OTTAWA (Reuters) - Canada will not allow restaurants to hire any more temporary foreign workers until the federal government completes a review of a programme set up as a last resort for employers to fill jobs when no qualified Canadians are available.

The moratorium, which only affects food-service businesses, follows a decision by the Canadian unit of McDonald's Corp earlier this week to suspend all of its applications under the Temporary Foreign Worker Programme. The federal government took the action, announced in a statement late on Thursday, after starting an investigation into alleged abuses of the programme within the food-service industry.

Mr Jason Kenney, the minister for employment and social development, said officials had placed a moratorium on processing new applications from food-service businesses, and it would stop restaurants from hiring workers for unfilled jobs when applications were already approved. Mr Kenny said the government was considering unspecified reforms of the programme to make sure employers recruit and train Canadians for jobs.

"Our government has been clear," he said in the statement."Canadians must have the first chance at available jobs."

The moratorium has no effect on a temporary foreign worker programme for the agricultural industry. The government said there were "proven acute labor shortages" in that industry, and unfilled farm jobs were short-term "by definition".

The Canadian Broadcasting Corp reported this month that a McDonald's franchise owner in Victoria, British Columbia, was bringing in foreign workers for three locations while turning away seemingly qualified Canadian job-seekers and cutting the local staff's working hours.

That was followed by similar media reports involving other McDonald's restaurants in Western Canada.

The company has cut ties with the Victoria franchise-owner but has defended its broader use of the Temporary Foreign Worker Programme, which it said it used only as a last resort in markets where there are severe labour shortages.

McDonald's said temporary foreign workers accounted for about 4 per cent of its 85,000-member Canadian workforce.

McDonald's is not the only company to face a backlash over its use of the controversial programme. Outside of food service, Royal Bank of Canada was criticised last year following a CBC report that United States outsourcing company iGate Corp used temporary foreign worker visas as it worked to replace a few dozen staff at the bank's Toronto investor services division.

RBC's chief executive officer later apologized to displaced employees and said they would be offered jobs elsewhere in the bank.