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WHAT IS LMIA?

LABOUR MARKET IMPACT ASSESSMENT

 

LMIA is a short acronym for Labour Market Impact Assessment. 

The application’s main purpose is to assess eligible Canadian business owners/employers who want to hire a temporary foreign worker (herein after TFW). Therefore, they need to apply for LMIA under their businesses to sponsor the TFW’s work permit.

Once LMIA is approved, then the TFW can use this to apply for their work permit.

The type of work permit received by using LMIA is called “LMIA-based Work Permit”, or “Closed Work Permit” because the TFW who has this work permit is only allowed to work for that particular company, and not anywhere else.

In some cases, if TFW is eligible, then he/she may apply for a permanent residence application through a federal program called, Express Entry, which will be covered in another book.

LMIA is assessed by a government body called Service Canada. The main intention of assessing the Canadian business is to ensure it actually has a need to hire the temporary foreign worker (herein after TFW), has enough financial and organizational capacity to hire the foreign worker, and most importantly, the business has shown recruitment efforts to hire local Canadians and Permanent Residents first before giving an opportunity to a foreign worker.

As a result, the LMIA application is constituted of information requirements that will prove the businesses’ TFW need assessment, financial information, organizational structure, and recruitment effort.

There are four types of LMIAs.

  1. Regular LMIA: A Canadian business which has not operated more than 1 year in Canada can apply with a specific foreign worker’s name, or unnamed. Once the LMIA is approved, a foreign worker’s name can be changed to someone else prior to being used to apply for a work permit or permanent residency application. The duration of work permit is 1 year by using this LMIA.
  2. PR Support LMIA: A Canadian business which has operated more than 1 year in Canada can apply with a specific foreign worker’s name. The name of the worker cannot be changed once the application is approved. The length of work permit is 2 years by using this LMIA.
  3. PR Only LMIA: A Canadian business which has operated more than 1 year in Canada can apply for a foreign worker’s permanent residence application. The foreign worker can start work once he/she becomes PR. Thus, a foreign worker cannot apply for a work permit by using this LMIA.
  4. Owner-Operator LMIA: There is no restriction on how many years the business has been operating in Canada. Nevertheless, Service Canada highly prefers companies that have a sound foundation in company history, organization, and financial background. This type of LMIA requires a foreign worker to be an actual owner and an operator of the company. Therefore, the worker is required to invest more than 50% of the business, and be a controlling shareholder of the company. Due to these reasons, the paper works and other requirements are much more stringent than other LMIA applications. However, this LMIA is perfect for individuals who are looking to immigrate to Canada through investments. The foreign worker is eligible for both work permit and permanent residency (depending on their personal situation) by using this LMIA.

All LMIAs expire in 6 months after the approval date. This indicates that the employer must ensure the foreign worker to use this LMIA within 6 months by applying for a work permit, or permanent residency.

The application processing times varies depending on what kind of LMIA application the employer files for. On average, Regular LMIA takes 8 months to 12 months, PR Support LMIA and PR Only LMIA takes 1 to 3 months, and Owner-Operator LMIA takes 2 weeks to 2 months after submission.

For each LMIA application except PR Only LMIA, the government fee of CAD $1,000 is charged by Service Canada. Moreover, for each LMIA application except Owner-Operator LMIA, job advertisement is needed.

Lastly, LMIA application should be applied under either a “stream for high-wage positions” or “stream for low-wage positions” depending on the wage of the job position. If the job’s median hourly wage is less than its province or territory’s median hourly wage, then it is considered as a low-wage job. If it is higher, then it is defined as a high-wage job. The median hourly wage by each province and territory is updated often, thus it is essential to double check the government website before preparing the application. See the table below for more information.
(Reference: https://www.canada.ca/en/employment-social-development/services/foreign-workers/service-tables.html)

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