Labour Market Impact Assessment

An LMIA shows the need for temporary workers to fill labour shortages that Canadian applicants are not available or able to fill. Canadian employers must prove that they gave Canadian residents and citizens priority consideration over foreign nationals. Employers wishing to hire workers from overseas can do so through the Temporary Foreign Worker Program (TFWP).

The Canadian Labour market is updated every quarter and the decision to inject foreign employees into the market by issuing work permits is the sole responsibility of the Immigration, Refugees and Citizenship Canada (IRCC).

An employer hiring foreign nationals may obtain a positive LMIA showing the need to fill specific positions, but this does not guarantee that work permits will be granted to the prospective workers.

Page Contents

• Overview of Labour Market Impact Assessment
• What Is Labour Market Impact Assessment?
• The Temporary Foreign Worker Program
• Hiring Low-Wage Temporary Foreign Workers
• Hiring High-Wage Workers
• What Is The LMIA Process?
• LMIA Employer Requirements
• Employer Transition Plans
• When to Expedite An LMIA Application
• LMIA Advertising Requirements
• LMIA Exemption
• LMIA Application Fee
• How Can IAS Help?

Labour Market Impact Assessment (LMIA) is a report that an employer in Canada obtains before hiring workers overseas. Some job positions do not require an LMIA document before they can be filled by a non-citizen or permanent resident.

A positive LMIA indicates that a foreign national is needed to fill a specific occupation and is sent through a confirmation letter. The prospective worker can apply for a work permit with the confirmation of a positive LMIA. Positive LMIAs are valid for 18 months from the date of issuance.

When an employer looks to hire an employee that is not a Canadian citizen, and has submitted the relevant documents for the LMIA report, the Canadian immigration authorities would review the application to determine the implications hiring such a worker would have on the Canadian labour market in the short-term and long-run.

If an LMIA is required, it is mandatory and must be gained before offering a role to an overseas worker. If the LMIA is positive, the overseas candidate is then able to submit their application for a work permit.

LMIAl also seeks to establish that the job didn’t go to the foreigner to the detriment of a Canadian citizen or permanent resident and that the intending employer can pay the provincial standardised salary and benefits to the employee.

Applying for LMIA can be done based on the classification of the prospective employee as high or low wage. If the employee is paid according to the territorial median wage, they are placed in the low wage category while the category is high wage if they will be paid above the median wage.

The Canadian Government supplements its workforce for specific fields on the National Occupational Classification (NOC) list through the Temporary Foreign Worker Program (TFWP).

The Employment and Social Development Canada (ESDC) is the Canadian government department overseeing the LMIA process. The ESDC considers these elements to assess the genuineness of a job offer:

• Are the proposed working conditions consistent with relevant collective agreements or labour laws?
• Is there a transition plan in place for highly skilled foreign prospects?
• Is your business and job offer legitimate?
• Are you offering the standardised salary for the occupation in that location?
• Can the job position only be filled by a temporary worker?
• Is there an ongoing or foreseeable labour dispute in the company?
• Will the international worker be able to transfer skills or expertise to domestic workers?
• Will hiring the international worker help to create or retain jobs for citizens?

The TFWP is categorised into two streams: higher-skilled workers and lower-skilled workers. When the skill level is 0, A and B of the National Occupational Classification (NOC) system workers are categorised as higher-skilled category while skills levels C and D place them in the lower-skilled category.

This classification will be replaced by the 6-category system: Training, Education, Experience and Responsibilities (TEER) from November 2022.

Each of these two categories have two other sub-categories. When the prevailing wage fixed by the ESDC falls below the regional median earning, the stream will fall into the low earning sub-category. It is in the high earning sub-category when it falls above the regional prevailing wage. Therefore, we have:

• Higher-skilled jobs for high-earning hires
• Higher-skilled jobs for low-earning hires
• Lower-skilled jobs for high-earning hires
• Lower-skilled jobs for low-earning hires

If an employer with 10 or more employees is hiring foreign workers, some conditions are attached to their ability to apply for a new LMIA. If the sector has labour shortage, about 30% of their hires can be done through the temporary foreign worker stream into low wage positions.

If you plan to employ a low-wage foreign worker, you do not need a plan for transition. However, you must adhere to the limit set by the Government of Canada for low-wage temporary foreign workers which is 20%. The limit is to ensure only Canadians and permanent residents receive the first consideration. An exemption to this limit exists for farm supervisors and specialized livestock workers.

