Work in Canada
Latest Canada LMIA Changes: What Employers and Foreign Workers Need to Know in 2024

As of September 26, 2024, Canada has implemented important updates to its Labour Market Impact Assessment (LMIA) rules, which are set to reshape the Temporary Foreign Worker (TFW) Program. These changes are designed to reduce over-reliance on foreign labor, especially in areas with high unemployment, while continuing to support critical sectors that face genuine labor shortages.
If you’re an employer or a foreign worker aiming to understand how these updates impact you, this guide will walk you through the latest adjustments.
Understanding the Labour Market Impact Assessment (LMIA)
An LMIA is a crucial document for Canadian employers looking to hire foreign workers. It shows that hiring a foreign worker won’t negatively affect the Canadian job market, as the employer is unable to find a suitable Canadian citizen or permanent resident for the position.
Canada’s TFW Program relies on the LMIA to regulate the hiring of foreign workers. With the recent changes, the program’s rules have become more stringent, particularly in regions where unemployment is high. Here’s a detailed look at the most significant updates.
Major LMIA Updates Effective from September 2024
1. Suspension of LMIA Processing in High-Unemployment Areas
One of the key updates is the suspension of LMIA applications for low-wage positions in census metropolitan areas where unemployment rates are 6% or higher. This change is part of a broader effort to ensure that Canadian workers are given priority in the labor market. Employers in these regions will no longer be able to use the TFW Program to fill low-wage jobs, as the focus shifts to local hiring.
However, certain industries are exempt from this suspension due to their critical importance to the Canadian economy. These sectors include agriculture, healthcare, food processing, fish processing, and construction, where labor shortages persist even in areas with high unemployment.
2. Lowering the Cap on Foreign Workers
Another significant change is the reduction in the number of temporary foreign workers employers can hire. The previous cap allowed up to 20% of an employer’s workforce to be comprised of foreign workers; this has now been reduced to 10%. This tighter limit aims to encourage businesses to prioritize hiring Canadian workers whenever possible.
Despite this change, employers in essential sectors such as healthcare and agriculture will still have some flexibility, as they are exempt from the cap reduction. For most industries, however, this rule will require careful workforce planning.
3. Shortened Employment Duration for Low-Wage Workers
Under the new rules, temporary foreign workers hired for low-wage positions can now only be employed for up to one year, down from the previous two-year limit. This change further reinforces the idea that the TFW Program is intended to fill short-term labor shortages, not serve as a long-term employment solution.
Preventing Program Misuse: New Fraud Prevention Measures
To address growing concerns about fraud within the LMIA process, the Canadian government is increasing oversight of employers who use the TFW Program. There have been cases where businesses have misused the program to hire foreign workers at low wages instead of making an effort to hire locally. The updated rules are designed to curb such practices.
Enhanced monitoring will involve more frequent inspections and tighter scrutiny of LMIA applications, especially in industries and regions identified as high-risk for non-compliance. Employers found to be misusing the program could face significant penalties, including fines and bans from participating in the TFW Program.
Additionally, discussions are underway to raise LMIA processing fees to reflect the true cost of administration. This fee increase is intended to deter employers from submitting non-serious or fraudulent applications.
Impact of the New LMIA Rules on Employers and Foreign Workers
For employers, the new LMIA rules present both challenges and opportunities. In high-unemployment regions, hiring foreign workers will be more difficult due to the LMIA suspension for low-wage roles. Businesses will need to explore alternatives, such as hiring locally or focusing on industries exempt from the new restrictions.
Foreign workers may face shorter employment periods and fewer job opportunities, particularly in sectors affected by the new 10% cap. However, for those in critical sectors like healthcare or agriculture, opportunities will remain relatively stable, as these industries continue to be vital to Canada’s economic growth.
Monitoring and Future Changes to the TFW Program
The Canadian government has indicated that these changes are just the beginning. Over the next 60 days, a comprehensive review of the TFW Program will take place, which could result in additional modifications. This review may include adjustments to the high-wage stream, further sector-specific exemptions, and changes to how existing LMIA applications are processed.
By closely monitoring the effectiveness of the new rules, the government hopes to strike a balance between addressing labor shortages and protecting local job opportunities. Businesses and foreign workers alike should stay informed as the TFW Program continues to evolve.
The new LMIA regulations reflect Canada’s commitment to ensuring that the Temporary Foreign Worker Program remains a short-term solution for genuine labor shortages. The government’s focus on reducing unemployment and preventing program misuse means that both employers and foreign workers need to adapt to these changes. For employers, it’s essential to understand the new restrictions and plan accordingly, particularly in regions affected by high unemployment. Meanwhile, foreign workers should be aware that job opportunities may become more limited, especially for low-wage positions, and employment durations may be shorter.