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.
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:
| 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 LMIA must be obtained before the worker applies for a closed work permit. It’s linked to a specific employer, job title, and location.
Failing to secure an LMIA when required can result in:
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.
| 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for business legitimacy (Oct 28, 2024) | Employers must submit original corporate documents; third-party letters no longer valid.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:
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.
| 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.
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.