The Canadian federal government announced its goal of reducing the number of temporary residents and—more specifically, foreign workers—to 367,750 for 2025, limiting the number of work permits available for first-time applicants.1 This goal was confirmed by Prime Minister Carney's commitment to return "overall immigration to sustainable levels" and reduce the number of work and study permit holders to less than five percent of Canada's population by 2027. This plan is a marked departure from the immigration levels set on November 7, 2023, which sought to increase the target of newcomers to 500,000 in 2025 and another 500,000 in 2026.2
Regardless of an employer's size and industry, these immigration policy changes will impact Canadian employers, particularly those who have had access to international students who have work authorizations and have not gone through employer-specific work permit programs. For organizations that are familiar with supporting foreign workers through the closed work permit programs, they will see greater complexities and challenges in the work permit applications. It is important for employers to start planning now for their needs.
Work Permit Expiring? Start Renewal Applications Early
Immigration, Refugees and Citizenship Canada ("IRCC") generally requires work permit holders already in Canada to apply online for a work extension, rather than at the border.3 This restriction aims to lessen the burden on border officers so that they may focus less of their efforts on processing immigration applications and more on their other duties such as customs and border patrol.4
As of June 27, 2025, the estimated processing time for work permit and extension applications has increased to 196 days, creating significant challenges for temporary foreign workers.5 Under "maintained status", foreign workers may continue to work under the same conditions of their work permits until they receive a decision on their work permit extension application, as long as they submit their work permit extension applications before the work permit expiry and continue to remain in Canada. During this time, foreign workers with maintained status and their accompanying family members may lose access to provincial or territorial health care and may have to obtain private medical coverage, which may be expensive.6 Once their work permits expire, and if they leave Canada while their extension applications are in process, they will lose maintained status and cannot resume work until they receive their new work permits.
The Departure of the PGWP Cohort
Employers in several industries have been able to supplement their workforce with temporary residents who are authorized to work under post-graduate work permits ("PGWPs"). PGWPs cannot be renewed unless there is additional time left on their eligibility period. For employers who have relied on the large cadre of students and PGWP holders during COVID and post-COVID, they will need to strategize how to obtain new work authorizations for this group of employees or be aggressive in recruiting replacements (which assumes that there is a large group of qualified applicants waiting for jobs, which is not a safe assumption).
Obtaining new work authorizations may require pursuing Labour Market Impact Assessments, which is an expensive and complicated process, particularly for employers who have not used the Temporary Foreign Worker Program before. Employers must be proactive in conducting an audit of their current employees to see how many employees are on expiring work permits and what the chances are of obtaining a new work permit for them.
Greater Complexities for Work Permit Applications
Canadian immigration lawyers have also observed an alarming rise in arbitrary and incorrect refusals or returns of work permit applications at IRCCC Case Processing Centre in Edmonton.7 Applicants, even those with straightforward applications, are reportedly receiving negative decisions despite clearly meeting eligibility criteria—and sometimes in contradiction with IRCC's own policies.8 The consequences of these negative decisions are real and immediate: foreign workers must cease working immediately, causing disruptions for employers who must quickly recruit and hire replacements.9 This financial and logistical burden is challenging for any employer, especially those in rural and remote communities.10 In addition, even approved applications may contain administrative errors that require follow-up with the IRCC, prolonging the period of uncertainty until resolved.11
The Importance of Employer Compliance
