Canada operates the Temporary Foreign Worker Program (TFWP) to address labor shortages when qualified Canadian workers are unavailable for certain jobs. Employers looking to hire foreign workers must typically submit a Labor Market Impact Assessment (LMIA) application to the Canadian government, specifically to Employment and Social Development Canada (ESDC). The government assesses whether hiring foreign workers would positively or neutrally affect the market. This involves ensuring that no qualified Canadians were overlooked in favor of foreign workers and that foreign workers receive adequate salary and benefits as per federal and provincial standards.
The LMIA process differs depending on whether the worker is categorized as “high-wage” or “low-wage.” Low-wage workers earn below the provincial/territorial median wage, while high-wage workers earn at or above this median wage.
Employers seeking high-wage workers must include transition plans in their LMIA applications. These plans demonstrate efforts to reduce reliance on temporary foreign workers over time, such as investing in skills training or hiring Canadian apprentices. Employers may also show how they assist high-skilled temporary foreign workers in obtaining Canadian permanent residency. If selected for inspection or when applying to renew an LMIA, employers must report on the progress of their transition plans. These plans ensure that the TFWP is a last resort for addressing immediate labor needs.
Employers hiring low-wage workers do not need to submit transition plans but must adhere to specific guidelines. To limit the number of low-wage temporary foreign workers and prioritize Canadians for job opportunities, there is a cap on the proportion of low-wage workers in a business with ten or more employees. Employers offering wages below the provincial/territorial median must also provide round-trip transportation, affordable housing, private health insurance, registration with the workplace safety board, and an employer-employee contract.
The TFWP considers unemployment rates across Canada’s regions to determine eligibility for LMIA applications for low-wage/lower skilled occupations in certain sectors. Regions with unemployment rates of 6% or higher are ineligible for LMIA processing. However, applications for positions in Yellowknife, Northwest Territories, are accepted due to unique labor market conditions.
Expedited LMIA Processing:
Expedited processing with a 10-business-day service standard is available for specific occupational categories, including high-demand and high-wage occupations. This expedited service applies to skilled trades positions with wages at or above the provincial/territorial median. It also covers the highest-paid occupations in the top 10% of wages in a province or territory.
Employers seeking temporary foreign workers for short-duration positions (120 calendar days or less) with wages at or above the provincial/territorial median can also benefit from the 10-day service standard. Such positions involve equipment repairs, manufacturing, and warranty work.
Employers can be exempt from LMIA requirements in certain cases, and further details on LMIA exemptions are available.
Employers can use an LMIA to support a temporary foreign worker’s application for permanent residence under Express Entry-aligned programs. Foreign nationals aspiring to immigrate through economic class programs typically need at least one year of full-time eligible work experience.
Starting in September 2023, the Recognized Employer Pilot (REP) will be introduced, benefiting employers with a strong TFWP track record. REP offers a simplified LMIA application process, longer LMIA validity, and more advantages.
These measures aim to balance labor market needs while ensuring the fair treatment of both foreign workers and Canadian job seekers.