Upcoming Policies That May Impact Foreign Workers in Canada in 2026
In 2026, Canada is entering a turning point in how it manages immigration.
After years of record growth in temporary residents – including foreign workers and international students – the federal government has announced dramatic changes for 2026.
For Canadian employers who rely on temporary foreign workers, these shifts will likely affect hiring timelines and workforce planning – as well as how you support the workers already on your team.
2026 Changes: At a Glance
Dramatic cuts to new arrivals: Only 60,000 new TFWP workers in 2026 (down 27% from 2025), with total temporary resident admissions slashed by 43% to 385,000.
Tighter program restrictions: Low-wage permits blocked in high-unemployment regions, significantly higher wage thresholds, and stricter caps on temporary workforce percentages.
Provincial barriers: Québec extends LMIA restrictions in Montréal/Laval through December 2026; Ontario's new labour standards and credential rules that can affect how employers structure roles and job offers
New permanent residence pathways: One-time transition program offers PR to up to 33,000 current work permit holders in 2026–2027, with increased Provincial Nominee allocations.
What employers need to do: Plan hiring 6–12 months ahead and prioritize retention over recruitment. Ensure comprehensive health coverage during status transitions.
What Is Changing for Temporary Foreign Workers in 2026?
Canada's 2026–2028 Immigration Levels Plan
The cornerstone of these changes is Canada's new Immigration Levels Plan for 2026–2028, which cuts new temporary resident admissions by 43% compared to 2025.
The total number of new temporary residents will drop from 673,650 in 2025 to just 385,000 in 2026, with the explicit goal of bringing Canada's temporary population below 5% of the total population by 2027.
Within those numbers, approximately 230,000 new temporary workers are planned for 2026 – about 170,000 under the International Mobility Program (IMP) and just 60,000 under the Temporary Foreign Worker Program (TFWP).
That TFWP figure represents a 27% cut from last year's target and will drop even further to 50,000 by 2027.
The message is clear: Canada is dramatically scaling back new arrivals of temporary workers while maintaining steady permanent resident admissions of 380,000 annually.
Why Is Canada Reducing New Temporary Residents?
Why the changes? The Canadian federal government cites multiple pressures driving this shift:
Housing shortages and strained healthcare systems in rapidly growing communities have all contributed to public concern about immigration levels.
Political pressure has intensified, with some parties calling for the complete abolition of the TFWP, blaming it for youth unemployment and wage suppression.
The government isn’t taking the drastic steps to eliminate the program. But it is tightening it significantly.
The goal is to rebalance toward permanent immigration, bringing in fewer temporary workers while helping more existing workers transition to permanent residence.
For employers, this means facing more competition for limited TFWP "spots" and closer scrutiny of Labour Market Impact Assessment (LMIA) applications and compliance with program rules.
2026 Policy Shifts Employers Should Watch
Several restrictive measures introduced in 2024 continue into 2026 and beyond. Employers now face:
Regional unemployment triggers
In areas where unemployment exceeds 6%, both new applications and renewals for low-wage TFWP positions are blocked. This particularly affects urban centres and regions experiencing economic slowdowns.
Higher wage thresholds
The minimum wage required for high-wage TFWP positions increased in late 2024, meaning positions must offer significantly higher compensation to qualify.
Workforce caps
Limits on the percentage of a company's workforce that can be temporary foreign workers have been reduced, forcing employers to make greater efforts to hire Canadian workers and permanent residents first.
Enhanced housing and transportation requirements
Employers hiring low-wage workers must now provide more comprehensive support for housing and transportation, with stricter verification during compliance inspections.
These changes most significantly impact sectors like agriculture, food processing, hospitality, construction, and seasonal industries where foreign workers have traditionally filled critical gaps.
Provincial Updates: Québec and Ontario
Québec
In Québec, the 2026–2029 immigration plan extends restrictions on certain LMIA applications in Montréal and Laval through December 31, 2026.
This means employers in these regions face additional barriers to hiring temporary foreign workers, requiring more advance planning and potentially exploring alternative immigration pathways.
Ontario
Ontario's 2026 regulatory updates include new labour standards and credential recognition rules that affect how foreign workers move between roles and occupations.
While designed to reduce barriers for skilled immigrants, these changes also require employers to structure job offers and make sure all positions align with the updated occupational classifications.
How Will These Changes Affect Foreign Workers Themselves?
Fewer New Arrivals, More Focus on Those Already Here
Fewer new arrivals mean existing workers become more valuable to employers who depend on this workforce. This should translate into better working conditions, more stable hours, and increased employer investment in workers' well-being – including comprehensive health coverage.
However, it also increases pressure on workers already here to maintain their status and demonstrate their value.
Workers facing health issues, workplace injuries, or gaps in insurance coverage may find themselves particularly vulnerable if they fear losing their positions means losing their pathway to staying in Canada.
This makes employer-provided health insurance more critical than ever. With fewer new workers entering the system, ensuring existing workers can access care without fear becomes both a humanitarian imperative and a business necessity.
New Pathways From Temporary to Permanent Residence
The most significant opportunity in the 2026–2028 plan is the one-time transition measure that will grant permanent residence to up to 33,000 work permit holders in 2026 and 2027.
For employers, this represents a strategic opportunity. Workers pursuing permanent residence are more likely to stay long-term, reducing recruitment and training costs.
Supporting workers through the PR process builds loyalty and positions your business as a preferred employer in an increasingly competitive market for skilled foreign workers.
This also affects how you structure benefits. Workers transitioning to permanent residence may need extended health coverage during application processing periods and support in navigating changing insurance eligibility as their status changes.
It’s Time to Review Health Benefits and Foreign Worker Coverage
The 2026 policy environment makes comprehensive health coverage for foreign workers non-negotiable.
With fewer workers entering Canada and more emphasis on transitioning existing workers to permanent residence, gaps in health coverage create risks for both workers and employers.
Review whether your current coverage:
Provides emergency medical protection from the moment workers arrive in Canada
Covers the provincial waiting period (typically three months) without gaps
Includes income replacement if workers are injured and cannot work
Offers prescription drug, dental, and paramedical services
Extends through the transition period if workers apply for permanent residence
Provides support in workers' languages so they actually understand and use their benefits
Workers who delay seeking care due to cost concerns or confusion about coverage often develop more serious conditions that result in emergency room visits, extended absences, and difficult-to-fill workforce gaps.
Comprehensive coverage that workers can easily access prevents these outcomes.
People Corporation is Here to Help
The Foreign Workers Canada Health Plan specializes in comprehensive coverage designed specifically for temporary foreign workers navigating Canada's evolving immigration landscape.
We ensure your workers are protected from day one, through provincial waiting periods, and even during transitions to permanent residence. When you feel equipped, you’ll hire and retain confidently.
Have questions about how 2026 policy changes affect your benefits obligations? Reach out for a consultation.
Our team understands both immigration requirements and insurance compliance, and we're ready to help you prepare for what's ahead. Get in touch today – let's make sure your workforce is covered, no matter what changes come.
Looking to provide your foreign workers with the necessary healthcare coverage?
Click through the video below to learn about the FWCHP.
