Canada Updates Work Permit Eligibility as Unemployment Rates Shift Across Major Cities

Canada’s Evolving Work Permit Landscape: Unemployment Rates and Their Impact

In July 2025, Canada’s unemployment rate dipped to 6.9%, marking its first decline since January of the same year. This shift, driven by the addition of 83,000 new jobs in June, has significant implications for employers and foreign workers alike.

Regional job market performance varied widely. Alberta, Quebec, Ontario, and Manitoba saw notable employment gains, while Newfoundland and Labrador and Nova Scotia experienced declines. Younger workers aged 25 to 54, both men and women, benefited the most from these trends.

Key sectors such as wholesale and retail trade, and health care and social assistance, reported strong employment growth. However, the agriculture sector faced a decline in employment, highlighting the uneven nature of Canada’s job market recovery.

Average hourly wages rose by 3.2% year-over-year, reaching $36.01 in June 2025. This steady wage growth reflects the ongoing strength of Canada’s labor market, despite regional disparities.

Unemployment Rates and Work Permit Processing: What’s Changed?

Canada’s unemployment rates play a crucial role in determining eligibility for low-wage Labour Market Impact Assessments (LMIAs). As of July 11, 2025, 26 census metropolitan areas (CMAs) across Canada now have unemployment rates of 6% or higher, rendering them ineligible for low-wage LMIAs.

This represents an increase from the previous quarter, when 24 regions were classified as ineligible. Major cities such as Toronto (8.9%), Vancouver (6.3%), Montreal (6.9%), Calgary (7.3%), Edmonton (7.6%), and Windsor (11%) are among the affected areas.

Employers in these regions with unemployment rates at or above 6% are now restricted from applying for low-wage LMIAs. This directly impacts their ability to hire foreign workers under the Temporary Foreign Worker Program (TFWP) for low-wage positions.

Why Unemployment Rates Matter for Work Permits

High regional unemployment rates trigger restrictions on hiring foreign workers for low-wage jobs. The Canadian government prioritizes job opportunities for citizens and permanent residents, especially in areas with elevated unemployment.

These restrictions are not static. Employment and Social Development Canada (ESDC) updates the list of ineligible regions every three months, based on the latest unemployment data. This approach reflects a data-driven strategy to balance labor market needs with immigration policies.

In summary, the recent drop in Canada’s unemployment rate and regional job market trends have far-reaching consequences. Employers and foreign workers must stay informed about these changes to navigate the evolving landscape of work permits and immigration opportunities.

Implications for Employers and Foreign Workers

The rise in ineligible regions for low-wage LMIAs presents significant challenges for employers, particularly those in high-unemployment areas. Companies in cities like Toronto, Vancouver, and Montreal must now seek alternative strategies to meet their labor needs, as they can no longer rely on the Temporary Foreign Worker Program for low-wage positions.

Employers are encouraged to explore hiring in regions with unemployment rates below 6% or to consider higher-wage LMIA options, which are not subject to the same regional restrictions. This shift may require businesses to reassess their hiring practices and possibly relocate operations to areas with more flexible labor market conditions.

For foreign workers, these changes mean that opportunities in major cities may be limited. Prospective workers should focus on sectors and regions where low-wage LMIAs are still permissible. Additionally, pursuing higher-wage roles or obtaining qualifications that align with demand in eligible regions could provide alternative pathways for employment in Canada.

The Canadian government’s approach underscores its commitment to balancing immigration with domestic labor market needs. By prioritizing jobs for Canadian citizens and permanent residents in high-unemployment areas, the government aims to maintain economic stability while addressing specific labor shortages through strategic immigration policies.

Conclusion

Canada’s evolving work permit landscape, influenced by shifting unemployment rates, presents both challenges and opportunities for employers and foreign workers. The recent drop in the national unemployment rate to 6.9% in July 2025, coupled with regional disparities, highlights the dynamic nature of the job market. Key sectors such as wholesale, retail, and healthcare have shown strong growth, while others like agriculture have faced declines, underscoring the uneven recovery.

The increase in regions with unemployment rates of 6% or higher has significant implications for low-wage Labour Market Impact Assessments (LMIAs). Employers in major cities like Toronto, Vancouver, and Montreal are now restricted from hiring foreign workers for low-wage positions under the Temporary Foreign Worker Program (TFWP). This shift necessitates strategic adjustments, such as targeting higher-wage roles or relocating to eligible regions.

For foreign workers, opportunities in high-unemployment areas may be limited, but focusing on sectors and regions where low-wage LMIAs are still permissible, or pursuing higher-wage roles, can provide alternative pathways. The Canadian government’s approach reflects a commitment to balancing domestic labor needs with immigration policies, ensuring economic stability while addressing specific shortages.

In conclusion, staying informed about these changes is crucial for both employers and foreign workers to navigate Canada’s evolving work permit landscape effectively.

Frequently Asked Questions (FAQ)

How do unemployment rates impact work permits in Canada?

Unemployment rates play a key role in determining eligibility for low-wage Labour Market Impact Assessments (LMIAs). Regions with unemployment rates of 6% or higher are ineligible for low-wage LMIAs, restricting employers in these areas from hiring foreign workers for low-wage positions.

Which regions are currently ineligible for low-wage LMIAs?

As of July 11, 2025, 26 census metropolitan areas (CMAs) have unemployment rates of 6% or higher, including Toronto (8.9%), Vancouver (6.3%), Montreal (6.9%), Calgary (7.3%), Edmonton (7.6%), and Windsor (11%).

What can employers do if their region is ineligible for low-wage LMIAs?

Employers in ineligible regions can explore higher-wage LMIA options or consider hiring in regions with unemployment rates below 6%. Relocating operations to eligible areas may also be a viable strategy.

Where can foreign workers still find opportunities in Canada?

Foreign workers can focus on sectors and regions where low-wage LMIAs are still permissible. Additionally, pursuing higher-wage roles or upskilling to meet the demands of eligible regions can provide alternative employment opportunities.

How often are the ineligible regions for low-wage LMIAs updated?

Employment and Social Development Canada (ESDC) updates the list of ineligible regions every three months, based on the latest unemployment data. This ensures that the restrictions align with current labor market conditions.