New LMIA Rules: Regions in Canada Where Low-Wage Applications Are Halted
January 28, 2025
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The Canadian labor market has significantly shifted due to new Labour Market Impact Assessment (LMIA) rules. These regulations have affected employers and workers alike, particularly in regions where low-wage applications are now on hold. As Canada adapts to the changing economy, the government has introduced restrictions to address regional workforce shortages. Understanding where these limitations apply is crucial for businesses and foreign workers.
Get caught up on the latest updates to Canada’s LMIAs with our in-depth analysis of the new LMIA rules, how they impact Canadian employers and workers, and the regions affected by these changes.
What is the LMIA and Why is It Important?
The LMIA is a document issued by Employment and Social Development Canada (ESDC) that Canadian employers must obtain to hire foreign workers. The assessment evaluates whether hiring a foreign worker will negatively affect Canada’s labor market. If the LMIA is positive, it means that the employer can proceed with hiring a foreign worker.
If the LMIA is negative, the Canadian employer's effort to hire a foreign worker could harm the local job market. The LMIA process is vital for employers who wish to hire foreign workers for positions that are difficult to fill with local talent. In the case of low-wage jobs, the LMIA process ensures Canadian employers are not bypassing Canadian workers in favor of cheaper foreign labor.
The TFWP’s Low-Wage Stream
The Temporary Foreign Worker Program (TFWP) allows Canadian employers to hire foreign workers to address labor shortages. The type of LMIA application an employer must submit depends on the wage offered for the position. The Canadian employer can apply under the high-wage stream if the wage meets or exceeds the provincial or territorial wage threshold. If the wage falls below the threshold, the position must be filled under the low-wage stream.
As of November 8, 2024, the hourly wage for the high-wage stream has been increased to 20% above the median wage in the relevant province or territory, or at least equal to the wage paid to other workers with similar roles and experience within the same company.
If the wage does not meet this threshold, Canadian employers must apply under the low-wage stream of the TFWP. The low-wage stream imposes additional restrictions on the LMIA process and may be subject to regional limitations, particularly in areas with higher unemployment rates.
The New LMIA Rules for 2025: What Has Changed?
The Canadian government has introduced new rules for LMIAs under the low-wage stream of the TFWP. As of August 26, 2024, LMIAs will no longer be processed in census metropolitan areas (CMAs) with an unemployment rate of 6% or higher. This means Canadian employers in these areas cannot hire foreign workers under the TFWP or renew Canadian work permits for existing TFWP employees.
A list of CMAs with unemployment rates exceeding 6% was released on January 10, 2025, and will be updated every three months, with the next update scheduled for April 4, 2025. These changes aim to prioritize Canadian workers in areas where the labor market is already competitive, reducing reliance on foreign labor for low-wage positions.
Regions Affected by the New LMIA Rules
As of January 10th, the Canadian government has designated 15 Census Metropolitan Areas as having 6% or greater unemployment rates. Below is a table outline of each region affected by the new LMIA rules.
| Canadian Census Metropolitan Area (CMA) | Unemployment Rate (Percentage) |
|---|---|
| St. John's, Newfoundland and Labrador | 6% |
| Saint John, New Brunswick | 6.1% |
| Montréal, Quebec | 6.2% |
| Oshawa, Ontario | 7.5% |
| Toronto, Ontario | 7.9% |
| Hamilton, Ontario | 6.3% |
| St. Catharines-Niagara, Ontario | 6.2% |
| Kitchener-Cambridge-Waterloo, Ontario | 7.3% |
| Guelph, Ontario | 6.2% |
| London, Ontario | 6.4% |
| Windsor, Ontario | 8.8% |
| Barrie, Ontario | 6% |
| Regina, Saskatchewan | 6.1% |
| Calgary, Alberta | 7.5% |
| Edmonton, Alberta | 6.8% |
What Can You do if Your Position is in a CMA With an Unemployment Rate Above 6%?
Before submitting an LMIA application, both Canadian employers and employees should verify the unemployment rate in the census metropolitan area (CMA) where the job is located. This will determine if the LMIA application will be processed, as the government no longer processes low-wage LMIA applications in CMAs with an unemployment rate of 6% or higher.
If a Canadian employer wishes to hire a foreign worker in such a region, they can increase the wage for the position so it qualifies for the high-wage stream. Employees with a job offer under the low-wage stream in a CMA with an unemployment rate of 6% or higher can ask their Canadian employer to delay the LMIA application for three months to see if the unemployment rate changes.
Job seekers currently looking for low-wage positions under the TFWP should consider focusing their search on CMAs where low-wage LMIA applications are still being processed. Workers on a low-wage TFWP work permit who cannot extend their status due to LMIA restrictions must stop working. However, they can apply for a visitor record to stay in Canada as a visitor if they wish to remain.
FAQs
How Can I Stay Updated on Changes to The Express Entry System?
You can stay updated on changes to the Express Entry system by regularly checking the official Immigration, Refugees and Citizenship Canada (IRCC) website. Subscribing to newsletters or following relevant immigration forums and social media channels can provide timely information. It is also helpful to consult Regulated Canadian Immigration Consultants (RCIC) or legal professionals specializing in Canadian immigration for the latest updates.
What Are The Potential Benefits of This Policy?
The new policy aims to prioritize Canadian workers, ensuring they have more job opportunities, particularly in areas with higher unemployment rates. It also encourages employers to offer competitive wages and improve labor conditions. This can lead to a more balanced labor market, addressing labor shortages while supporting local employment.
How Long Will These New Rules be in Effect?
These new rules are in effect, with periodic updates expected every three months, including the next update in April 2025. The Canadian government has not specified an end date, as the policy will likely remain in place until further notice to address ongoing labor market conditions. Regular evaluations may lead to adjustments based on economic needs.