Labour Market Impact Assessment (LMIA)

The labour market test that allows employers to bring temporary foreign workers to Canada is being transformed from a Labour Market Opinion (LMO) to a new Labour Market Impact Assessment (LMIA) process that is more comprehensive and rigorous.

Employers must provide additional information, including the number of Canadians that applied for their available job, the number of Canadians the employer interviewed, and explain why those Canadians were not hired. Employers must now also attest they are aware of the rule that Canadians cannot be laid-off or have their hours reduced at a work site that employs temporary foreign workers.

New and better sources of labour market information will be used to determine if there are Canadians who could fill these positions. Sourcing the very best Labour Market Information to include in an LMIA Application is critical to that application being successful and leading to a positive LMIA opinion, issued by Service Canada. You must know how to prove statistically that your Company requires additional foreign workers to make up skills shortages.

LMIAs are conducted and processed by Employment and Social Development Canada (ESDC). ESDC will refuse to process applications when there are concerns that temporary foreign workers may or will have a significant negative effect on the Canadian labour market.

Cap on Low-Wage Temporary Foreign Workers

The Temporary Foreign Worker Program (TFWP) was created as a last and limited resort to allow employers to bring foreign workers to Canada on a temporary basis to fill jobs for which qualified Canadians are not available. However, since there was no specific limit on the number of temporary foreign workers that a company could hire, over time many employers built their business model on the program.

Employers with 10 or more employees will be subject to a cap of 10 percent on the proportion of their workforce that can consist of low-wage temporary foreign workers.

This cap will be applied per worksite of an employer and is based on total hours worked at that worksite.

To provide employers time to transition and adjust to this new cap, it will be phased in over the next couple of years.

Effective immediately, employers applying for a new LMIA will be limited at 30 percent or frozen at their current level, whichever is lower. This transition measure will be further reduced to 20 percent beginning July 1, 2015 and reduced again to 10 percent on July 1, 2016. The Government may consider lowering the cap further in the future. Temporary foreign workers currently working at work sites over the cap will be allowed to continue working at those sites until their existing work permits expire.

This ensures that large employers with multiple locations cannot be over their limit for low-wage temporary foreign workers at any one of their locations. For example, a large employer with an overall national workforce comprised of 5 percent temporary foreign workers cannot justify bringing in larger volumes of foreign workers at specific locations and having the temporary foreign worker staff at those locations exceed the cap.

Refusing Applications in Areas of High Unemployment

Effective immediately, Employment and Social Development Canada will refuse to process certain Labour Market Impact Assessment applications in the Accommodation, Food Services and Retail Trade sectors.

Specifically, any applications for positions that require little or no education or training will not be processed in economic regions with an unemployment rate at or above six percent.

Employer applications will not be processed if they meet all of the following criteria:

Applying for an LMIA in a Statistics Canada economic region with an annual unemployment rate over 6%;

Seeking an LMIA in a specific occupation identified under North American Industry Classification System as Accommodations & Food Service or Retail Sales (NAIC 72, 44, 45); and

Seeking an LMIA in an occupation in one of the selected National Occupational Classification Codes (see below table) skill level “D” occupations.

NOC Code NOC4 Title
6641 Food Counter Attendants, Kitchen Helpers and Related Occupations
6661 Light Duty Cleaners
6611 Cashiers
6622 Grocery Clerks and Store Shelf Stockers
7611 Construction Trades Helpers and Labourers
8612 Landscaping and Grounds Maintenance Labourers
6672 Other Attendants in Accommodation and Travel
6663 Janitors, Caretakers and Building Superintendents
6662 Specialized Cleaners
6651 Security Guards and Related Occupations

The labour market information used to identify unemployment rates in economic regions is based on annual data from the Labour Force Survey (LFS) from Statistics Canada and will be posted on the Temporary Foreign Worker Program website.

Reducing the Duration of Work Permits set out in Labour Market Impact Assessments

Effective immediately, the duration of work permits set out in Labour Market Impact Assessments (LMIAs) will be limited to a maximum of one year for all low-wage positions, rather than the 2 year duration that existed previously. Employers of low-wage temporary foreign workers must reapply every year for an LMIA, better-accommodating for changes in labour market conditions that might have occurred.

Reducing the Length of Time a Temporary Foreign Worker can Work in Canada

To ensure foreign workers are coming in on a truly temporary basis and that the program is used as a last and limited resort, and to encourage employers to make even greater efforts to hire and train Canadian workers before seeking temporary foreign workers, the Government will reduce how long a temporary foreign worker in the low-wage stream can work in Canada. This measure will not apply to temporary foreign workers currently in Canada on valid work permits.

Transition Plans for High-Wage Positions

Employers who want to hire temporary foreign workers in high-wage occupations will be required (with limited exceptions) to submit transition plans with their Labour Market Impact Assessment (LMIA) application to ensure that they are taking steps to reduce their reliance on temporary foreign workers over time. Essentially, a business proposal must be written that outlines the company’s current objectives and it’s measures that it is currently putting in place to reduce the reliance on the TFWP, which must be detailed and involves statistical projections and financial information that must be transparent and is open to potential audit by the Federal Government.

This underscores the purpose of the program — which is to operate as a last and limited resort to address immediate labour needs on a temporary basis when qualified Canadians are not available.

Highest-Demand, Highest-Paid and Shortest-Duration Occupations

LMIAs for highest-demand occupations (skilled trades), highest-paid (top 10 percent) occupations or short-duration work periods (120 days or less) will now be provided within a 10-business-day service standard. As is the case for all requests to hire temporary foreign workers, LMIAs would only be granted after a rigorous review of all of the elements of the employer’s application in each of these cases. This service standard will be met by processing these applications first, not by reducing the thoroughness of these LMIAs.

Initially, the 10-day service standard for highest-demand occupations will be limited to the skilled trades where the wage offered is at or above the provincial/territorial median wage.

Positions in the skilled trades are essential to the development of major infrastructure and natural resource extraction projects, which are vital to Canada’s economic growth. Over time, other occupations may be added based on evidence from more and better labour market information.

For an Individual or Company Assessment on your ability to qualify for an LMIA, please Book a Consultation to review your corporate or individual situation.

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