LMIA

LMIA: Labour Market Impact Assessment

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Our Labour Market Impact Assessment (LMIA) guide is written by Matthew Iwama, a Vancouver-based Canadian Immigration Consultant with Vancouver Visa Services.

His firm specializes in the preparation of BC PNP Applications, ESDC Labour Market Opinions and Canadian work permits. 

Changes to the Temporary Foreign Worker Program

In order for most Canadian Work Permits to be issued, Canadian companies must first obtain authorization from Employment and Social Development Canada (ESDC) to provide an offer of employment to a foreign national.

Previously this authorization was known as a “Labour Market Opinion,” or “LMO.”

However, on June 20, 2014, ESDC introduced major reforms to the Temporary Foreign Worker Program (TFWP), and LMOs were re-named as “Labour Market Impact Assessments” (or LMIA). It was among a wide variety of changes to program.

The Main Issue

ESDC was of the view some Canadian companies accessing the TFWP were not taking proper measures to recruit, hire and train Canadians for their vacant positions. This was the intended route before offering jobs to foreign workers. Therefore, the TFWP was overhauled to make Canadian employers more accountable for their actions.

What Has Changed

Name

Labour Market Opinions are now known as Labour Market Impact Assessments.

Categories: Before

The TFWP was formerly divided into two categories: Higher-skilled workers and Lower-skilled workers.

Positions located in skill levels 0, A and B were placed in the Higher-skilled category. Positions located in skills levels C and D were placed in the Lower-skilled category. When applying, you simply needed to identify the position within the NOC Matrix, identify its skill level, and then lodge an application under the appropriate stream, either:

1) The Stream for Higher-Skilled Occupations

2) The Stream for Lower-Skilled Occupations

Each stream had their own special requirements. These specifically related to advertisements, travel costs for foreign workers, and the necessity to supply employment contracts.

Categories: Now

These two categories still exist. However, there are now two sub-categories within each.

1) The Stream for Higher-Skilled Occupations — High-Wage Workers

2) The Stream for Higher-Skilled Occupations — Low-Wage Workers

3) The Stream for Lower-Skilled Occupations — High-Wage Workers

4) The Stream for Lower-Skilled Occupations — Low-Wage Workers

“Higher-Skilled Occupations” still relates to the skill levels located in NOC Skill Levels 0, A and B.

“Lower-Skilled Occupations” still relates to the skill levels located in NOC Skill Levels C and D.

Positions where the prevailing wage rate, as set by ESDC, is below the provincial/territorial median wage will be considered low-wage. Those positions where the prevailing wage is at or above the provincial/territorial median wage will be considered high-wage.

Province/Territory

Wage ($/hour)

Alberta $24.23
British Columbia $21.79
Manitoba $19.00
New Brunswick $17.79
Newfoundland and Labrador $20.19
Northwest Territories $32.53
Nova Scotia $18.00
Nunavut $29.96
Ontario $21.00
Prince Edward Island $17.26
Quebec $20.00
Saskatchewan $21.63
Yukon $27.93

Therefore, when assessing which stream to follow:

1) Identify the job title’s skill level within the NOC Matrix.

2) Assess whether it is considered Higher-Skilled or Lower-Skilled.

3) Go to www.jobbank.gc.ca and click on “Wages”.

4) Under “Option A” type the name or NOC Code of the job title.

5) Locate the geographic location where the job is located.

6) Identify the “Median Wage” for that specific geographic location. This will be the “prevailing wage rate” for this specific area in this occupation.

7) Assess this prevailing wage rate against the provincial/territorial median wage listed in the chart above.

8) If the prevailing wage rate is below the provincial/territorial median wage, it is considered low-wage.

9) If the prevailing wage rate is at or above the provincial/territorial median wage rate, it is considered high-wage.

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LMIA requirements 

1) The Stream of Higher-Skilled Occupations — High-Wage Workers

Advertising:

1) National/Provincial Job Bank for at least 28 days (must remain posted until LMIA is issued)

2) Two other sources of advertising, one of which must be national in scope.

Transition Plan

Employers must now complete a detailed transition plan (to be explained in the next section).

 

2) The Stream for Higher-Skilled Occupations — Low-Wage Workers

Advertising:

1) National/Provincial Job Bank for at least 28 days (must remain posted until LMIA is issued).

2) Two other sources of advertising, one of which must be national in scope.

Cap on Low-Wage Temporary Foreign Workers

Employers with 10 or more employees applying for a new LMIA under this stream are subject to a cap. This is 10pc of TFWs who may be employed at that worksite (to be explained below).

