Labour Market Impact Assessment

As part of hiring a temporary foreign worker (TFW) in Canada, under the Temporary Foreign Worker Program (TFWP), companies must submit a request for a Labour Market Impact Assessment (LMIA) from Employment and Social Development Canada (ESDC). This document is needed to determine the impact hiring the foreign worker will have on the Canadian labour market.

In most cases, a Canadian employer wishing to hire a foreign worker must first receive government approval before the hiring can take place. The purpose of this approval is to ensure that no qualified Canadian is available to accept the job. All Canadian employers must provide evidence that they attempted to find qualified Canadian citizens or permanent residents to fill the job positions before turning to foreign workers. Employers may be inspected by government officials to ensure they have complied.

A positive LMIA will show there is a need for a foreign worker to fill the job. It will also show that no Canadian worker or permanent resident is available to do the job. Once a positive LMIA is provided, the foreign worker can apply for a work permit.

LMIAs are overseen by Employment and Social Development Canada (ESDC) and have an associated application fee of $1,000CAD for each position.

The wage being offered for the position will determine if employers need to apply for a LMIA under the stream for High Wage positions or the stream for Low Wage Positions which each have their own requirements. If you are offering a wage to the temporary foreign worker that is:

• at or above the provincial or territorial median hourly wage, you must apply under the stream for high-wage positions.
• Below the provincial or territorial median hourly wage, you must apply under the stream for low wage positions.

Hiring under the High Wage Worker Stream

A transition plan, valid for the duration of the employment of the Temporary Foreign Worker (TFW), is a mandatory requirement to hire TFWs in high-wage positions. The transition plan describes the activities the employer is agreeing to undertake to recruit retain and train Canadians and permanent residents and to reduce their reliance on the TFW program. If the employer applying for a LMIA has previously submitted a transition plan for the same position and work location, he/she must report the results of the commitments made in the previous transition plan.

Transition plans are not required for the following positions:

• Caregiver:
  • Private household employers under North American Industry Classification System (NAICS) code 8141 for caregiving positions, (specifically National Occupational Classification (NOC) codes, 31301, 32101,44100 and 44101
• Health care institutions (under two-digit NAICS 62) for caregiving positions, specifically NOC 31301, 32101 and 33102
• Position under the Seasonal Agricultural Worker Program, the Agricultural Stream and other primary agriculture occupations
• Specialized occupation that qualifies for Quebec’s facilitated Labour Market Impact Assessment process (applicable only to the first request for the same job at the same work location)
• limited duration where:
  • the job is time-limited in nature and the employment duration may range from 1 day to a maximum of 2 years
  • there is no reasonable expectation that you could transition the position to a Canadian or permanent resident
  • the job will not be filled after the departure of the temporary foreign worker as the position will no longer exist (for example, project-based occupations such as consultant for business management, specialized engineer for a dam construction project)
  • in some cases, repeat use of the specific position is the norm for the industry, but each employment duration is limited (for example, some Film and Entertainment positions, emergency repairs and warranty work)
• unique skill – skills or traits which belong to a specific individual and are not readily available in Canada (for example, NOC TEER 000 occupations, hiring by a foreign government)

Hiring under the Low Wage Worker Stream

Employers hiring under the low wage worker stream do not need to submit transition plans with their LMIA. However, as of April 30, 2022, there is a 20% cap limit on the proportion of TFWs that can be hired in low wage positions at a specific work location. The cap is to ensure that Canadians or permanent residents are considered first for available jobs.

For applications received as of April 30, 2022, the cap exemption for employers with fewer than 10 employees nationally is no longer available.

Employers (including private household employers) with a total workforce size of fewer than 10 employees across all worksites in Canada must now complete the cap for low-wage positions section of the LMIA application form. This total workforce size incudes the vacant positions required on the application.

Employers will be limited to hiring 2 TFWs (for industries with a 20% cap), or 3 TFWs (for industries with a 30% cap)

Recruitment and Advertisement

As part of the TFW program, employers must conduct recruitment efforts to hire Canadian and permanent residents before offering a job to a TFW.

Methods of recruitment

• Acceptable method of recruitment for a job advertisement include:
  • General employment websites
  • Online classified websites
  • Specialized websites which are dedicated to specific occupational profiles (e.g., accounting, marketing, biotechnology, education, engineering)
  • local, regional and national newspapers or newsletters
  • local stores, places of worship, and community resource centres
  • local, regional and provincial or territorial employment centres
  • magazines and journals (for example, national journals or magazines, professional associations magazines, specialized journals)
  • participation at job fairs
  • partnering with training institutions or offering internships
  • professional recruitment agencies
  • consultations with unions for available labour
  • advertising through professional associations
  • recruitment within the company (for example, considering internal candidates for the position). A Human Resources Plan may outline the training opportunities for existing employees, and include:
    • a list of competencies for employees
    • workshops or programs for professional development and career management
    • specific programs to target specific employees for advancement
    • If the 2 additional methods of recruitment are online, they must each have unique value and reach different audiences. In cases where you advertise on multiple websites of the same type, the combined advertisements will only be considered as one additional method of recruitment.

New Employers

Employers who have not employed a temporary foreign worker in the past 6 years prior to submitting a LMIA application will be subject to a review. The employer must demonstrate they made reasonable efforts to provide a workplace that is free of abuse and that they were not an affiliate of an employer who is ineligible for the TFW Program or in default of any amount payable in respect of an administrative monetary penalty.

A workplace that is free of abuse includes

1. (a) proactive efforts made to prevent workplace abuse
2. (b) reactive measures taken to stop abuse

An affiliate includes an employer that is controlled by another employer

1. (a) 2 employers that are under common control, or
2. (b) employers that are not operated at arm’s length