Canada’s Cut to Foreign Workers Pushes Ontario Resorts Toward Crisis
Ontario’s multi-billion-dollar tourism sector is facing an unprecedented staffing crisis, as sweeping federal cuts to Canada’s Temporary Foreign Worker Program (TFWP) begin to take effect. Resorts, particularly in rural and seasonal destinations such as Blue Mountain and Totem Resorts, are being forced to scale back operations due to staffing shortages — with some even considering partial closures.
The changes, part of the federal government’s broader immigration reform announced earlier this year, have reduced employer caps, shortened work permit durations, and introduced tougher eligibility thresholds. The goal: reduce temporary resident levels and prioritize Canadian workers. But industry leaders say it’s come at the worst possible time — the height of the 2025 summer travel boom.
A $22 Billion Industry on the Brink
Ontario’s tourism economy employs more than 200,000 people and contributes over $22 billion annually to the province. Resorts like Blue Mountain, Georgian Bay lodges, and Totem Resorts rely heavily on seasonal and international workers — often brought in via the TFWP — for critical roles in hospitality, housekeeping, and food service.
Previously allowed to staff up to 30% of their workforce with TFWs, many businesses are now limited to just 10%, as per the federal government’s 2025 changes. That shortfall is pushing operations to the brink.
“We’re turning away guests because we simply can’t guarantee service,” said Stephanie Brown, Reservation Manager at Totem Resorts.
“There’s no one else to hire locally. We’ve depended on international workers for years.”
At Blue Mountain, managers report they may need to shut down sections of the resort or increase prices to make up for lost revenue and increased overtime costs. Typically hiring between 1,500–2,000 seasonal staff, Blue Mountain says it now faces a 20–30% shortage.
Details of the 2025 TFWP Cuts: What Changed?
As part of the 2025–2027 Immigration Levels Plan, the Canadian government announced the following measures for the TFWP:
- Cap Reduction: Employers in tourism and hospitality now capped at hiring 10% of staff through TFWP (down from 20–30%).
- Permit Duration: Low-wage work permits reduced from 2 years to 1, requiring more frequent applications.
- Regional Unemployment Restriction: In areas with 6%+ unemployment, hiring low-wage TFWs is banned, except for agriculture/health.
- Wage Threshold Increase: Minimum wage for TFWs raised by up to 20%.
- Spousal Work Permits Restricted: Only spouses of high-skilled workers now eligible.
- Processing Delays: TFWP permit processing times have ballooned to 196 days, further complicating summer hiring.
Economic Fallout and Industry Reactions
Resorts warn the shortage of staff could result in:
- Reduced bookings
- Longer wait times and poor guest experiences
- Permanent closures in smaller communities
- Up to $2 billion in lost revenue for Ontario’s economy (TD Economics estimate)
A 2025 Restaurants Canada survey found that 80% of hospitality businesses in rural Ontario rely on TFWs for at least 10% of their workforce. 40% said they may reduce operating hours or shut down entirely.
“This is a one-size-fits-all approach that ignores rural and seasonal labor realities,”
said Kelly Higginson, CEO of Restaurants Canada.
Calls for Reform: What Industry Leaders Want
Stakeholders and policy analysts are urging the federal government to:
- Exempt tourism-dependent regions from caps
- Introduce sector-specific limits based on labor demand
- Offer faster pathways to permanent residency for trusted TFWs
- Increase training subsidies and youth employment programs for Canadians
- Improve processing speed for seasonal labor permits
Meanwhile, some resorts are exploring creative options like staff housing, automation, and off-season recruiting — but admit these are costly and limited in scope.
Political Debate Intensifies
The Liberal government defends the cuts as necessary to combat housing shortages and exploitation. Minister Randy Boissonnault said,
“This is about putting Canadians first while maintaining a fair and sustainable system.”
But opposition parties and business leaders argue the reforms are ill-timed and risk gutting a thriving sector.
“They broke the system and are now overcorrecting at the cost of small businesses,”
said Conservative MP Melissa Lantsman.
Bottom Line
Canada’s new TFWP caps aim to prioritize local employment — but for Ontario’s resort and tourism sector, the sudden changes are threatening to derail an already delicate post-pandemic recovery.
Unless adjustments are made, the tourism-rich regions of Ontario may face a slow, quiet crisis — not from a lack of visitors, but from a lack of workers to serve them.
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