New LMIA Policy for Low-Wage Workers in Canada
On August 26, 2024, the Canadian government released a list of census metropolitan areas (CMAs) highlighting the unemployment rate across various regions.
Moving forward, Labour Market Impact Assessment (LMIA) applications from foreign workers under the low-wage stream of Canada’s Temporary Foreign Worker Program (TFWP), will no longer be accepted in regions where the unemployment rate is 6% or higher.
The list of CMAs will change according to the unemployment rate in various regions and the federal government will update their list every three months. The updated CMA list can be found here.
What is an LMIA?
A Labour Market Impact Assessment (LMIA) is a document issued by Employment and Social Development Canada (ESDC) that evaluates the potential impact of hiring a foreign national on the Canadian labor market. To hire a foreign national instead of a Canadian worker, employers are legally required to apply/receive a positive LMIA. This assessment is also a mandatory document in obtaining a work permit for temporary foreign workers (TFWs).
Canadian Worker Priority
The Canadian government is tightening restrictions by prioritizing the needs of the Canadian labor market above all else. As we saw on November 8, 2024, the wage threshold used to determine whether a worker falls under the high-wage or low-wage stream of the TFWP was increased. As a result, employers wanting to hire temporary foreign workers in low-wage categories have already been facing strict guidelines, as they are now forced to meet higher wage requirements to obtain a positive LMIA.
This new policy continues to prioritize Canadian workers, especially in areas with higher unemployment rates. The goal is to provide more job opportunities for local workers by limiting the number of foreign workers hired for low-wage positions in these regions. In line with the previous wage-threshold increase, the restriction of TFWs applying to CMAs encourages employers to address labor shortages across Canada.
How the New Policy Affects Employers and TFWs
Employers in CMAs with an unemployment rate of 6% or higher cannot hire low-wage foreign nationals under the TFWP unless the employer:
- Increases the wage for the job position so that it can be recognized under the high-wage LMIA stream.
- Delay the LMIA application for three months to see if the unemployment rate in their region decreases (given the fact that the CMA chart gets updated every three months).
If you are a TFW in Canada on a low-wage work permit, this policy can limit you from extending your status as you cannot do so without a positive LMIA. If you are unable to extend your work permit due to the new LMIA requirements and find yourself in a CMA with an employment rate of 6% or more, you must stop working.
Stay Updated
As mentioned earlier, the government will update the list of CMAs every three months, and the next updated list will be released by the government of Canada on April 4, 2025. This new policy will remain in effect until further notice as there has been no set end-date.
Moving forward, before applying for a Labour Market Impact Assessment (LMIA) or renewing your status under the Temporary Foreign Worker Program (TFWP), it is important to check if the postal code of the work location falls under a census metropolitan area (CMA) where the unemployment rate is 6% or higher. Failure to do so may result in an unsuccessful LMIA application, whether you’re applying for a new work permit or a renewal. Make sure to verify the unemployment rate of the area to avoid refusals or delays in your application process.
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