A Labour Market Impact Assessment (LMIA) is an application that most employers will have to submit if they want to hire temporary foreign workers (TFWs) through the Temporary Foreign Worker Program (TFWP).
The purpose of an LMIA is for an employer to prove two things to the federal government:
That they are experiencing a labour or skill shortage.
That there are not enough qualified Canadians and permanent residents to fill that shortage.
Employers often turn to the TFWP if they are in a rural community that does not have a large enough population to support local seasonal businesses (such as agriculture, hospitality or seafood processing), or if they need people with highly specialized skills (like trades).
Essentially, the TFWP should be a last resort. Employers need to prove that they are struggling to fill their staffing needs and that they first tried to find, recruit and hire Canadians and permanent residents.
Completing and submitting an LMIA can be a long, complicated process. It is highly regulated and closely monitored to ensure that the program is not being abused and that any foreign workers who are hired are going to be treated fairly.
As of Spring 2023, LMIAs are submitted through an online portal. It requires significant amounts of information and documents, which could include the following:
Business legitimacy documents
Payroll information
Labour market research
Business operations data
A formal job offer
Housing information
Provincial registration documents
Employment and Social Development Canada (ESDC), via Service Canada, is responsible for assessing, approving and regulating LMIAs.
Once the LMIA has been submitted through the portal, it will enter the triage stage and Service Canada will do a basic review for completeness. If the application is incomplete, they will close the file and you will have to resubmit. Once it’s considered complete, Service Canada will request the processing fee, which is $1000 per spot.
This means that, for example, if you submitted an LMIA requesting to hire 5 people as construction workers the processing fee would be $5000 total (no tax).
After the fee is paid, it enters the queue for assessment. Depending on the time of year, the location and the industry, the wait can be anywhere from a couple weeks to a couple months.
During the assessment, the officer assigned to the case may reach out with potential issues or questions. Most problems (whether they’re typos, mistakes or misunderstandings) can be fixed at this stage without the risk of the application being rejected. The officer will also conduct an employer interview to verify that the information provided in the LMIA is correct.
Once the LMIA is approved, it is valid for 6 months after the date of approval. This means an employer has 6 months to fill every spot on the LMIA; any spots that are unused by the time it expires are forfeit and there will be no refund of the processing fee.
A valid LMIA can be used to support work permit applications for temporary foreign workers. Once a work permit application has been submitted using an LMIA, that spot is considered taken. Each spot can only be used once, even if the work permit is rejected.
An important thing to remember when an employer submits an LMIA is that they are committing themselves to certain standards and responsibilities towards any TFWs they might hire. By signing and submitting this application, they are promising the federal government that they will meet the legal requirements of the program, as well as basic labour laws. Employers found in non-compliance face serious penalties.
LMIAs can be a valuable solution for employers who are facing potentially devastating labour or skill shortages. This is only a brief overview of LMIAs, so for more information please see the immigration programs section of our website, or reach out to book a free consultation!
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