LMIA 101: What Canada Expects Before You Hire a Foreign Worker

3 min read

5/30/25 5:35 PM

<span id="hs_cos_wrapper_name" class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_text" style="" data-hs-cos-general-type="meta_field" data-hs-cos-type="text" >LMIA 101: What Canada Expects Before You Hire a Foreign Worker</span>

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If your Canadian company is hiring foreign workers, you may need a Labour Market Impact Assessment (LMIA). But do you know when, and why? For HR teams unfamiliar with immigration procedures, this first step can be unclear and costly if mismanaged.

In this article, we break down when an LMIA is legally required, the logic behind it, and what happens when companies skip the process or get it wrong.

Context: What Is an LMIA and Why Does It Exist?

An LMIA is a document issued by Employment and Social Development Canada (ESDC). It confirms that hiring a foreign national will not negatively affect the Canadian labour market. In short: it proves no Canadian or permanent resident is available for the job.

The LMIA process was designed to:

Protect Canadian jobs and wages
Prioritize domestic recruitment
Ensure fair working conditions for foreign hires

Employers must prove they've made reasonable efforts to hire locally before hiring abroad. This includes advertising the position, offering competitive wages, and justifying why a foreign hire is necessary.

In other words, Canada makes you ask first to protect its workforce, and expects you to prove your case every time.

When Do You Need an LMIA and When Don’t You?

Situation	LMIA Needed?	Typical Work-Permit Type
Hiring a new foreign worker in most sectors	Yes	Employer-specific (LMIA-based) WP
Intra-company/CUSMA/CETA transfer	No	LMIA-exempt WP
Post-grad work permit holder	No	Open WP
Renewing a closed LMIA-based permit	Yes	Employer-specific WP
Quebec CAQ + CSQ (pre-PR)	Often Yes	Employer-specific WP

Gray zones (e.g., Global Talent Stream, Francophone Mobility) may still require LMIAs, but benefit from priority processing. That’s why the first strategic HR question is: Do we actually need an LMIA? Answer it early, or pay later. Some professionals, such as Colombian nationals in technical fields, may qualify for LMIA exemptions under trade agreements.

You generally need an LMIA if:

The job is not on an exemption list (like CUSMA professionals or intra-company transfers)
The candidate is not already in Canada with an open work permit (e.g., a post-graduate or bridging permit)
You're hiring under the Temporary Foreign Worker Program (TFWP), especially for roles in agriculture, construction, hospitality, caregiving, and manufacturing

The LMIA must be obtained before the worker applies for a closed work permit. It’s linked to a specific employer, job title, and location.

What Happens If You Don’t Get One?

Failing to secure an LMIA when required can result in:

Work permit refusals for the candidate
Delays or lost contracts due to unfilled roles
Fines or blacklisting under Canada’s employer compliance program
Ineligibility for future LMIA applications

For example, if a company hires a foreign worker without proper authorization, they may face penalties up to $100,000 and be barred from the Temporary Foreign Worker Program for up to five years.

2024–25 Rule Changes HR Can’t Ignore

Rule Change	Why It Matters
20% wage-threshold hike (Nov 8, 2024)	Median wage benchmarks shifted upward—more roles now fall under stricter low-wage rules.
Low-wage LMIA moratoriums in CMAs with ≥6% unemployment (Montréal, Laval)	Jobs allowed last year may now be blocked until Nov 30, 2025.
No more lawyer/CPA attestations for business legitimacy (Oct 28, 2024)	Employers must submit original corporate documents; third-party letters no longer valid.
Tighter caps (often 20% → 10%) on low-wage foreign workers per worksite	HR must check hiring ceilings before making job offers.

Planning tip: If any of these updates affect your roles or locations, add 2–3 weeks of lead time to your workflow.

As of 2024–25, several updates have tightened LMIA compliance:

Wage thresholds increased by up to 20% in some provinces
Low-wage suspensions were enacted in select regions (e.g., Québec retail and food service)
Employer audits have intensified, especially for repeat applicants
These shifts make it more important than ever to verify whether an LMIA is needed, and how to get it right.

Risk-Lens Snapshot

Processing delays are now brutal. Average LMIA wait time jumped from 58 to 165 business days (~7.5 months) between September 2023 and March 2025. Non-compliance can empty your budget. Penalties reach $100,000 per violation (up to $1 million annually), with risks of public shaming and permanent bans.

HR Impact Summary: LMIA errors today do more than delay hiring; they jeopardize workforce continuity and brand reputation. This section highlights the key 2024–25 shifts and what your team can do to stay compliant.

The Hidden Cost of Getting LMIA Wrong

Risk	Direct Impact	Knock-On Effects
LMIA refusal or delay	Restart fee of CA$1,000 per role + lost time	Delays can cost ~CA$4,000/week in some sectors (e.g., transport, manufacturing).
Permit expiry during backlog	Work stoppage; loss of MSP/RAMQ coverage	Overtime costs, morale loss, and missed deadlines.
Audit failure	Fines up to $100,000 per violation + public listing	Reputational damage, client audits, and reduced future work permit approvals.

Bottom line: One missed step can snowball into $10K–$50K in direct losses, before counting lost business opportunities.

Conclusion: Get Clarity Before You Recruit

The LMIA is not just a form, it’s a gatekeeper. Understanding when and why it’s required can protect your company from costly mistakes and keep your hiring plans on track.

Not sure if your job offer needs an LMIA? Book a free consultation with our team to plan your next hire.