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A Labour Market Impact Assessment (LMIA) is a document required by Canadian employers seeking to hire foreign workers. Employers need to apply for an LMIA, providing detailed information about the job, the skills required, and their efforts to find a Canadian worker. Employment and Social Development Canada (ESDC) reviews the application and assesses whether the employer has met the requirements for an LMIA. If the application is approved, the employer receives an LMIA, which they can then use to apply for a work permit for the foreign worker. The foreign worker can then apply for a work permit based on the approved LMIA. 

 

The LMIA process is different depending on whether the targeted employee is classified as “high-wage” or “low-wage.” For example, temporary foreign workers being paid under the provincial/territorial median wage are considered low-wage, while those being paid at or above are considered high-wage. In addition, certain specific provisions apply depending on whether a prospective employee is classified as high-wage or low-wage.

High-Wage Workers

According to IRCC guidelines, employers intending to hire high-wage temporary foreign workers must submit a transition plan as part of their Labour Market Impact Assessment (LMIA) application. This requirement ensures that employers are actively working to reduce their dependency on the Temporary Foreign Worker Program over time. A high-wage position is defined as one that offers an hourly wage above the median for the occupation in a given region.

 

These transition plans support the overarching objective of the TFWP, which is to ensure the program is used only as a last and limited resort. Employers must demonstrate that they are addressing short-term labour shortages only when qualified Canadians or permanent residents are unavailable, thereby safeguarding job opportunities for the domestic workforce.

Low-Wage Workers

For employers hiring low-wage temporary foreign workers—those earning below the regional or provincial median wage—IRCC does not require a transition plan with the LMIA application. However, such employers must comply with a distinct set of rules to ensure that the program remains focused on protecting the Canadian labor market.

 

To limit reliance on the TFWP and prioritize Canadian job seekers, the Government of Canada has implemented a cap on the number of low-wage foreign workers that an employer can hire. Specifically, businesses with 10 or more employees applying for a new LMIA are restricted to a 10% cap on their workforce composed of low-wage temporary foreign workers. This cap was gradually introduced between 2015 and 2016 to give employers time to transition.

 

Employers offering below-median wages must also meet specific conditions, including:

– Covering round-trip transportation costs for the foreign worker;

– Ensuring affordable housing is available;

– Providing private health insurance until public coverage is accessible;

– Registering the worker with the provincial/territorial workplace safety board; and

– Entering into a formal employer-employee contract.

 

Hiring a Temporary Foreign Worker in Canada: Requirements

Employers seeking to hire a temporary foreign worker in Canada must pay a processing fee of CAD $1,000 for each Labour Market Impact Assessment (LMIA) application. In addition, a CAD $100 privilege fee is charged by Employment and Social Development Canada (ESDC).

 

For both LMIA applications and job advertisements, only English or French may be specified as language requirements—unless the employer can clearly justify the necessity of another language for the role.

 

Before submitting an LMIA application, employers are required to advertise the job opening across the Canadian labour market for a minimum of four weeks. During this period, employers must:

– Post the vacancy on the Canada Job Bank, and

– Use at least two additional recruitment methods to reach a broader audience.

 

To support diversity and inclusion, employers should also prioritize advertising to underrepresented groups, such as Indigenous peoples and persons with disabilities.

For high-wage positions, employers must submit a transition plan alongside the LMIA application. This plan should outline how the organization intends to reduce its dependency on temporary foreign workers over time. Acceptable strategies include:

 

– Investing in training programs for Canadian workers

– Hiring apprentices, or

– Supporting temporary foreign workers in obtaining permanent residency in Canada

 

If selected for an inspection or when renewing an LMIA, employers must demonstrate progress made on their transition plan.

 

Finally, employers must attest that they will not lay off or reduce the working hours of Canadian employees in the same role(s) as the temporary foreign worker(s) being hired.

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