Labour Market Impact Assessment Explained (LMIA)

Labour Market Impact Assessment Explained (LMIA)

The Canadian immigration system is one of the most complicated in the world. Depending on your intended immigration pathway you are likely to encounter various applications, assessments, and even interviews by the Canadian immigration authorities and relevant government offices. This page will prepare you to better understand one of the most important parts of immigration to Canada – the Labour Market Impact Assessment and the process of obtaining it.

What is an LMIA in Canada?

LMIA stands for Labour Market Impact Assessment. It is a form of assessment that is used by the Canadian government. 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, it is likely that the employer will be given a positive LMIA and be able to offer the job to a foreign national.

Employment and Social Development Canada (ESDC) will evaluate the job offer and the employer’s application for an LMIA. 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

Who is LMIA for?

LMIA is not for everyone. In fact, there are various business immigration options that do not require LMIA. However, LMIA can be a mandatory requirement for some employers and an optional feature for some foreign nationals.

For Employers

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.

In addition, you might also need to submit a Transition Plan with your LMIA application. The Transition Plan outlines the employer’s measurable commitments to help the foreign employee to transition into the domestic workforce during their employment with the Canadian employer.

This requirement depends on the wage or salary of your foreign worker:

High-Wage Workers

If you are planning on employing a high-wage foreign worker then you are required to present the Transition Plan with your LMIA application.

Low-Wage Workers

If you are planning on employing a low-wage foreign worker then you are not required to submit the Transition Plan.

For Foreign Workers

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 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. 

LMIA Eligibility

Upon receipt of the LMIA application, ESDC will take into account 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 are 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 type of worker the employer intends to hire. This adjustment to LMIA requirements is very important and the employer must refer to them in order 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, during high application seasons, ESDC can take a few months to respond to your application. So, the 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.

Your employer will fall under the 10-business day standard service if their LMIA application falls under:

  • Professions in high demand
  • Top 10% salary in the province of the employment offer
  • Employment under 120 days

LMIA Costs

LMIA application costs $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. This will cost the employer $5000 in application fees alone.

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 at the same time. 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 points or 200 points for specific senior positions under the Comprehensive Ranking System (CRS). These points will be applicable to worker’s FSW, FST, and CEC program applications.

Owner-Operator LMIA

Foreign nationals can create and fill their own job vacancy under Owner-Operator LMIA. This involves the creation or acquisition of a company or part of it in Canada. Following which 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 that you read to better understand this pathway.