Updated: Feb 25
Many companies across Canada struggle to fill positions due to an acute labour shortage in certain industries. Canada is a vast territory of land, the second biggest country in the world in land size, with a small population of only 37.06 million (2018) people.
As such, it can be difficult to find skilled workers in industries such as construction, healthcare, retail and wholesale trade, services, technology, manufacturing, agriculture and energy. We have spoken to many business owners who mention that they have been recruiting for months and are unable to fill positions that have a crucial role within the company. The temporary foreign worker (TFW) program or Labour Market Impact Assessment application is, in essence, an employer applying for an assessment on the impact that hiring a TFW would have on Canada's job market to Employment and Social Development Canada (ESDC), a branch of Service Canada.
Once a labour shortage has been established and when a company is in good financial health with a record of being able to pay employees salaries, an employer might want to consider applying for an LMIA in order to be able to hire a foreign worker who will fill the labour shortage they are facing in Canada. At this stage, we will provide five tips that we have developed through years of experience in this particular category of immigration services.
1st Tip: Wages
In the past, the skill level of the job determined the category within which an application for LMIA was filed. Jobs in skill level 00, 0, A or B were considered skilled jobs which meant they required some university or college and/or several years of experience in order to become qualified to practice in that field. Jobs in skill level C or D were considered low skilled and had lower job requirements in education and work experience. During that time, the skill level of the job determined whether you are making the application in a skilled or low-skilled category.
What has changed since that time is that the median wage for the province where the TFW employee will be working is currently used to determine skill level. Therefore, employers who are paying at or above the median wage for the province or territory of employment should use the application forms for high wage positions whereas employers who are paying below the median wage should use the respective low wage application forms. There are acute differences not only in the scope of the advertisement and recruitment efforts between the two different streams but also in the amount of TFW a company can hire. For instance, there is no cap on the amount of TFW in the high wage category but there is a cap in the low wage category. Therefore, wages are one of the most pivotal factors in the assessment for eligibility and a determining factor in the decision making process.
We recommend that employers assess wages using statistical tools provided by Job Bank as well as by reviewing offers by others within their respective area and job location. We further recommend an assessment of wages commensurate with other employees working in the same position with the company and having the same employment experience or education. One may also consider whether a faster speed of service may be applicable as in top 10% wage earners category and/or supporting the permanent residence application as opposed to the standard LMIA application for TFW.
Offering inappropriate wages or asking for inappropriate education or work experience on a job advertisement is absolutely a reason for refusal of the LMIA application so we recommend that employers treat this particular element with a great deal of care and consideration with due diligence to research and scope out the market place.
2nd Tip: Finances and Payroll
Business start-ups and new businesses are not an ideal participant in the TFW program with the exclusion of owner-operator LMIAs and the business class immigration category. What we mean by this is that a business should have the past two years of Canada Revenue Agency returns showing business activity and an ability to pay wages. Having current employees on payroll and paying regular deductions for those employees shows an ability to abide by the terms of the program.
Participants in the program for the first time should expect that Service Canada will ask to see proof of the owner's active participation in the business in the form of a business license, letter from a licensed accountant etc. They will ask to see the income returns of the business for the past two fiscal year ends as well as any established contracts the business has that would exemplify a need and a shortage for the entire term that a TFW is requested. The past six months balance of the business bank account may also be requested in order to see that the business has sufficient funds to pay a prospective TFW's wages for at least one year in advance. As such, depending on the wages and the terms of the job offer as well as how many current employees the business supports, payroll balance would have to be appropriate to reasonably cover all expenses of the enterprise.
3rd Tip: Advertising and Recruitment
The advertising duration of three months prior to making an application for an LMIA to Service Canada is applicable in all cases and categories. It is also required by the program instructions to advertise in at least three places during the three month duration. However, we recommend that the employer goes above and beyond these minimum requirements in order to present an appealing case for approval of the LMIA application.
We usually utilize 8-10 different mediums for the entire three months duration plus an extra couple of weeks, if time permits. A combination of online, newspaper, and other means ensures a compelling case for shortage of labour.
During the advertising duration, an employer or third party recruiter is liable to interview and/or review resumes of Canadians and permanent residents who apply and may be eligible for the job. They must record and keep precise track of their recruitment efforts as the Service Canada officer will undoubtedly follow up with the employer on their efforts to find Canadians prior to offering this job to a TFW.
4th Tip: Transition Plan
The ultimate goal of the TFW program is to protect the Canadian labour market and Canadian jobs. For this reason, they have in the past few years established the concept of a transition plan which in essence is a plan that the employer must agree to abide by in order to expedite their transition to a Canadian work force in the future. Reducing the reliance of businesses on LMIAs in the future is therefor a goal that an employer should understand and strive towards.
The transition plan can be comprised of many things and quite a few are already recommended by Service Canada on the application forms themselves. In general supporting the permanent residence of the temporary foreign worker is an option, continuing to advertise and recruit Canadians and permanent residents, creating programs for employee referral and working with job fairs and recruitment agencies are just a few options that support transition plan activities acceptable by Service Canada and ESDC.
5th Tip: Interview
After the LMIA application has been submitted and is under review, an employer can expect a call from the reviewing officer in order to discuss the particulars of the application as well as their business. Many people are surprised by the fact that the officer will often ask questions that relate to things already answered on the application form itself such as wages, education and experience requirements, transition plan activities and recruitment efforts. The goal is to affirm that the employer was genuine in the statements made on the application form as well as in their efforts to find Canadians prior to applying for an LMIA.
Their goal is also to affirm that the position is in fact necessary and would benefit the Canadian labour market if given to a TFW. It should make sense financially not only in terms of payroll expenses but also in terms of benefit to the business.
An employer should approach the interview as an opportunity to explain their business and their goals for the business. Explain their labour needs and how fulfilling those labour needs will result in business growth, expansion, or higher revenue or sales. If there is growth or in some cases, if the business is able to stay in operation due to fulfilling a labour shortage, a net positive impact will result in the Canadian labour market thereby assisting in the positive assessment of the LMIA. #lmia #temporaryforeignworkerprogram #immigrationcanada #canadavisa #businessimmigration #canadianbusinesses #servicecanada