 

3) The Stream of Lower-Skilled Occupations – High-Wage Workers

Advertising:

1) National/Provincial Job Bank for at least 28 days (must remain posted until LMIA is issued).

2) Two other sources of advertising, one of which must target under-represented groups.

Transition Plan

Employers must now complete a detailed transition plan (to be explained in the next section).

 

4) The Stream of Lower-Skilled Occupations – Low-Wage Workers

Advertising:

1) National/Provincial Job Bank for at least 28 days (must remain posted until LMIA is issued).

2) Two other sources of advertising, one of which must target under-represented groups.

Cap on Low-Wage Temporary Foreign Workers

Employers with 10 or more employees applying for a new LMIA under this stream are subject to a cap of 10 percent of TFWs who may be employed at that worksite (to be explained below).

 

Employer transition plans

ESDC expects that employers are taking adequate steps to reduce their reliance on temporary foreign workers over time. Employers are expected to proactively engage in activities to recruit, hire and train Canadians.

ESDC is now requiring employers to undertake five activities in addition to the existing recruitment and advertising requirements. These include:

1) Three additional recruitment activities.

2) One additional activity targeting under-represented groups (new immigrants, aboriginal people, youth, Canadians with disabilities).

3) One activity to help temporary foreign workers transition to permanent residence (such as providing them with permanent job offers).

Employers will be required to prepare projected estimates of the numbers of Canadians/permanent residents they expect to recruit through these activities. They will also need to supply proposed timelines/timeframes for the activities outlined.

Lastly, employers will be required to report back to ESDC with the results of the activities they implemented as part of their transition plan. The results will be compared to their submitted projections and will be evaluated if the employer is audited or seeks to re-apply for a LMIA in the future.

*Employers can request an exemption from the requirement to submit a transition plan if they can prove that the position being applied for requires a unique skill set or is contract/project-based.

 

Cap on low-wage temporary foreign workers

Employers with 10 or more employees applying for a new LMIA are subject to a cap of 10 percent of TFWs who may be employed in low-wage positions. ESDC is providing employers with a 3-year transition period to allow adjustment to this new cap.

Some employers will currently have a low-wage temporary foreign workforce that is above the cap. When applying for a new LMIA, they will be limited at 30pc, or frozen at their current level, whichever is lower. This percentage will be further reduced to 20pc beginning July 1, 2015, and reduced again to 10pc on July 1, 2016.

*TFWs currently employed at work sites over the cap will be allowed to continue working at those sites until their existing work permits expire.

Refusing applications in areas of high unemployment 

ESDC will no longer process LMIA applications in the Accommodation, Food Services and Retail Trade sectors for certain positions with an unemployment rate at or above 6pc.

ESDC will not process applications in these NOC Codes:

NOC Code

NOC 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

If the economic region for where the LMIA is being applied for has an unemployment rate at or above 6pc. The regional unemployment rates can be found here.

 

Reducing work permit durations 

For all low-wage positions, the duration of work permits set out in LMIAs will be limited to a maximum of one year.

10-day Processing for Highest-Demand, Highest-Paid and Shortest-Duration Occupations

LMIAs for highest-demand occupations (skilled trades), highest-paid (top 10pc) occupations or short-duration work periods (120 days or less) will now be provided within a 10-business-day service standard.

 

Highest-demand occupations list:

The 10-day service standard will be limited to the skilled trades where the prevailing wage rate is at or above the provincial/territorial median wage. The list of qualifying skilled trades can be found here.

 

Highest-paid occupations:

If the prevailing wage rate for an occupation is above the figure indicated below for the province in which the LMIA is being applied for, the application will be assessed in 10 business days or less:

Province/Territory

Wage ($/hour)

Alberta $48.08
British Columbia $41.21
Manitoba $38.46
New Brunswick $36.06
Newfoundland and Labrador $42.00
Northwest Territories $52.00
Nova Scotia $37.65
Nunavut $51.83
Ontario $45.00
Prince Edward Island $35.00
Quebec $38.71
Saskatchewan $43.00
Yukon $43.27

 

Shortest-duration occupations

The 10-day service standard will be available for employers seeking to hire temporary foreign workers for a duration of 120 calendar days and where the prevailing wage rate for the occupation is at or above the provincial or territorial median wage.

 

LMIA application fee increase

For every job position being requested, employers will have to pay a $1,000 CAD application fee. This is not per application, but per position. Therefore, if the LMIA application is requesting 10 positions, the application fees due would be $10,000CAD.

