Canada is preparing for one of the most significant shifts in its temporary labour system in years, with the federal government set to phase out open work permits beginning in January 2026. The move is expected to reshape how foreign workers, international graduates and employers access jobs across the country, replacing flexibility with a more controlled, employer-linked system.

Officials say the change is aimed at tightening labour market oversight, protecting workers from exploitation and ensuring that job opportunities are aligned with verified shortages rather than oversupplied sectors.

Why this change matters

For hundreds of thousands of people working or planning to work in Canada, open work permits have offered freedom — the ability to change jobs, switch sectors and respond to economic shifts without reapplying for authorisation. Their gradual replacement with job-specific licences means employment choices, income stability and career mobility will increasingly depend on employer sponsorship.

Employers, meanwhile, will face new responsibilities, including registration, compliance checks and wage verification, fundamentally altering how they hire foreign talent.

What is changing under the new system

Under the current framework, open work permits allow foreign nationals to work for almost any employer without a job-specific approval. From 2026, Canada will begin transitioning to a New Work Licence Framework, where permits are tied to:

a specific employer
an approved occupation
a defined wage range
and a limited time period

Applications will be jointly reviewed by Immigration, Refugees and Citizenship Canada and Employment and Social Development Canada, giving authorities greater visibility into where and how foreign labour is being used.

Why Canada is ending open work permits

Government officials have pointed to several concerns driving the reform:

Open permits have contributed to labour oversupply in some sectors
Enforcement of wage and workplace standards has been difficult
Worker exploitation has increased in loosely regulated job markets
Labour data gaps have complicated economic planning

The new licence-based system is intended to direct foreign workers toward sectors facing genuine shortages, including healthcare, agriculture, skilled trades, manufacturing and information technology.

Who will feel the impact most

The changes will affect several groups directly:

International graduates
Post-graduation open work permits will be replaced with job-linked licences. Graduates will need confirmed job offers in approved occupations before receiving permission to work.

Spouses of foreign workers and students
Spouses who currently enjoy full employment flexibility may face sector-specific limits, unless exemptions apply under family reunification or humanitarian grounds.

Temporary residents awaiting permanent residence
Those using bridging open work permits during PR processing may be required to hold structured, short-term licences during the transition period.

A gradual rollout through 2028

To reduce disruption, the government plans a phased implementation:

2026: New rules applied first to post-graduation work permit holders
2027: Expansion to spouses of foreign workers and students
2028: Full transition for most temporary residents

What this means for employers

Canadian employers will play a more central role in immigration-linked hiring. Businesses must demonstrate compliance with labour laws, wage standards and sector eligibility. While industries facing acute shortages may benefit from faster approvals, smaller employers could struggle with added administrative demands.

What workers and students should do now

Foreign workers and students planning to stay in Canada are advised to:

Secure employer sponsorship early
Track which occupations are expected to remain eligible
Keep documentation, contracts and tax records organised
Explore permanent residence pathways such as Express Entry and provincial nominee programmes

The bigger picture

The reform is part of Canada’s broader effort to recalibrate immigration toward long-term economic needs rather than short-term flexibility. By 2026, officials estimate nearly one million foreign workers will be active in the labour market — and the government wants clearer alignment between immigration, skills and national priorities.

While the new system reduces freedom for many workers, authorities argue it will lead to safer workplaces, fairer wages and a more sustainable labour market over time.

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