Canada announces new work licence system; international graduates to be most affected

Ottawa: Canada has announced plans to replace its popular open work permit system with a new employer-linked work licence framework beginning January 2026.

According to HMSC Times, the reform—set to be rolled out in phases through 2028—will redefine how foreign workers, international graduates and temporary residents access employment. The changes are expected to limit job mobility and tie work authorisation more closely to verified labour shortages.

Under the current system, open work permits allow foreign nationals to work for almost any employer in Canada without job-specific authorisation. However, Canadian authorities say the model has created gaps in labour market oversight and made it difficult to ensure foreign workers are employed in sectors facing genuine shortages.

From 2026, the federal government plans to introduce a New Work Licence Framework that will link work authorisation to a specific employer, occupation and wage range. Policy briefings indicate the reforms are driven by the need to align immigration more closely with labour market demand.

Under the new system, licences will generally be valid for the duration of a job contract or a Labour Market Impact Assessment (LMIA). Job mobility will be restricted, requiring workers to submit a new application if they wish to change employers, HMSC reported.

International graduates are expected to be among the most affected by the reforms. Currently, graduates of eligible Canadian institutions can obtain a Post-Graduation Work Permit (PGWP), which allows them to work freely after completing their studies.

Under the new framework, this pathway will transition into a Post-Graduation Work Licence, with eligibility dependent on securing a job offer in an approved or high-demand occupation.

The first phase of implementation in 2026 will focus on post-graduation work permit holders. In 2027, the system will expand to include spouses of foreign workers and international students. By 2028, the new model is expected to apply to most categories of temporary foreign workers, completing the shift away from open permits.

The report also noted that employers will face expanded responsibilities under the new regime. Businesses seeking to hire foreign workers will be required to register with federal authorities, meet prescribed wage standards and demonstrate ongoing compliance with labour regulations.

Despite the sweeping changes, the government has indicated that certain groups will continue to qualify for open or flexible work permits after 2026. These include refugees and humanitarian applicants, victims of abuse or exploitation, and select family reunification cases.