three months based on economic conditions.
Q: How does the new 10% cap on temporary foreign workers actually work for businesses?
The 10% cap means that businesses can only fill 10% of their low-wage positions with temporary foreign workers, regardless of their location or industry. This applies to positions paying below the provincial or territorial median wage. For example, if your restaurant has 30 low-wage positions, you can hire only 3 temporary foreign workers. If you're a retail chain with 100 low-wage positions across multiple locations, your total temporary foreign worker allocation is 10 positions. This cap is calculated across your entire business operation, not per location. The restriction applies even in regions where temporary foreign worker hiring is otherwise permitted. Combined with the regional unemployment restrictions, businesses face a two-tier limitation system. You must first operate in an eligible region (under 6% unemployment), then stay within the 10% workforce composition limit, making strategic workforce planning essential for compliance and operational success.
Q: What are the new admission targets and how will they affect application processing times?
Canada has dramatically reduced temporary foreign worker admission targets to 60,000 in 2026, dropping further to 50,000 by 2027 and maintaining that level through 2028. This represents a substantial decrease from previous years when admissions were significantly higher. The reduced targets create increased competition among employers for available spots in the program. Even businesses that meet regional eligibility requirements and stay within the 10% cap will face longer processing times and potentially higher rejection rates due to program capacity limits. With fewer available positions and continued demand from employers across all sectors, the Labour Market Impact Assessment (LMIA) process is becoming more competitive. Businesses should expect extended timelines for application processing and worker arrivals, making advance planning crucial. Early application submission and having backup domestic staffing strategies are now essential components of workforce planning in this more constrained environment.
Q: How can restaurants and food service businesses adapt their hiring strategies under these new rules?
Food service businesses need a multi-pronged approach to navigate the new restrictions effectively. First, determine if your region currently allows temporary foreign worker applications by checking the quarterly updates on government websites. If you're in a restricted region, focus entirely on domestic recruitment through partnerships with culinary schools, employment centers, and community organizations. Calculate your 10% temporary foreign worker allocation and reserve these positions for the most critical roles that are hardest to fill locally, such as specialized kitchen positions or management roles. Develop relationships with immigration consultants who can help optimize your LMIA applications in the more competitive environment. Create retention strategies to keep existing temporary foreign workers who may be eligible for permanent residence pathways. Consider offering higher wages to attract domestic workers, as positions above the median wage face fewer restrictions. Finally, build flexible staffing models that can quickly pivot between domestic and foreign worker recruitment based on quarterly regional status changes.
Q: What happens to existing temporary foreign workers and pending applications under the new rules?
Existing temporary foreign workers are not affected by the new regional restrictions or caps - they can continue working under their current work permits until expiration. However, extending their employment or hiring additional temporary foreign workers in the same positions will be subject to the new rules. Pending LMIA applications submitted before regional restrictions took effect may still be processed, but new applications in restricted regions are suspended regardless of submission date. For businesses planning to renew temporary foreign worker positions, you'll need to ensure your region remains eligible and that the renewed positions fit within your 10% cap allocation. Existing workers approaching permit expiration should be advised about permanent residence pathways if available, as replacing them with new temporary foreign workers may not be possible under current restrictions. Businesses should conduct immediate audits of their temporary foreign worker positions, permit expiration dates, and renewal timelines to avoid staffing gaps when current permits expire and replacement workers cannot be hired.
Q: Are there any exceptions to the regional restrictions and 10% cap for certain types of positions or businesses?
The regional unemployment restrictions and 10% cap primarily apply to low-wage positions, defined as those paying below the provincial or territorial median wage. Positions paying above the median wage may still be eligible even in restricted regions, though they face their own processing requirements and criteria. Certain sectors like agriculture, caregivers, and specific skilled trades may have separate streams with different rules. However, most restaurant, retail, and hospitality positions fall into the low-wage category and are subject to full restrictions. Some exceptions exist for truly unique circumstances where no Canadian workers are available for specialized roles, but these require extensive documentation and justification. Seasonal Agricultural Worker Program positions operate under separate agreements and aren't affected by these restrictions. Businesses should carefully review wage levels for their positions, as increasing compensation above the median wage threshold could potentially exempt certain roles from the restrictions, though this strategy requires balancing increased labor costs against temporary foreign worker access needs.