Employers must adhere to the conditions of foreign worker programs to avoid serious repercussions, especially if they are supporting foreign workers through closed work permit programs. These conditions include providing the same occupation and substantially the same, and not less favourable, wages and working conditions as set out in the job offer (submitted on the work permit application), providing a workplace free of abuse and ensuring compliance with all federal, provincial and territorial laws.12 Employers may be inspected at any time for a period of six years from the issuance of the work permit, and violations can result in warnings, penalties of up to $100,000 per violation (with a maximum of $1 million per year), temporary or permanent bans from participating in foreign worker programs, publication of the business name and details of the violation on IRCC's public non-compliance page, and suspension or revocation of previously issued labour market impact assessments or work permits.13 IRCC has recently invested additional resources to promote employer compliance, resulting in steeper fines and a doubling of the amount of penalties levied non-compliant employers under the Temporary Foreign Workers Program in the past year.14
However, employers have opportunities to address and potentially mitigate consequences of non-compliance in advance of inspections through proactive measures such as conducting internal immigration audit to assess potential non-compliance, establishing immigration compliance policy and considering voluntary disclosures.15 Given the importance of compliance and the severity of the consequences for non-compliance, employers should seek support for immigration compliance training to navigate the complexities of their obligations as this can empower the organization to prevent potential non-compliance and penalties in the future. 16
Bill C-2 – Strong Borders Act
The Canadian federal government recently introduced Bill C-2, the Strong Borders Act (the "Bill"), which amends existing legislation to vastly expand the federal government's authority over immigration processes and decision-making. Specifically, the Bill would empower the federal government to:
- facilitate information sharing within the immigration department, across federal departments, and to other levels of government;17
- pause the acceptance or processing, or terminate, applications for permanent resident visas, temporary resident visas, electronic travel authorizations, work permits, study permits, or any other documents or applications made by foreign nationals;18
- deny referral to the Immigration and Refugee Board of asylum claims received more than one year after an applicant arrived in Canada;19 and
- cancel or vary, suspend, or impose new conditions on immigration documents, including work permits.20
If enacted, the Bill will grant the federal government broad authority to pause or terminate temporary resident applications and further widen the discretion for the range of complications that can be levied on work permit holders' applications and statuses, exacerbating hiring challenges for employers.
Next Steps for Employers
With these numerous challenges in the landscape of immigration policy, employers should start the discussion about supporting foreign workers early so that both businesses and foreign workers can engage in proactive planning.
At a minimum, employers should conduct an audit to ensure that they have a handle on the numbers of foreign workers that they have in their workforce and the status of their work permits. An employee who is a temporary resident will have a social insurance number that starts with the number "9", so employers can quickly audit their workforce to determine how many employees are temporary residents. Employers must then follow up with those employees to ensure that they have current copies of their work permits and can determine what program the work permit was issued under and the options for renewal.
Our immigration team at McMillan is here to support with immigration compliance, corporate immigration training, immigration strategizing and planning, and immigration applications for employers of all sizes and industries.
Footnotes
1. Government of Canada, "2025-2027 Immigration Levels Plan" (24 October 2024).
2. Government of Canada, "CIMM – Immigration Levels Plan for 2024-2026 – November 07, 2023" (6 March 2024).
3. Government of Canada, "Ending flagpoling for work and study permits at the border" (23 December 2024).
4. Ibid.
5. Government of Canada, "Check processing times" (18 March 2025).
6. Anna Mehler Paperny, "Some migrants in Canada may lose work status while applications languish" (21 April 2025), Reuters.
7. Jae-Yeon Lim, "IRCC's Case Processing Centre's Work Permit Denials Raise Alarms" (18 February 2025) Canadian Immigration Lawyers Association.
8. Ibid.
9. Ibid.
10. Ibid.
11. Ibid.
12. Government of Canada, "Compliance information for employers hiring temporary foreign workers" (6 June 2025).
13. Ibid.
14. Government of Canada, "Penalties doubled compared to last year for non-compliant employers using the Temporary Foreign Worker Program" (17 January 2025).
15. Government of Canada, "Hire a worker with an LMIA: voluntary disclosure for employers" (16 May 2025).
16. Ibid.
17. Bill C-2, Strong Borders Act, 1st Sess, 45th Parl, 2025, Part 6 (first reading 3 June 2025).
18. Bill C-2, Strong Borders Act, 1st Sess, 45th Parl, 2025, s 33 (first reading 3 June 2025).
19. Bill C-2, Strong Borders Act, 1st Sess, 45th Parl, 2025, s 77 (first reading 3 June 2025).
20. Bill C-2, Strong Borders Act, 1st Sess, 45th Parl, 2025, s 77 (first reading 3 June 2025).
The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.
© McMillan LLP 2025