 

How does this affect employers?

1. Employers will now be held accountable for the “promises” that they make in their applications. Particular focus will be on the proposed activities in their transition plans. ESDC will be following up with employers through audits. They will also examine submitting results if the employers choose to re-apply.

2. Things just got expensive. Prior to 2013, it cost employers nothing to apply for LMOs. A $275 application fee was introduced initially, and now the fee has more than tripled. ESDC wants employers to carefully consider the amount of temporary foreign workers they seek to employ. That’s the reason behind this costly barrier to entry.

3. Employers in the accommodation and food service sectors are the hardest hit by the imposed workplace caps. They will now be forced to lay-off a large percentage of their workforce to comply with the new caps when their current TFW’s work permits expire.

4. It’s just a lot more work. LMIA applications are now very detailed and require lots of additional documentation and statistical tabulation. Examples include a numerical breakdown of the number of Canadian applicants for the position, the number of offers of employment made, the number of unqualified applicants, etc. Also, employers must now provide a written description of why each un-hired Canadian was not qualified or suited for the job.

 

How does this affect job seekers?

1. Employers will now be very reluctant to undergo the LMIA process for applicants whose situations are marginal. These situations include:

  • Working Holiday Visa Holders seeking to remain on staff with their current employer at the end of their visa.
  • Post-graduation work permit holders seeking to remain on staff with their current employer at the end of their visa.
  • Open-Work Permit holders seeking to remain on staff with their current employer at the end of their visa.

2. Even if LMIAs are issued, the maximum duration that they can stay and work is now shortened.

 

Communication is key

People ask me all the time why they should hire a professional to prepare their application for an LMIA. I answer, “You must be able to clearly articulate your business challenges to Service Canada as well as manage a lot of detail. If you don’t feel comfortable doing that, you should hire a professional.”

There’s no gaming of the system, there are no “tricks of the trade,” and there is no secret formula to obtaining a positive LMIA.

It’s all about following detailed guidelines, paying attention to the minutiae and providing a clearly articulated position to Service Canada. Most Program Officers are well-educated, reasonable people and understand the wide majority of industries across Canada.

They base their decisions on internal labour market indicators as well as the information submitted by the employer. When these two things correctly intersect, they will issue a positive LMIA.

Program Officers take a hard stance, as they should, on employers trying to circumvent the system. They don’t take kindly to those who are being dishonest and fraudulent about their recruitment efforts.

Successful LMIA applications are detailed, logical and well-articulated pieces of business communication; they are not just a stack of application forms and a few Craigslist job postings.

It is the duty of the employer, or their representative, to explain clearly to the presiding officer:

1) What means they have taken to recruit or train Canadians

2) Why they have had difficulty recruiting Canadians

3) What their plan is to train Canadians so as to not become reliant upon the use of temporary foreign workers

4) The ways in which the Canadian labour market would benefit from the hiring of temporary foreign workers through the filling of labour shortages, transfer of skills, job creation etc.

5) The intention of the employer to abide by all applicable Canadian labour laws as they relate to hiring foreign workers

Obtaining a positive LMIA takes a keen attention to detail and an extensive amount of work. By ensuring that guidelines are followed carefully and making a clear position to the Program Officer, the chance of receiving a favorable result will be greatly increased.

 

Conclusion

ESDC is taking the position that the TFWP is to be used only as a last resort for Canadian employers seeking to fill immediate, acute labour shortages in high-demand positions or for very specific projects. The TFWP is not to be used as a business model. Some Canadian employers have effectively “locked-down” TFWs for a two-year period at a fixed wage, creating stability in the workplace.

Moving forward, fewer employers will be applying for LMIAs, and they will be more difficult to obtain than before. ESDC’s position is that LMIAs are to be issued for temporary situations and not as a means of creating low-cost stability within the job market.

Please also refer to the Government of Canada page about LMIA.

If you are seeking further consultation about the new LMIA changes or would simply like a professional firm to handle the entire process for you, see our Canada Immigration Advice page.

Further help

To learn more about permanent residency, read our guide Express Entry: The Basics.

Looking for construction or engineering work? We’ve recently rebranded the Moving2Canada Recruitment agency under the name Outpost Recruitment.

Written by Matthew Iwama, Vancouver-based Canadian Immigration Consultant with Vancouver Visa Services. They’re a firm specializing in the preparation of BC PNP Applications, ESDC Labour Market Opinions and Canadian work permits.

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