Despite the challenges with the Temporary Foreign Worker Program’s Labour Market Impact Assessment (LMIA), LMIAs remain a legitimate way to hire or retain foreign nationals for many employers. It is a last-resort option for employers facing a critical labour shortage, and success depends on understanding the program requirements, the application process, timelines and compliance. This article explains the essentials and offers 10 tips for navigating the application process.
Basics: What Is an LMIA?
An LMIA is an approval from Employment and Social Development Canada (ESDC) that allows an employer to hire a foreign national on an employer-specific work permit. You must show through rigorous recruitment that no qualified Canadians or permanent residents (PRs) are available for the job. An ESDC officer must be satisfied that hiring a foreign worker will have a neutral or positive effect on the Canadian labour market.
High-Wage vs. Low-Wage Streams
Each province and territory has a wage threshold set at 20% above its median wage. Positions paying at or above that threshold fall under the high-wage stream; positions paying below it fall under the low-wage stream.
At the time of writing, British Columbia’s threshold is $38.40/hour, with the next update expected in summer 2027. The requirements differ by stream. Most hospitality positions for which an LMIA is considered fall under the low-wage stream.
Preparing for an LMIA
1. Job Bank: The employer needs an online Job Bank account linked to the Canada Revenue Agency (CRA) payroll account that will be used to pay the foreign national on an LMIA. Because setup can take time, complete this step first. Tips to set up and manage the Job Bank and your job posting through the portal will be shared in an upcoming article.
2. BC Temporary Foreign Worker Certificate: Employers operating in BC must have a valid BC TFW Certificate before applying for an LMIA and hiring a foreign worker. By applying for the certificate, employers agree to abide by the Temporary Foreign Worker Protection Act and employment standards, meet WorkSafeBC requirements, and communicate to foreign workers their rights under the law. Employers who intend to keep using the LMIA program should renew their certificate at least eight weeks before it expires. Check the processing times in advance so your LMIA submission is not delayed due to an expired or pending certificate!
3. Get the Job Advertisement Right: Get the job advertisement right, both for your business and for the LMIA. Don’t tailor it to the foreign worker you want to hire or retain. Write it for the actual role and to attract as many Canadians and PRs as possible. The advertisement requirements are strict, and you need to get the posting right from the beginning. Keep all job posting details consistent across every recruitment platform.
Reminder: For low-wage LMIAs, employers must directly target youth in their recruitment, in addition to Job Bank and two different underrepresented groups.
4. Choose the Right NOC: Determine the corresponding National Occupational Classification (NOC) for the position upfront when you draft the job posting. Employment requirements don’t need to mirror the NOC exactly, but they must be reasonable in comparison. You can’t ask for a bachelor’s degree when the NOC calls for high school unless you can justify it to an officer. A wrong NOC isn’t always fatal. The LMIA can still be approved if the job requirements fit the corrected NOC and you meet its prevailing wage.
Employer Compliance Reminder: Employers can make minor modifications to an LMIA worker’s position, but the position must remain within the same NOC as the LMIA approval. Otherwise, a new LMIA is usually required.
5. Wage Determination Can Be Complicated: Employers may use salary bands or have a wage in mind for the position without realizing the TFWP program has its own wage rules. Employers must pay the prevailing wage for the NOC and the region of employment. The prevailing wage is the higher of either (a) the median hourly wage for the occupation and location on Job Bank or (b) the wage you currently pay staff in the same position with similar skills and experience. You cannot include tips as part of your wage calculation.
ESDC may refuse an LMIA if the wage is substantially higher than the prevailing wage. An employer desperate to fill a key role and willing to offer more than the prevailing wage may need to reconsider an LMIA.
Employer Compliance Reminder: Once hired, you are required to review the prevailing wage every January for your LMIA workers and raise their wages to match if it has increased.
6. Low-Wage Cap: The low-wage cap calculator seems simple, until you start answering the application form’s questions. This is especially the case for hospitality employers whose staffing numbers fluctuate with the season or have high turnover. ESDC has maintained a 10% cap on the proportion of low-wage workers at a location. Exemptions exist, one of which is the hiring of seasonal workers. That can be useful for hospitality, provided that the industry and the position itself are seasonal.
BC opted in to a temporary measure until March 31, 2027. BC employers in rural work locations outside of the Census Metropolitan Areas (CMAs) can retain their current proportion of low-wage positions if it is above the 10% cap.
7. Refusal to Process for Low-Wage LMIAs: Canada introduced the refusal to process a low-wage LMIA in work locations where the unemployment rate is 6% or higher. Not all employers are affected, as some work locations are outside of the Census Metropolitan Areas (CMAs). Unemployment rates are updated every three months. If you are thinking of doing an LMIA, plan ahead so you are ready to start recruiting immediately if the rate falls below 6% in your CMA.
8. Prepare for the Interview with ESDC: Interviews are currently required before a decision is rendered. Your authorized representative can support you on the call, but the officer wants answers from the employer directly. ESDC can access your Direct Apply resumes, so know what happened with each candidate.
Employer Compliance Reminder: Employers cannot charge or recover any LMIA-related costs from a foreign national. You may be asked to confirm this hasn’t happened during the interview.
9. Reminder: The Work Permit! If the foreign worker is in Canada on a work permit that is due to expire, IRCC will hold a work permit extension and/or change of conditions for a period of 90 days after the work permit application was submitted if the foreign worker can prove the LMIA was submitted and a decision has not yet been made. However, there are specific requirements and instructions that must be followed.
10. Timing and Accuracy Are Everything: There’s no way to sugarcoat it. LMIAs are tedious and time-consuming, and the three-month window to recruit, prepare and submit your application is short. After submission, an employer may wait up to six months for a decision. Communicating with the foreign national is critical so they can take the necessary steps for the work permit application or have a plan B ready.
Final Thoughts
A successful LMIA comes down to preparation, consistency, and genuine recruitment. Start early, keep records, and know your own file. And if you’re unsure at any point, get advice before you start the process, not after a refusal.
For a full understanding of the requirements and application process, review ESDC’s Temporary Foreign Worker Program Requirements or contact Bell Alliance LLP or another licensed professional.