Labour Market Impact Assessment
Canada’s LMIA process determines how offers of employment to foreign workers will impact the Canadian labour market and workers.
JUMP TO SECTION: High Wage | Low Wage | Owner/Operator
What is a Labour Market Impact Assessment (LMIA)?
There are two main ways to employ a foreign national in Canada, through the Temporary Foreign Worker Program (TFWP) or through the International Mobility Program (IMP). Most employers will need to apply for an LMIA through the TFWP before hiring a temporary worker unless an LMIA exemption under the IMP exists.
An LMIA application is assessed by Employment and Social Development Canada (ESDC) to confirm there is a need for a temporary foreign worker and no Canadians or permanent residents are available or qualified to do the job. Once an LMIA is issued, it is generally valid for a maximum of six months, and the employee must apply for a work permit (or permanent residence, depending on the type of LMIA obtained) prior to the end of this period.
The Temporary Foreign Worker Program is intended for employers facing short-term and labour shortages, and only when there are no Canadian citizens or permanent residents to fill the position. As an employer of the Temporary Foreign Worker Program, you must comply with the program requirements. ESDC has several mechanisms in place to verify an employers' compliance with the program requirements, and those that fail to comply will be subject to consequences.
The Five Labour Market Streams
The process and documentation for an LMIA will vary depending on the type of program you are hiring through. ESDC has identified five labour market streams under the TFWP:
Primary Agriculture Stream
High Wage Labour Market Impact Assessment
The wage being offered to the foreign worker will determine whether the LMIA is processed under the stream for high-wage positions or low-wage positions. If the wage being offered is at or above the provincial/territorial hourly median wage, you must apply under the stream for high wage positions.
The employment being offered to a temporary foreign worker must be a full-time position (at least 30 hours per week). For first-time LMIA applications, employers are required to provide evidence of their business legitimacy and that their job offer is genuine. If an employer has obtained a positive LMIA within two years of applying, they are not required to provide evidence of the business and job offer legitimacy. ESDC can at any time request additional supporting documents if necessary.
Transition Plan
The transition plan is a key piece of a high-wage LMIA application. It describes the activities an employer will commit to in order to recruit, retain and train Canadians and permanent residents to reduce the reliance on the temporary foreign worker program.
Three distinct activities to recruit, retain or train Canadians and permanent residents and one additional activity that targets underrepresented groups such as new immigrants, indigenous people or people with disabilities.
OR
One activity to facilitate the transition of the temporary foreign worker to permanent residence
To fulfill the requirements of a transition plan, employers must either:
In some cases, employers may be exempt from the transition plan requirement; for example, if the position is for a limited duration or requires unique skills that are not readily available in Canada.
Recruitment Efforts
Employers must conduct recruitment efforts to hire a Canadian or permanent resident before offering the position to a foreign worker and applying for an LMIA. Successful LMIA's start with good recruitment efforts and any deviation
At least three recruitment activities must be conducted for four consecutive weeks within three months prior to submitting the LMIA application. To satisfy the minimum recruitment requirements, the job opening must be posted on the Government of Canada's Job Bank and on two other platforms.
The two additional methods of recruitment must target an audience that has the appropriate education, professional experience or skill required for the occupation. One of the methods must also be international in scope and easily accessible to Canadians and permanent residents in other provinces and territories. If both additional methods are online, they must each have a unique value and reach different audiences.
At least one of the three recruitment activities must be ongoing until the date a decision is made on the LMIA application.
Job Match Service
As of August 28, 2017, employers are required to use the job match service. Job match allows employers to see anonymous profiles of job seekers that meet the skills and requirements described in the job posting, ranking them using a five-star system. For high-wage positions, employers must invite all four-star or more ranked job seekers to apply for the position within 30 days of advertising.
Get help with your LMIA application.
To learn more about high-wage job offers and to apply for an LMIA, book your consultation with one of our licensed professionals.
Low Wage Labour Market Impact Assessment
The position being offered must be a full-time position, at least 30 hours per week.
If the wage being offered for the position is below the provincial or territorial median hourly wage, you must apply through the stream for low-wage positions. Low wage positions vary significantly in their requirements from a high-wage position and are generally more challenging.
Cap
Employers are subject to a cap on the proportion of temporary foreign workers that can be hired in a low-wage position at the specific work location unless an exemption applies. Companies with ten or more employees are subject to the cap.
The cap was implemented to provide employers time to transition to a Canadian workforce. The following applies:
If an employer hired a foreign national in a low wage position before June 20, 2014, they are subject to a 20% cap on the number of foreign nationals in low-wage positions or the employers' established estimated cap (whichever is lower) or,
If an employer hired a foreign national in a low-wage position after June 20, 2014, they are subject to a 10% cap on the number of temporary foreign workers in a low-wage position
The percentage is determined for each individual worksite location and based on the paid positions and total hours worked at that worksite.
Recruitment
To meet the minimum advertising requirements under the low-wage position, the employer must conduct at least three different recruitment activities that include:
Advertising on the Government of Canada's Job Bank.
At least two additional methods of recruitment that are consistent with the occupation. Each of these two methods must target a different underrepresented group: indigenous persons, vulnerable youth, newcomers and persons with disabilities
Recruitment efforts must have occurred within three months prior to the submission of the LMIA and be for a minimum of four consecutive weeks. At least one of the three recruitment activities must be ongoing until a decision is made on the LMIA application.
Job Match
Similar to the high-wage positions, employers must use the job match function. Job match allows employers to see anonymous profiles of job seekers that meet the skills and requirements described in the job posting, ranking them using a five-star system.
For low-wage positions, you are required to invite all job applicants that are rated two stars or more within the first 30 days of the job advertisement going live.
To learn more about low-wage job offers and to apply for an LMIA, book your consultation with one of our licensed professionals; click here.
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Step 2
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Owner/Operator Labour Market Impact Assessment
The owner-operator is perhaps one of the less understood recruitment exemptions in the LMIA stream. Self-employed individuals can either establish a new business or purchase an existing business. To be eligible, the owner/operator must demonstrate they are integral to the day-to-day operation of the business and will be actively involved in business processes and service delivery in Canada.
Ownership does not necessarily guarantee a foreign national qualifies; to qualify as an owner-operator, a foreign national must also demonstrate a level of controlling interest in the business, and they must not be able to be dismissed. ESDC will undertake an assessment of the genuineness of the job offer and on job creation, retention or transfer of skills to Canadians. Some key factors include how advanced the transaction is, how sound the business plan is to acquire ownership in the share of the business as an owner or co-owner, what percentage is being transferred, if not all, and whether there is an intent to hire or retain Canadian workers.
If establishing a new business, ESDC will no longer consider anticipatory situations as such, start-up companies or franchise owners will likely not be approved. ESDC has emphasized that being actively engaged in business is a core requirement. This means you must have a physical location, employees and customers before you can apply. Additionally, LMIAs for NOC 00 positions will need to demonstrate senior staff and managers on payroll. These positions must exist, be filled and be ready to be overseen by a NOC 00 position at the time of the LMIA application. ESDC will no longer be considering anticipatory situations.
A slight benefit to owners/operators is they are not required to perform recruitment efforts, but they must still demonstrate through a transition plan that their entry will create and retain employment opportunities or transfer of skills to Canadians and permanent residents.
It's important to note that receiving a positive owner/operator LMIA does not guarantee the issuance of a work permit but will give express entry applicants an additional 50 or 200 points.
To learn more about owner/operator LMIA, book your consultation with one of our licensed professionals, click here.