Employment Minister Jason Kenney is suspending the food services sector's access to the Temporary Foreign Workers Program.
He says a moratorium is being imposed on any new or pending applications related to the food services sector.
A statement from Kenney says the moratorium will remain in place pending a government review of the program and allegations of abuse.
The announcement comes on the heels of a report by the C.D. Howe Institute that is critical of the program, saying it has spurred joblessness in western Canada.
The C.D. Howe study says making it easier for employers to hire temporary foreign workers has accelerated the rise in jobless rates in Alberta and British Columbia.
Fast-food giant McDonald's already announced it was freezing its participation in the program after it found itself in hot water over a franchise in B.C. that hired temporary foreign workers.