If you plan to employ a high-wage foreign worker under the Temporary Foreign Worker Program (TFWP), present the transition plan and your LMIA application to the ESDC.

Your plan should be about your commitment to domesticate the foreign skills by helping the foreigner to merge into the national workforce, upskilling citizens for the role or doing both. Workers in this category are offered at or above the territorial median wage.

Employment and Social Development Canada (ESDC) reviews LMIS applications. You will be notified of a positive assessment of your application through a confirmation letter. You can then take the steps to hire foreign nationals afterwards.

Since you are assessing the labour market impact on hiring an international talent, the process is not complete for you until you successfully employ the prospective worker(s) in Canada.

Besides the LMIA report and receipt of the confirmation letter at your end, the intended worker has to apply for a work visa (where necessary) and secure a work permit. They’ll need to present this at these document to immigration officials:

• The job offer letter.
• Signed employment contract.
• A copy of the LMIA.
• The LMIA number.

Higher-skilled jobs for high-earning hires

• Federal and provincial job bank posting for at least 28 days (and until LMIA is issued).
• Two additional sources of advertising and one must have a national scope.
• A completed and detailed transition plan.

Higher-skilled jobs for low-earning hires

• Federal and provincial job bank posting for at least 28 days (and until LMIA is issued).
• Two additional sources of advertising and one must have a national scope.

Lower-skilled jobs for high-earning hires

• Federal and provincial job bank posting for at least 28 days (and until LMIA is issued).
• Two additional sources of advertising and one must target under-represented groups.
• A completed and detailed transition plan.

Lower-skilled jobs for low-earning hires

• Federal and provincial job bank posting for at least 28 days (and until LMIA is issued).
• Two additional sources of advertising and one must target under-represented groups.

A Canadian employer considering hiring foreign high wage workers and high-earning talents for lower-skilled jobs should show that they are taking appropriate steps to address their dependence on imported labour. A major way to show good faith is to take proactive steps to train and recruit domestic workforce.

Transition plans should show that in the long term, a Canadian worker or Canadian residents and citizens can fill such positions. The plan is an addition to the existing recruitment and advertising requirements for employing international talents.

The activities for the plan include:

• Three additional recruitment activities.
• An additional activity that targets underrepresented groups.
• An activity to help temporary foreign talents transition to permanent residence.
• A projected estimate of the Canadians or permanent residents they aim to recruit through these activities.
• Proposed timelines for the listed activities.
• Submit the results of the implemented activities as feedback to ESDC.

As a Canadian employer, you cannot hire a temporary foreign worker legitimately until you have proved that you could not find a suitable domestic worker after making significant efforts.

Ideally, your effort should include advertising the position for at least 4 weeks on the Government of Canada’s Job Bank portal or other boards with national reach. You must also take deliberate steps to ensure the advertisement reaches minority groups.

Some employers are not required to receive LMIA approval before they can employ temporary foreign workers. The International Mobility Program provides exemption codes for employers’ recruitment efforts.

However, these exemptions do not erase the need for a work visa (where necessary) and work permit. When applying for jobs as a foreign worker, you still need your work permit code.

These overseas workers are exempt from an LMIA approval:

• Canada-International Free Trade Agreements – If the foreign worker is a citizen of a country that has a FTA with Canada.
• Global Talent Stream – If the position you are looking to fill is on ESDC’s Global Talent Occupations list. The concerned foreign worker will also receive fast-tracked work permit processing.
• CUSMA Countries – If the foreign worker is from the US or Mexico, they are likely to be eligible for LMIA exemption.
• Intra-Company Transfer Program – If a foreign company transfers their foreign worker to Canada through an ICT program.

LMIA application fee is CAD $1,000 for each job post. This fee is per position not per application and it must be paid by the employer, not the prospective employee.

If an employer is looking to apply for 5 positions, the fee would be CAD $5,000. This fee does not include any associated processing fee (like legal) that may be accrued prior to the approval.

Immigration, Refugees and Citizenship Canada (IRCC) in conjunction with Employment and Social Development Canada (ESDC) are responsible for bringing foreign employees into Canada sustainably. The Labour Market Impact Assessment (LMIA) guarantees that foreigners’ opportunity to work in Canada does not compromise domestic workers’ potentials.