A Labour Market Impact Assessment (LMIA) may be required if you are looking to hire a foreign employee. Companies hiring through the Temporary Foreign Worker Program may need first to obtain approval from the government to employ international talent. On this page, you will learn about LMIA, processing time, requirements, the application process, eligibility, costs, possible exemptions, success rate, and much more.
The Canadian immigration system is one of the most complicated in the world. Depending on the immigration pathway, you will likely encounter various applications, assessments, and even interviews by the Canadian immigration authorities and relevant government offices.
What is Labour Market Impact Assessment (LMIA) in Canada?
LMIA stands for Labour Market Impact Assessment. It is a form of assessment that the Canadian government uses for some companies looking to hire international talent. It analyzes whether an offer of employment to a foreign national will have a negative effect on the domestic employment market. If such an offer of employment will not have a negative impact, the employer will likely be given a positive LMIA and be able to offer the job to a foreign national.
Not all employers who want to hire foreign workers need an LMIA. You will only need to apply for an LMIA if the job that you are offering to your international employee falls within the LMIA framework. Alternatively, if you are not required to apply for an LMIA, you can hire your foreign worker directly through the Global Talent Stream program, Intra-Company Transfer program, or even TechImmigration programs.
LMIA Application Process: Step by Step
Canadian employers must follow the following 6-step application process in order to receive an LMIA
- Step 1: Make sure that your company is eligible to apply for an LMIA;
- Step 2: Comply with LMIA requirements for advertising and salary;
- Step 3: Submit LMIA application form online;
- Step 4: Wait for Employment and Social Development Canada (ESDC) to evaluate the job offer and the employer’s LMIA application form;
- Step 5: Attend an interview with an ESDC officer; and
- Step 6: Receive a Confirmation Letter from ESDC if your application was successful.
After LMIA is Approved, What is the Next Step?
After LMIA is approved, the next step is up to the employee. LMIA and the receipt of the Confirmation Letter are only one part of a foreign worker’s successful employment in Canada. The worker will also have to apply for a work visa (if from a visa country) and obtain a work permit at a Canadian border, and will need:
- A job offer letter
- A fully signed employment contract
- A copy of the LMIA
- The LMIA number
Employer Requirements for LMIA
LMIA requirements are extensive and can be hard to meet. If you are a Canadian employer that wants to hire foreign nationals that do not have a right to work in Canada – you will need to receive an LMIA approval. Below are the three most important requirements:
- The first requirement for all employers is to show evidence that they have attempted to search for qualified domestic workers who are Canadian citizens or permanent residents. You have no choice but to hire foreign workers because you cannot find suitable talent.
- The second requirement depends on whether you plan to hire a high-wage or a low-wage employee. If you plan on paying your foreign worker above the province’s median wage, then they will be classed as high-wage for LMIA purposes. If they are paid below the median wage in your province, they will be classified as low-wage workers.
- The third requirement entails an inspection for compliance with regulations and reporting on the Transition Plan’s progress. This requirement is only applicable to employers that have already been employing foreign workers under LMIA.
Hiring High-Wage Workers: Requirements
If you plan on employing a high-wage foreign worker, you must present the Transition Plan with your LMIA application. The Transition Plan outlines the employer’s measurable commitments to help the foreign employee transition into the domestic workforce during their employment with the Canadian employer and/or show a reduction in reliance on foreign talent.
You can do so by recruiting, retraining, and/or upskilling workers who are Canadian citizens or permanent residents. Employers can also show how they are helping their high-skilled temporary foreign workers to become permanent residents in Canada.
Median Hourly Wages by Province
|Province/Territory||Median hourly wages as of April 30, 2022|
|Newfoundland and Labrador||$24.29|
|Prince Edward Island||$21.63|
Hiring Low-Wage Workers: Requirements
If you plan on employing a low-wage foreign worker, then you are not required to submit the Transition Plan. However, your ability to hire foreign workers will be subject to a cap that the Government of Canada places to limit the number of low-wage temporary foreign workers.
If your company has 10 or more employees, the allowable proportion of temporary foreign workers you can employ is 20%. For applications that are submitted between 30 April 2022 and 30 April 2023, employers hiring workers in the following sectors and sub-sectors are eligible for a cap limit of 30%:
- Construction (NAICS 23)
- Food Manufacturing (NAICS 311)
- Wood Product Manufacturing (NAICS 321)
- Furniture and Related Product Manufacturing (NAICS 337)
- Hospitals (NAICS 622)
- Nursing and Residential Care Facilities (NAICS 623)
- Accommodation and Food Services (NAICS 72)
You must cover the costs of transportation to Canada at the beginning of the work period and return to the home country of your temporary foreign worker. You must also ensure suitable and affordable housing for your worker.
Upon receiving the LMIA application, ESDC will consider various factors to decide whether the Canadian employer is eligible to employ a foreign worker.
ESDC will assess the following factors:
- Is there an evident labour shortage that cannot be filled with Canadian residents in the region?
- Has the Canadian employer made appropriate recruitment efforts to offer the position to a local Canadian employee?
- Whether working conditions in compliance with municipal, provincial, and federal regulations?
- Does the salary offer consist of a fair representation of the average salary for that position in the geographical area?
- Will the worker be able to perform the employment duties and share their expertise and knowledge with Canadians?
- Whether the employer is involved in an ongoing employment dispute?
- Does the intended salary reflect the average salary for the profession and the region?
- Will employing a foreign worker have a positive impact on job creation and retention in Canada?
ESDC will adjust its assessment method depending on the type of work and worker the employer intends to hire. This adjustment to LMIA requirements is very important, and the employer must refer to them to achieve a positive LMIA application outcome.
In our experience, the success rate of LMIA applications is between 60% and 85%. In our experience, applications that are well-prepared and carefully reviewed receive higher approval rates. The approval, however, will always depend on numerous factors like the ability of the employer to meet LMIA requirements as to the job advertisement, salary for the proposed position, as well as the general eligibility of the employer to hire international workers. Having an experienced corporate immigration lawyer advising you with the LMIA applications can generally increase your chances of approval.
There are numerous reasons why LMIA applications are rejected. Below we have compiled a list of the top 3 reasons for denials:
To get an LMIA work permit, your Canadian employer must first apply for the LMIA with the ESDC. If the application is approved, then the foreign worker can initiate the application process for a work permit. It is essential for the foreign worker to meet all of the requirements for a work permit in order to work in Canada. LMIA approval is not enough to bring a foreign worker to Canada.
LMIA process is not free. If a company applies for an LMIA, they will have to pay $1000 per application. However, there are exceptions where employers may pay less. These are dependant on the salary of the position as well as the immigraiton program.