Canada has made several substantial adjustments to its Labour Market Impact Assessment (LMIA) process in the last few months.
These changes are designed to balance the country’s labor market needs, promote fair treatment of foreign workers, and prioritize job opportunities for Canadian citizens and permanent residents.
This article will summarize the most recent updates, effective dates, and their potential impacts on both employers and foreign workers.
1. Increased Wage Threshold for High-Wage Stream
Effective Date: November 8, 2024
One of the most notable changes is the increase in the minimum hourly wage requirement for positions under the high-wage stream.
Key points:
Employers must now offer at least 20% above the median hourly wage for their respective province or territory.
This adjustment ensures that high-wage foreign workers are compensated competitively, protecting both domestic and foreign workers.
Example:
| Province/Territory | Median Hourly Wage (2024) | Required Minimum Wage (20% Above Median) |
|---|---|---|
| Ontario | $28.39 | $34.07 |
| British Columbia | $30.00 | $36.00 |
| Alberta | $29.80 | $35.76 |
This change is made to motivate employers to hire Canadian workers first, making the hiring of foreign workers a planned decision rather than a way to save money by hiring cheaper labor.
2. Stricter Caps on Low-Wage Positions
Effective Date: September 26, 2024
To prevent over-reliance on temporary foreign workers in low-wage roles, the maximum percentage of a company’s workforce that can be filled through the low-wage stream has been reduced from 20% to 10%.
This cap is designed to create more opportunities for Canadian citizens and permanent residents while still allowing for essential positions to be filled by temporary workers.
Exemptions: Certain sectors facing acute labor shortages, such as agriculture, food processing, construction, and healthcare, may maintain higher caps due to their critical need for labour.
3. Reduced Employment Duration for Low-Wage Positions
Effective Date: September 26, 2024
On September 26, 2024, IRCC limits the maximum duration of employment for low-wage temporary foreign workers from two years to one year.
The reduction in duration emphasizes the expectation for employers to develop longer-term solutions for workforce needs, such as investing in training for local talent or improving retention strategies.
Impact: This adjustment pushes businesses to explore sustainable workforce management and mitigates long-term dependency on temporary foreign labor.
Employers will need to plan more strategically for worker transitions and ensure compliance with updated employment timelines.
4. Refusal to Process LMIAs in High-Unemployment Areas
Effective Date: Ongoing as of September 2024
To protect local job markets in regions facing economic challenges, the government will refuse to process LMIA applications for low-wage positions in census metropolitan areas where the unemployment rate is 6% or higher.
This move is designed to prioritize job availability for Canadians in areas with sufficient local labour supply.
Exceptions:
- Primary agriculture
- Food processing
- Fish processing
- Construction
- Healthcare
These sectors are important and often have trouble finding enough workers, even in places with high unemployment. This policy makes sure that these key parts of the economy get the support they need.
5. Enhanced Business Legitimacy Requirements
Effective Date: October 28, 2024
To further safeguard the integrity of the LMIA process, Canada has introduced stricter measures for proving business legitimacy. Employers can no longer use attestations from professional accountants or lawyers to demonstrate their business’s legitimacy when applying for an LMIA.
New Requirements: Employers must now provide official government documentation, such as:
- Articles of incorporation
- Business licenses
- Tax filings
This policy aims to prevent fraudulent practices and ensure that only legitimate businesses participate in the LMIA process. By reinforcing these requirements, Canada aims to protect foreign workers from exploitation and promote a fair, transparent process.
Summary of Key Changes
| Change | Effective Date | Key Details |
| Increased wage threshold for high-wage stream | November 8, 2024 | Employers must offer at least 20% above median wage |
| Reduced low-wage caps | September 26, 2024 | 10% cap on low-wage positions, with sector exemptions |
| Reduced employment duration for low-wage positions | September 26, 2024 | Maximum of one-year employment duration |
| LMIA processing refusal in high-unemployment areas | September 2024 | No processing in areas with ≥6% unemployment |
| Enhanced business legitimacy requirements | October 28, 2024 | No attestations from accountants/lawyers accepted |
Implications for Employers and Workers
These changes signal Canada’s commitment to balancing the labor market by addressing employer reliance on temporary foreign workers while protecting domestic job seekers. Employers must reassess their hiring practices and ensure compliance with the new wage and employment regulations.
For temporary foreign workers, these updates underscore the need for transparency and fair treatment. Stricter rules help safeguard their rights and ensure they are employed by credible businesses.
Conclusion:
While these changes may pose new challenges, they are designed to strengthen Canada’s labor market and uphold the integrity of its immigration system.
It becomes important to understand that most changes are designed to reduce loopholes in the system and make the immigration process smoother.
