If your work permit runs through an LMIA and a staffing agency, recruiter, or third-party placement firm is involved anywhere in the chain, Service Canada just published guidance that directly affects you. On September 18, 2026, it added a new "Employers" section — worded identically — across eight different Temporary Foreign Worker Program streams, spelling out exactly who counts as the employer, and ruling out two arrangements that have quietly become common: staffing agencies applying for LMIAs on behalf of workers who actually report to someone else, and employers reclassifying temporary foreign workers as independent contractors.
What happened
Service Canada, which runs the LMIA process on behalf of Employment and Social Development Canada (ESDC), updated the program-requirements pages for eight TFWP streams with a section marked "New: September 18, 2026." The change applies to the high-wage stream, low-wage stream, Global Talent Stream, Agricultural Stream, Seasonal Agricultural Worker Program, in-home caregivers, LMIAs supporting permanent residence, and the Recognized Employer Pilot — the same core language repeated across all eight.
This is guidance, not a new law or a regulation change under the Immigration and Refugee Protection Regulations. It doesn't touch IRCC's side of the process (work permit issuance); it changes how Service Canada officers assess who qualifies as the employer before an LMIA is approved.
Who actually counts as "the employer" now
Service Canada defines the employer as the entity that hires the worker, sets their working conditions, and directly pays them — and it will weigh a specific list of factors to determine who that really is, regardless of who signs the paperwork:
- Who is obligated to meet TFWP requirements under the Immigration and Refugee Protection Act
- Who directly benefits from the worker's labour
- Who decides where, when, and how the work gets done
- Who pays wages and handles statutory deductions (income tax, CPP/QPP, EI)
- Who assigns duties, sets expectations, and monitors performance
- Who has the authority to fire the worker
- Who the worker themselves recognizes as their employer
- Who signs the employment agreement on or before day one
The staffing agency door just closed
The clearest line in the new guidance: a staffing or employment agency that recruits a worker for a different business — one that actually controls the daily work — is not considered the employer under the TFWP, and cannot be approved to hold the LMIA in that scenario. Service Canada will look past who submitted the application to who actually functions as the employer in practice.
To be clear about what this doesn't say: staffing agencies aren't banned from Canada's labour market, and existing arrangements aren't automatically invalidated. The guidance targets one specific structure — an agency holding the LMIA while a separate client company runs the actual employment relationship — and gives officers explicit criteria to catch it going forward.