Important Changes to Labour Market Impact Assessments: What Employers Need to Know

The rules governing Labour Market Impact Assessments (LMIAs) have seen significant changes over the past few weeks, impacting both the high-wage and low-wage streams. For employers navigating this process, it’s crucial to stay informed about these updates, as they could affect your current and future applications. Below, we have outlined the key changes to help you understand how they may impact your business.

High-Wage LMIA Changes

The definition of a high-wage LMIA is shifting. Previously, any LMIA with an offered wage at or above the provincial median was considered high-wage. In British Columbia, for example, this meant that a wage of $28.85 or higher was sufficient to qualify.

What’s changing?

Starting November 8, the hourly wage for high-wage LMIAs must be 20% higher than the provincial median. Here’s how that breaks down for a couple of key provinces:

British Columbia: With a current median wage of $28.85, the new threshold will be $34.62 per hour.

Ontario: The median wage is $28.39, so the new requirement will be $34.07 per hour.

This change will impact many employers preparing to submit high-wage LMIAs at or just above the current median. For those unable to meet the new wage requirements, the low-wage stream may be the only alternative. However, this option is unavailable in many regions and comes with strict conditions where allowed.

The high-wage stream remains more favorable because it avoids the strict limitations that apply to the low-wage stream, which we will discuss below. For employers who can manage the new wage requirement, this is still the best option.

Low-Wage LMIA Changes

For employers submitting low-wage LMIA applications, recent changes have made the process much more difficult. As of September 26, Service Canada has implemented a refusal to process rule for low-wage LMIAs in census metropolitan areas where the unemployment rate is 6% or higher.

Currently, this means that low-wage LMIA applications cannot be submitted in Metro Vancouver (6.5% unemployment rate) or Toronto (8.6%). The unemployment rates will be updated every three months, but for now, this rule applies unless your business qualifies for an exemption, such as those in construction, food manufacturing, or healthcare. Even if your business is exempt, or if you’re outside these affected areas, you will still face a cap on the number of low-wage temporary foreign workers you can employ. In most industries, low-wage temporary foreign workers can make up no more than 10% of the total workforce at any particular work location. The cap is raised to 20% for positions related to construction and healthcare.

On top of that, the maximum length of a work permit for low-wage LMIA holders has been reduced from two years to one year. This will make it much more challenging to maintain a stable workforce through the low-wage stream. In summary, low-wage LMIAs are becoming significantly harder to process, and employers are encouraged to aim for high-wage LMIAs whenever possible.

Other Changes

In the past, submitting an LMIA through stream supporting permanent residency, which exists outside the high- and low-wage streams, was beneficial because the stricter requirements of those streams could be avoided. Now, employers accessing this stream will need to submit a submission plan for high-wage positions and will be subject to the refusal to process (based on the unemployment rate), as well as the cap requirements, for low-wage positions. This change eliminates the advantage of submitting under the PR stream, meaning there’s no longer much value in choosing this route.

Additionally, starting October 28, employers will no longer be able to use attestations from lawyers or professional accountants to prove their business legitimacy. Instead, they must rely on other documentation accepted by Employment and Social Development Canada (ESDC). This is an important change to be aware of as you prepare to submit your applications.

Conclusion

In summary, recent changes to the LMIA process mean that many employers will need to adjust their strategies for hiring and retaining foreign workers. We recommend that employers aim for the high-wage stream whenever possible, despite the new 20% above median requirement, to avoid the complications of the low-wage stream.

As always, if you need further guidance or support with your LMIA applications, we are here to help. We understand how these changes affect your business, and we are committed to ensuring a smooth and successful process.