Why Tim Hortons Is Pulling Back on Temporary Foreign Workers

The decision comes at a moment when Canada’s labour market is changing rapidly. Canada faced a period of worker shortages during the COVID-19 recovery years. However, more recently, Canada’s unemployment rate has been increasing. The unemployment rate as of April 2026 is 6.9 percent. As a result, Canadian employers are now seeing more job applicants, less hiring demand, and growing political pressure around temporary immigration programs.

For large employers and small businesses alike, the announcement may signal a broader transition in how Canadian companies approach hiring in 2026 and beyond.

Why Canadian Employers Turn to Temporary Foreign Workers

During the pandemic recovery years of 2022-2023, many Canadian employers struggled to hire enough workers. The unemployment rate fell to its lowest point on record. Restaurants, hotels, farms, trucking companies, and retail businesses across the country reported severe labour shortages as the economy reopened.

The Temporary Foreign Worker Program became an important tool for businesses that could not fill positions locally. The TFWP allows Canadian employers to apply for permission to hire workers from abroad for specific jobs and specific locations, particularly in sectors facing shortages. Workers hired through the TFWP are eligible to apply for an employer-specific work permit.

Fast food employers became especially associated with the program because of the industry’s high turnover rates and difficulty retaining staff.  Tim Hortons in particular became a lightning rod in the debate over temporary foreign workers. Critics argued that large corporations were becoming overly reliant on temporary labour at a time when many Canadians, especially younger workers, were struggling to find entry-level jobs.

Canada’s federal Conservative Party claimed that Tim Hortons had increased its use of temporary foreign workers by more than 1,100 percent over a four-year period. The party went as far as to call for the end of the TFWP. Tim Hortons tried to downplay this criticism, arguing that many franchisees still faced genuine labour shortages, particularly outside major urban centres. Still, the public backlash helped transform the TFWP into a major political issue and increased pressure on Ottawa to tighten the program’s rules.

Although the governing Liberal party pushed back against some Conservative claims, they did acknowledge issues with the program, promising to reduce the number of temporary residents in Canada to less than 5 percent of the population by 2027.

At the same time, many newcomers viewed these jobs as an important entry point into the Canadian labour market. For some workers, a temporary job offer also became a pathway toward permanent residence later on.

Temporary Foreign Workers Are Only One Part of Canada’s Temporary Resident System

Public discussions about temporary residents in Canada often group several very different immigration programs together. Temporary foreign workers are not the same as international students, Post-Graduation Work Permit (PGWP) holders, or participants in the International Experience Canada (IEC) program.

The TFWP is employer specific. Workers are typically tied to a particular employer and location. The TFWP includes a stream for high-wage positions and another for low-wage positions.

Notably, in 2024, Canada capped the number of employees and employer may hire through the low-wage stream of the TFWP to only 10 percent of their workforce. The government also increased the wage threshold for high-wage positions, making more employers subject to the low-wage conditions.

The TFWP also includes streams for agricultural workers, caregivers, and a handful of other positions.

In order to hire a worker through the TFWP, first an employer must complete a Labour Market Impact Assessment (LMIA) demonstrating that they were unable to find a Canadian worker to fill a position. An LMIA application costs $1,000 per position, not accounting for money the employers spend on advertising the job.

In contrast to the TFWP, Canada offers a range of LMIA-exempt work permits through the International Mobility Program (IMP). The IMP is a big umbrella program encompassing many types of work permits including Post-Graduation Work Permits, IEC Working Holiday work permits, Spousal Open Work Permits (SOWPs), and more.

Many employers across Canada rely heavily on workers from these other programs as well, particularly in hospitality, tourism, and retail. In March, about 75 percent of new worker arrivals came through the IMP rather than the TFWP.

What Has Changed for Canada’s Temporary Foreign Workers?

Canada’s labour market in 2026 looks very different from the one employers faced two or three years ago. Economic growth has slowed, hiring has cooled in several industries, and unemployment has risen, especially among younger Canadians.

Currently, the youth unemployment rate is at 14.3 percent, up from 10.7 percent before the pandemic. Employers that once struggled to attract applicants are now reporting that they receive significantly more resumes for entry-level positions.

Recent federal data also shows that Canada is already sharply reducing the number of temporary residents entering the country. Between January and March 2026, Canada saw approximately 75 percent fewer new student and worker arrivals than during the same period in 2024.

The reduction has been especially visible in temporary worker arrivals. Canada welcomed 13,910 new work permit holders in March 2026, far below the levels seen in 2024. Only 3,500 of those came through the TFWP, a decrease of 27 percent from a year earlier.

The federal government has made clear that this slowdown is intentional. Ottawa is attempting to reduce the number of temporary residents in Canada to below five percent of the country’s population by the end of 2027.

Young Canadians Are Facing a Tougher Job Market

Part of the public conversation around temporary foreign workers is also being shaped by growing concerns about youth employment. Since 2022, the youth unemployment rate has risen at a pace never seen before outside a recession.

Across Canada, many younger workers are finding it harder to secure entry-level jobs that were once relatively easy to find. Retail, hospitality, and food service positions have become more competitive in many urban labour markets. At the same time, some entry-level work is beginning to change because of automation and new technologies. Self-order kiosks, app-based ordering systems, and AI-powered software are slowly reducing the amount of labour needed for some routine tasks.

These technologies aren’t replacing large numbers of workers overnight, but they are contributing to a labour market where employers may need fewer staff than they once did, especially for customer service and entry-level roles.

Why This Matters Beyond Tim Hortons

Tim Hortons is not your average Canadian employer. The company is massive and it’s hiring decisions will have ripple effects. The company operates thousands of locations across Canada and plays a major role in entry-level job opportunities, especially for students, newcomers, and younger workers. That means changes to its hiring strategy are likely to be watched closely by other employers.

Large corporations may rethink their reliance on temporary foreign workers if the unemployment rate remains high and it becomes easier to find local workers. Small and medium-sized businesses could follow a similar path, too.

At the same time, labour shortages have not disappeared everywhere. Many rural and remote communities still struggle to recruit enough workers locally, particularly in food service, agriculture, healthcare, and seasonal industries.

Rural labour shortages are so bad that the government recently raised the low-wage cap on TFWPs from 10 percent to 15 percent for some rural employers. Outside major cities, temporary foreign workers will continue to play an essential role for years to come. This is part of the reason why the TFWP encompasses streams for agricultural workers.

What Does This Mean for Newcomers?

For newcomers already in Canada, the Tim Hortons decision echoes the tough market conditions for workers seeking an entry-level job. If other companies follow Tim Hortons’ approach – reducing reliance on TFWs – this may open up more job opportunities for those already in Canada, but it’s too early to know for sure.

For those outside Canada, the Tim Hortons decision continues trends in recent years to reduce the number of temporary residents coming to Canada. Despite the reductions, Canada is still heavily relying on immigration overall, including temporary workers in sectors facing shortages. The federal government also continues to prioritize pathways that help temporary residents transition to permanent residence – like the Canadian Experience Class (CEC) of Express Entry.

In other words, the door is not closing entirely. But – the labour market conditions that shaped Canada’s immigration system during the post-pandemic boom years are changing quickly. As a result, it continues to become more challenging for foreign workers seeking jobs in Canada.