For much of the last decade, employers in Canada have operated under an unofficial formula: bring in a skilled worker, offer stable employment, and trust that permanent residency (PR) would follow. It worked—until now.
Since September 2024, the Canadian government has implemented sweeping changes that have significantly narrowed the pathways to PR for international students and skilled workers. Many foreign workers are now left in limbo—and employers who continue to rely on outdated assumptions are in for a wake-up call in 2025.
What's changed?
In just nine months, several major immigration policy changes have disrupted the usual PR pipeline:
- Refusal to process low-wage Labour Market Impact Assessments (LMIAs);
- Reversion of spousal open work permit eligibility to pre-COVID rules;
- Tighter Post-Graduate Work Permit (PGWP) eligibility;
- Reduced off-campus work hours for international students;
- Overall reduction in approved PR spots;
- Elimination of Express Entry "Arranged Employment" points; and
- Prohibition of "flag-poling" at ports of entry.
How do these changes affect your workforce?
International students
That international student you hired? They can no longer work full-time hours during regular academic sessions. Since November 2022, Study Permit holders have been permitted to work more than 20 hours per week, meaning for the past few years, employers have been able to hire Study Permit holders on a full-time basis. However, starting in the Fall of 2024, Study Permit holders are now only permitted to work up to 24 hours per week while school is in session, and full-time hours during regularly scheduled school breaks (i.e., December holidays and summer). Employers must keep in mind that in order for Study Permit holders to maintain the ability to work at all, they must also maintain full-time enrollment status at their school. In addition to the change in the number of permitted work hours, a PGWP is no longer guaranteed after graduation—eligibility is now limited to specific programs and institutions.
Spouses of foreign workers
Previously, for the past number of years, spouses of foreign workers could receive open work permits with few restrictions. That's changed. Now, spousal open work permit eligibility hinges on the principal worker being employed in a high-skilled position (TEER 0–2, or select TEER 3 roles under the National Occupation Classification system). This is a return to the pre-COVID policy framework.
Workers with employer specific LMIA-exempt or LMIA based work permits
Even if you've secured an LMIA or an employer specific LMIA-exempt work permit to help a worker qualify for PR, their chances may be significantly reduced. As of March 25, 2025, Express Entry no longer awards points for Arranged Employment. That's a 50- or 200-point drop (depending on the TEER skill level of the position) —often the difference between receiving or missing out on an Invitation to Apply (ITA).
Adding to the challenge, the Federal Government has announced a 20+% reduction in annual PR approvals over the next three years. This will affect both the Federal Express Entry application management system and Provincial Nominee Programs (PNPs).
The PNPs now have less nominations they will be able to issue, and Express Entry will issue less ITAs over the coming years – making an already competitive process even tougher.
More LMIA roadblocks
Low-Wage LMIAs are LMIA applications where the wage rate is below the Provincial/Territorial wage rate threshold. Low-Wage LMIAs are now subject to a "refusal to process" if the job is located in a Census Metropolitan Area with an unemployment rate of 6% or higher until further notice. Further, Quebec has indicated that it is no longer processing ANY low wage LMIAs that will be based in the Montreal and Laval areas until November 30, 2025.
Therefore, even if you secured an LMIA for a position last year, you may not be able to do it again anytime soon.
No more flag-poling
"Flag-poling"—the once-common practice of obtaining a new work permit by crossing the border and re-entering Canada—is officially prohibited. Canada Border Services Agency no longer allows this practice, and those who attempt to do so will be turned around. Workers must now apply online, and should be aware that in-Canada processing times are currently hovering around 5–6 months.
While the processing time for in-Canada applications is lengthy, as long as the individual applies for the new work permit before their current work permit expires, they will be permitted to continue working under the terms of the expired work permit while they wait for the new work permit under "Maintained Status." They will be provided with a letter from IRCC after they apply for the work permit confirming their ability to keep working until a decision is made on their work permit application. Maintained Status remains valid as long as the individual remains in Canada until the decision is issued on the application.
This new reality of employing foreign workers in Canada means that they likely will not obtain PR without structured, proactive support from employers. Employers can no longer assume that their foreign worker employee "just needs a few more months" without risking losing that employee.
What can employers do?
- Plan ahead for how to keep foreign workers employed long-term—PR may take multiple work permit renewals, which may require multiple LMIAs.
- Support your workers with professional immigration guidance, either by hiring someone in-house to support this function, or recommending trusted legal counsel.
- Provide strong documentation: offer letters, detailed job descriptions, and wage justifications aligned with market standards.
- Develop PR strategies early for high-value staff in consultation with an immigration lawyer.
- Stay up-to-date on the ever-changing immigration landscape in Canada.
Canada isn't closing its doors—but it's becoming far more selective about who gets to stay. Employers who understand and adapt to these changes will retain their talent. Those who don't risk losing workers they may not be able to easily replace.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
