Part 3/4: Employer Strategies For Expiring Open Work Permits; LMIA-Based Work Permits

Learn about the Labour Market Impact Assessment application process and application streams for Canadian employers who want to retain foreign workers with expiring Open Work Permits, including Post‑Graduation Work Permits (PGWPs). Explore the High-Wage, Low-Wage, and Global Talent LMIA Streams.

Why Employers May Need to Consider a Labour Market Impact Assessment (LMIA)

Canadian employers are increasingly struggling to retain talented employees who hold Open Work Permits, frequently PGWPs issued to them following graduation from a Canadian post-secondary institution. (See Part 1) In (Part 2) of our series we explored that Canada offers several LMIA‑exempt work permit categories that allow employers to keep skilled international graduates without going through the LMIA process. However, many employers will need to obtain a positive LMIA through the Temporary Foreign Worker Program to retain a foreign worker when an LMIA-exempt work permit category is not available.

This article outlines the most common LMIA pathways for employers who wish to retain foreign talent who are not yet able to apply for permanent residence (see Part 4).

What is an LMIA?

An LMIA is a document issued by Employment and Social Development Canada (ESDC) to an employer that serves as the legal basis for a foreign national’s work permit application. An employer will need to obtain a positive LMIA to hire – or continue to employ – a foreign worker when there are no LMIA-exempt work permit options available.

An employer may obtain a positive LMIA if it can be demonstrated that there is a genuine need to fill a labour shortage and there are no qualified Canadian citizens or permanent residents available to fill the role. All LMIA applications are subject to a business legitimacy assessment, and ESDC must determine that the employer is providing a good or service in Canada, is offering a job that is consistent with the reasonable needs of the business, can fulfill the terms of the job offer, and has no compliance issues.

Once an employer obtains a positive LMIA, the foreign worker may apply for a work permit.

Generally, the job in Canada and the offered wage will determine under which stream an employer should apply for an LMIA.

1. High-Wage LMIAs

Best for: Skilled roles with a demonstrated labour shortage and an offered wage above the provincial or territorial wage threshold.

The High-Wage Stream is for employers looking to hire, or continue to employ, a foreign worker who will earn at or above the relevant provincial or territorial wage threshold. For example, the current provincial wage threshold to apply for a High-Wage LMIA where the work location is in Ontario is $36 per hour.

Before applying for an LMIA, most employers must test the Canadian labour market and demonstrate that they cannot locate a qualified Canadian Citizen or Permanent Resident to fill the position. Recruitment efforts must be conducted using a variety of methods that meet the strict requirements of the Temporary Foreign Worker Program for a minimum one (1) month period. Employers can request an LMIA to support a work permit duration for a foreign worker of up to three (3) years, and in most cases, must commit to a Transition Plan, a plan to decrease reliance on the Temporary Foreign Worker Program in the future.

2. Low-Wage LMIAs

Best for: Roles with a demonstrated labour shortage and an offered wage less than the provincial or territorial wage threshold.

The Low-Wage Stream is for employers looking to hire, or continue to employ, foreign workers who will earn less than the relevant provincial or territorial wage threshold (less than $36 per hour if the work location is in Ontario).

Similar to an application under the High-Wage Stream, employers must first undertake rigorous recruitment efforts to attempt to find Canadian Citizens or Permanent Residents for the job. Employers under this stream can only request an LMIA to support a work permit duration for a foreign worker of a maximum of one (1) year. Importantly, Low-Wage LMIAs carry significant additional employer compliance obligations, including the requirement to pay for roundtrip transportation to Canada and back to the foreign worker’s home country at the end of their work permit, and to ensure that foreign workers have suitable and affordable accommodation in Canada.

There are restrictions on the number of Low-Wage LMIAs that may be approved for an employer, and currently, ESDC will not process Low-Wage LMIA applications where the work location is in a census metropolitan area with an unemployment rate of 6% or higher.

3. Global Talent Stream – Category B LMIAs

Best for: Select roles in Science, Technology, Engineering, and Mathematics (STEM) that employers need to fill quickly.

Category B of the Global Talent Stream is available to employers that need to fill in-demand, highly skilled STEM positions. Under this stream, employers are not required to demonstrate recruitment efforts similar to those required for the High-Wage and Low-Wage Streams, but instead must commit to a series of commitments that will benefit the Canadian labour market. Global Talent Stream LMIAs qualify for expedited 10 business day processing. An employment duration of up to three (3) years may be requested under the Global Talent Stream.

Why Legal Guidance Matters

LMIA applications are highly technical, and each stream has its own eligibility criteria and requirements. It is important for employers to understand program requirements and their specific compliance obligations. Employers will often be interviewed by an ESDC Program Officer as part of an application’s review, and adequate preparation for such interviews is essential.

Missteps in preparing applications and even minor, inadvertent mistakes in conducting recruitment efforts or detailing wage calculations and job classifications can lead to a negative LMIA decision. Except in the case of Global Talent Stream applications, it can take employers three (3) to six (6) months to obtain an LMIA decision, so avoiding even the smallest of mistakes is critical in strategic immigration planning and to ensure continuity of work authorization for foreign workers.

If your business relies on international graduates or foreign talent, we can help you identify the most efficient path to retain them.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.