What is the Labour Market Impact Assessment?

The Canadian employers, looking to hiring a foreign worker, may need a Labour Market Impact Assessment.

The purpose of a Labour Market Impact Assessment (LMIA) is to make sure that the hiring of a foreign worker will have a positive or neutral effect on the Canadian labour force.

The Temporary Foreign Worker Program (TFWP) is a way the Canadian government supplements its workforce when there are not enough qualified workers in Canada to do a job. If you are an employer and are looking to hire a foreign worker, you may need to submit an LMIA. The application will be reviewed by Employment and Social Development Canada (ESDC), and officials will need to determine that no qualified Canadians are being overlooked in favour of the foreign worker. The employer will need to show that they have attempted to find qualified Canadians to fill the position before they try to hire from abroad. In addition, they must provide salary and benefits that meet provincial and federal standards. Each request for an LMIA will cost $1,000 CAD per position.

It is important to note that as an employer, you must advertise the job vacancy for at least four weeks before applying for a LMIA. The employer must prove that they have used at least two other recruitment methods on top of posting an advertisement on the Canada Job Bank. Furthermore, employers should focus on advertising to underrepresented groups, such as First Nations and people with disabilities. English and French are the only languages that can be publicized as job requirements, unless they employer can prove another language is required.

The LMIA process depends on whether the foreign worker is classified as “high-wage” or “low-wage”. If the employee is being paid under the provincial/territorial median wage they are considered low wage, and if they are being paid at or above the median, they are considered high wage.

Province/Territory Median hourly wages as of April 30, 2022 (2019 Wage)
Alberta $28.85
British Columbia $26.44
Manitoba $23.00
New Brunswick $21.79
Newfoundland and Labrador $24.29
Northwest Territories $37.30
Nova Scotia $22.00
Nunavut $36.00
Ontario $26.06
Prince Edward Island $21.63
Quebec $25.00
Saskatchewan $25.96
Yukon $32.00

If you are hiring a high-wage worker

If you are looking to hire a high-wage worker, you must submit transition plans along with the LMIA. A transition plan is a plan that ensures you are taking the steps as an employer to reduce your reliance on foreign workers over time.

Transition plans are intended to ensure that employers seeking foreign workers are fulfilling the purpose of the program, meaning they are using the program as a last and limited resort to respond to immediate labour needs on a temporary basis when Canadians are not available to do the job. This ensures that qualified Canadians are given priority for available jobs.

Examples of ways in which an employer can prove this is by showing proof of investment in skills training, proof of assisting the foreign worker in becoming a permanent resident or hiring Canadian apprentices.

If you are hiring a low-wage worker

If you are looking to hire a low-wage worker, you do not need to submit transition plans along with the LMIA.

Instead, the Government of Canada has put a cap on the number of low-wage temporary foreign workers that a business can employ in order to restrict access to the TFWP. Therefore, employers with 10 or more employees applying for a new LMIA are subject to a cap of 20 percent of the proportion of their workforce that consist of low-wage temporary foreign workers.

If you are an employer offering a wage that is below the provincial/territorial median, you must:

  • Pay for round-trip transportation for the temporary foreign worker
  • Ensure affordable housing is available
  • Pay for private health insurance until workers are eligible for provincial health coverage
  • Register the temporary foreign worker with the provincial/territorial workplace safety board; and
  • Provide an employer-employee contract.

Global Talent Stream

The Global Talent Stream is part of the TFWP and is designed to help Canadian employers fast-track the hiring of foreign tech talent. The processing time of a Global Talent Stream application has a service standard of 10 business days from the day after the application is received by ESDC, and the work permit can be processed in two weeks by Immigration, Refugees and Citizenship Canada (IRCC). This service standard is expected to be met 80% of the time.

There are two categories under the Global Talent Stream. Category A includes high growth companies that demonstrate a need to hire unique specialized talent from abroad. Employers in this category must be referred to the Global Talent Stream by a designated referral partner. Category B is for employers looking to hire unique talent for occupations found on the Global Talent Occupations List, which consists of occupations that are determined to be in-demand and which there is a deficient domestic labor supply.

Employers in both categories must meet the payment requirements for skilled workers, meaning they must pay the employee the prevailing wage or higher. The prevailing wage is the highest figure of either:

  • The median wage for the occupation on the Government of Canada’s Job Bank
  • The wage within the range an employer pays current employees in the same position at the same location, with the same skills and experience.
  • The minimum wage floor as defined in the Global Talent Occupations List (if applicable).

Facilitated LMIAs

The facilitated LMIA process in Quebec helps employers address labour shortages by allowing Quebec employers to hire foreign workers more quickly. Under the facilitated process, occupations are listed in which labour shortages are proven, so Quebec employers are not required to advertise the position for which they are hiring foreign workers or provide evidence of recruitment efforts.

The employer is required to prove the following:

  • That the foreign worker meets the educational and experience requirements of the job and the requirements of the National Occupational Classification;
  • That the hourly wage offered to temporary foreign workers is consistent with the wage rate paid to Canadians and permanent residents, working in the same occupation and geographic area.
  • A transition plan is required for all high wage LMIA applications. However, under the facilitated process in Quebec, a transition plan is only required for the second or subsequent application for an LMIA in the same occupation and location.