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, its requirements, process, eligibility, costs, possible exemptions, 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 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.
LMIA Process: Step by Step
Employment and Social Development Canada (ESDC) will evaluate the job offer and the employer’s LMIA application form. You can apply for LMIA using the online application form. Upon a positive assessment, ESDC will notify the employer with a Confirmation Letter.
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
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
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
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 the 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.
LMIA Processing Times
ESDC provides a relatively fast turnaround time for LMIA applications. Some employers can expect to receive a response within 10 business days. However, ESDC can take a few months to respond to your application during high application seasons. So, Canadian employers must time their applications accordingly by putting a 1 or 2 months buffer time. This delay may also affect workers’ timing of work permit applications.
Expedited LMIA Application
It is possible to receive a 10-business day processing service for workers in certain occupations:
Skilled Trades/Professions in High Demand – if your foreign worker falls under the outline list of occupations and you plan on paying them more than the median wage in the province, then you may be eligible for an expedited LMIA.
Top 10% Wage Earners – if your foreign worker is paid at or above the top 10% of wages earned in the provinces, you may also be eligible for an expedited LMIA.
Short Duration – if your foreign worker will only be employed for under 120 days and paid above the median wage in your province, then you may be eligible for an expedited LMIA.
How Much Does LMIA Cost?
LMIA application fee is $1000 per requested position. The employer is responsible for the application fee and associated legal service costs. For example, if the employer is willing to hire 5 foreign employees, the employer would have to file 5 separate LMIA applications. They will cost the employer $5000 in application fees alone.
LMIA Advertising Requirements
To be able to hire a temporary foreign worker, you must show that you made considerable efforts to recruit domestic workers but were not able to find a suitable one. You must advertise the position for at least 4 weeks on the Government of Canada’s Job Bank website and use at least two additional recruitment methods. Employers must advertise the position to underrepresented groups like Indigenous persons, vulnerable youth, newcomers, and persons with disabilities.
Not all employers are required to receive LMIA approval to hire temporary foreign workers. The government of Canada has created several LMIA exemption codes through the International Mobility Program from which your company can benefit.
Countries with Free Trade Agreements – if your foreign worker is a citizen of a country with which Canada has an FTA, then it is likely that you will be exempt from LMIA.
Global Talent Stream – through the GTS, you can employ highly-skilled international talent, which will fall under LMIA exemption. Your worker will also receive expedited work permit processing.
CUSMA (ex-NAFTA) Countries – if your foreign employee is from the United States or Mexico, they will likely be eligible for LMIA exemption.
CETA Countries – workers in certain occupations from the European Union may be exempt from needing LMIA approval to work in Canada.
Intra-Company Transfer Program – If a foreign company has an office in Canada, then through the ICT program, they can transfer their foreign worker from overseas offices to Canada without needing an LMIA.
Facilitated LMIA for Quebec Employers – this process allows Quebec companies to bypass the advertising requirement of the LMIA process, which allows for faster processing.
Why Does Canada Use LMIA?
Canada is a very welcoming country for immigrants and foreign workers. The Temporary Foreign Worker Program is open to citizens from numerous countries to work in Canada. However, Canada is also protective of its citizens and permanent residents. Thus, the LMIA is in place to put the economic interests of the domestic workforce first, and if there are roles that cannot be filled with domestic talent, then companies can supplement by hiring foreign workers.
As a result, the advertising requirements, the transition plan, and compliance with wage requirements are all there to show the government that employers are using the Temporary Foreign Worker Program as a last resort to find a suitable workforce.
LMIA Frequently Asked Questions
Below you will find answers to the most common questions about labour market impact assessment.
Who is Eligible for LMIA?
Almost all Canadian employers can be eligible for an LMIA; however, here are some of the requirements:
- You are capable of paying your foreign workers
- Your business has a real need for foreign workers
- Your business hasn’t fired anyone in the past year
- You must have a legitimate business
- You must provide goods or services
Your requirements may vary depending on your business and long-term plans of employing international talent.
Who Will Pay for LMIA in Canada?
In most cases, the employer will cover the costs of the LMIA application and the process. In some cases, the employer will also cover the costs of securing a work permit for the foreign worker.
LMIA to Support Permanent Residency
It is possible to use LMIA Confirmation Letter to support a foreign worker’s application for permanent residency with Immigration Refugee and Citizenship Canada (IRCC).
Employers can essentially hire a foreign worker and support their permanent resident visa application simultaneously. The worker can use the Confirmation Letter with the application to Federal Skilled Worker Program (FSWP), Federal Skilled Trades Program (FSTP), and Canadian Experience Class (CEC). It is worth mentioning that the above programs would qualify skilled workers for the Express Entry permanent residence program.
How Many Points for LMIA under the Express Entry program?
For a successful LMIA application, a foreign worker can receive 50 or 200 points for specific senior positions under the Comprehensive Ranking System (CRS). These points will be applicable to foreign worker’s FSW, FST, and CEC program applications.
How Can I Get LMIA From an Employer?
If you are a foreign national and have an offer of employment from a Canadian company, you don’t need to seek an LMIA. The employer will have to apply for it and receive it.
However, workers that wish to gain permanent residency status in Canada may use the LMIA approval from their employer to support their permanent residency application.
What About Owner-Operator LMIA?
Foreign nationals can create and fill their job vacancy under Owner-Operator LMIA. It involves creating or acquiring a company or part of it in Canada. Following this, the owner-operator will have to obtain a work permit. Under Owner-Operator LMIA, the applicant must also adhere to the same requirements as employers do under the LMIA. Here’s a link to our view on the changes to the Owner-Operator LMIA program, which we suggest you read to understand this pathway better.