Changes in the Owner/Operator LMIA Program in Canada

Changes in the Owner/Operator LMIA Program in Canada

November 26, 2020

As many of you may have already heard, Service Canada and the IRCC are currently in the process of reviewing the policies related to the Owner/Operator LMIA program. We’re sure that this process can be confusing to follow and understand, but we’re here to break it down and highlight the key updates that you need to know!

What Service Canada Is Doing About the Owner/Operator LMIA Now?

Although the future of the program is still uncertain, here are the changes that Service Canada has already made to its standard policy for Owner-Operator LMIAs and the updated criteria they are using to assess new applications:

  • Service Canada will not consider anticipatory situations and will not issue positive LMIAs if the business is not up and running “on the ground”. Accordingly, Service Canada will not approve LMIA applications from start-up companies or franchise owners for new locations. Service Canada has emphasized that they now view being actively engaged in a business as a core requirement. This means that your business must have a physical location, employees and customers before you can apply for this program.
  • Service Canada will not issue LMIAs for NOC 00 if, at the time of the LMIA application, a company does not have senior staff/senior managers on payroll (e.g. CFO, CTO, COO). It is not enough to demonstrate an intention to hire senior staff and managers after receiving an LMIA and Work Permit approval. Service Canada will no longer be considering these anticipatory situations. These positions must already exist, be filled and be ready to be overseen by a NOC 00 applicant.

What Are The Proposed Changes To The Owner/Operator LMIA?

While these are the only 2 definitive changes to date, there are additional proposed changes to the program that may be coming:

  • Recruitment Requirements: Currently, applicants for an Owner Operator program are exempt from the LMIA advertising requirement. The proposed changes would require that potential owners make a reasonable and provable effort to hire a Canadian or permanent resident for the position that they themselves intend to fill.
  • Prevailing Wages: Currently, foreign owners of businesses are not required to pay themselves the prevailing wage for their industry and position. ESDC’s proposed changes would require that the position be advertised at the prevailing wage and, if/when foreign owners hire themselves, they must pay themselves that same wage.
  • Operational for 1 year: Currently there is no requirement for the business to be operational for 1 year before its foreign owner can apply for an Owner-Operator LMIA. The business must be active and operating at the time of the application for at least 1 year and/or the owner must be materially involved for 1 year before applying for the program.

An Unresolved Question

Another question that is still unresolved – can a foreign business owner with an Owner-Operator LMIA still transition to permanent residence? Unfortunately, there’s still no clear answer. This will be a larger policy question that ESDC plans to discuss with the IRCC.

As you can see, the future of the Owner/Operator LMIA program is still uncertain. There’s no definitive decision on how it will continue or who will be eligible to apply.

What is clear, however, is that Service Canada is doubling down on the program, reviewing its integrity and claims, whatever changes may come, they do not want to be assessing a company’s future business plans.

So where does this leave you, the business owner? What can you do to pursue your future business in Canada?

While the answer may not be black and white, there are options!

  • Use other LMIA-exempt work permit programs such as C12, C11, and T50 and provincial nominee programs aimed at business owners and entrepreneurs.
    • Clearly, there is an advantage to getting the Express Entry points immediately by going the LMIA route, but your end goal may still be within reach, if slightly farther away, through another type of Work Permit or a PNP.
  • The Owner/Operator LMIA may be looking a little different, but it’s still here! If you meet all the new requirements of the program:
    • buy an existing business that has been in operation for at least 2-3 years;
    • make sure your business has 5-6 employees and at least 2 senior managers;
    • agree to pay yourself the prevailing wage (approx. $58/hr for NOC 00); and
    • be prepared to operate your business for at least 1 year before applying for the Owner/Operator LMIA program
  • If you can meet these new requirements, then the Owner/Operator LMIA could still be a good option for you.

Contact Us For Guidance

The bottom line is, whatever path you decide to take, we will be here to see you through it.

Sobirovs Law Firm is committed to helping our clients pick the most favourable strategies through changing policies and global pandemics. We work with various Canadian organizations that attract foreign investment to many regions of Canada.

If you are determined to come to Canada through business immigration and have enough financial resources to do so, we will do our best to find the most suitable options for you. We take an extra mile for our eligible clients.

If you are feeling uncertain about your future with these proposed program changes or if have questions about what strategy may be best for you, don’t wait, contact us today! Completing a Business Assessment Form is the best next step for you!