Canada Expands Low-Wage LMIA Access for Employers with Multiple Small Work Locations

August 21, 2026

The Government of Canada has introduced an important change to the Temporary Foreign Worker Program (TFWP) that may provide greater flexibility to employers operating multiple small business locations.

Effective August 18, 2026, Employment and Social Development Canada (ESDC) updated the rules governing the calculation of the cap on low-wage temporary foreign workers for employers with fewer than 10 employees at a particular work location.

The change may be particularly significant for employers operating multiple restaurants, retail stores, hospitality businesses, construction locations, and other small worksites across Canada.

What Has Changed?

Under the Low-Wage Stream of the TFWP, employers are generally limited in the proportion of their workforce that can consist of temporary foreign workers employed in low-wage positions.

The standard cap is generally:

• 10% of the workforce for most employers; or
• 20% for certain designated sectors, subsectors, and occupations, including construction, food manufacturing, hospitals, nursing and residential care facilities, and certain caregiving occupations.

Previously, the special calculation available to very small employers was based more restrictively on the employer’s overall workforce.

Under the updated policy, the calculation now focuses on the number of employees at a given work location.

For an employer with fewer than 10 employees at a particular work location, ESDC uses a workforce size of 10 employees for the purpose of calculating the low-wage cap.

As a result, an eligible employer may employ a maximum of:

• 1 low-wage temporary foreign worker at a work location subject to the 10% cap; or
• 2 low-wage temporary foreign workers at a work location subject to the 20% cap.

This change is especially relevant to businesses that operate several smaller locations.

Example: Employer Operating Multiple Restaurants

Consider a restaurant company operating five separate locations, with each location employing fewer than 10 workers.

Under the updated rules, the special cap calculation can be considered at each individual work location, rather than limiting the employer based solely on having fewer than 10 employees across the entire organization.

If the applicable positions and business activities fall within a sector eligible for the 20% cap, the employer may potentially be able to employ up to two low-wage temporary foreign workers at each qualifying work location, subject to all other TFWP and LMIA requirements.

This can represent a meaningful change for multi-location employers that previously faced significant limitations because of the way their total workforce was calculated.

How Is the Workforce at Each Location Calculated?

For purposes of determining the cap, ESDC considers the total workforce at the specific work location.

This includes:

• Canadian citizens and permanent residents;
• temporary foreign workers employed through the LMIA process;
• employees holding other types of work permits;
• employees who are on leave but expected to return;
• temporary foreign workers approved under previous LMIAs who have not yet started employment; and
• vacant positions for temporary foreign workers being requested through the LMIA application.

Full-time employees working an average of 30 hours or more per week are counted as one employee.

Part-time employees working an average of less than 30 hours per week are counted as 0.5 of an employee for the purpose of calculating the cap.

The Change Does Not Eliminate Other LMIA Requirements

Employers should be careful not to interpret this policy change as a general relaxation of the Low-Wage Stream.

The employer must still satisfy all applicable requirements of the Temporary Foreign Worker Program.

Among other requirements, employers must demonstrate genuine recruitment efforts to hire Canadians and permanent residents before seeking to hire a temporary foreign worker.

Low-wage positions must also generally be full-time positions involving at least 30 hours of work per week.

Employers must comply with applicable wage requirements, recruitment and advertising requirements, business legitimacy requirements, employment standards, worker protection obligations, and other conditions established by ESDC.

The government processing fee also remains $1,000 for each LMIA position requested, unless a specific exemption applies.

The 6% Unemployment Rate Restriction Still Applies

Another important limitation remains in place.

Certain low-wage LMIA applications will not be processed when:

1. the position pays below the applicable provincial or territorial wage threshold; and
2. the work location is located within a Census Metropolitan Area (CMA) with an unemployment rate of 6% or higher.

Accordingly, an employer may satisfy the new workforce-cap calculation but still be unable to submit a processable Low-Wage Stream LMIA because of the unemployment rate applicable to the work location.

Employers should therefore assess both the workforce cap and the location-specific unemployment rate rules before proceeding with an LMIA application.

Additional Flexibility for Rural Employers

The federal government has also introduced temporary measures for eligible employers in rural areas of participating provinces and territories.

From April 1, 2026 to March 31, 2027, participating jurisdictions may allow qualifying rural employers to benefit from additional flexibility, including a 15% low-wage cap instead of the usual 10% cap and, in some circumstances, the ability to retain an existing proportion of low-wage temporary foreign workers above the standard cap.

Importantly for Atlantic Canadian employers, Nova Scotia, New Brunswick, and Newfoundland and Labrador are participating in these temporary measures, subject to the applicable eligibility requirements.

These rural measures are separate from the August 18 change for employers with fewer than 10 employees at a particular work location.

What This Means for Multi-Location Employers

The August 18, 2026 update may significantly improve access to the Temporary Foreign Worker Program for certain employers whose businesses are structured around multiple smaller worksites.

This can be particularly relevant to employers operating:

• multiple restaurant locations;
• small retail outlets;
• hospitality establishments;
• construction operations;
• nursing or residential care facilities; and
• other businesses with relatively small workforces at individual locations.

However, the availability of one or two low-wage positions at a particular location does not automatically mean that an LMIA will be approved.

The employer must still demonstrate compliance with the full TFWP requirements, including recruitment, wages, business legitimacy, working conditions, and all applicable worker protection requirements.

How Atlantic Summit Immigration Consulting Can Assist

LMIA applications have become increasingly technical, particularly where an employer operates multiple locations or is subject to different workforce-cap, wage, unemployment-rate, and recruitment requirements.

Before proceeding with an LMIA application, employers should carefully review:

• the number of employees at each work location;
• whether the position falls under the 10% or 20% cap;
• whether rural temporary measures may apply;
• the applicable wage threshold;
• the unemployment rate applicable to the work location;
• recruitment and advertising requirements; and
• the employer’s overall compliance with the Temporary Foreign Worker Program.

Atlantic Summit Immigration Consulting Inc. assists Canadian employers with assessing LMIA eligibility, developing recruitment strategies, preparing LMIA applications, and supporting foreign workers with their subsequent work permit applications.

Employers considering hiring or retaining temporary foreign workers are encouraged to obtain professional advice based on their specific workforce structure and work locations.