The Changing Landscape of the LMIA Process: What Employers and Foreign Workers Need to Know

Understanding The Changing Landscape of the LMIA Process

The Labour Market Impact Assessment (LMIA) remains a critical step for employers seeking to hire foreign workers under the Temporary Foreign Worker Program (TFWP) and understanding the Changing Landscape of the LMIA Process has never been more important than now. Over the past year, and continuing into 2025, Employment and Social Development Canada (ESDC) and Immigration, Refugees and Citizenship Canada (IRCC) have introduced several changes, some incremental, some significant, that affect eligibility, requirements, timelines, and compliance risk.

In this article, we outline the key changes under current ESDC/IRCC guidelines and provide practical takeaways for both employers and foreign nationals.

Why These Changes Are Happening

The rationale behind these changes includes:

• Balancing labour market protection for Canadians and permanent residents with the need to fill genuine labour shortages.

• Addressing fairness concerns, wage suppression, and misuse of the TFWP, leading to stricter compliance and scrutiny.

• Accounting for macroeconomic conditions such as regional unemployment, inflation, and housing pressures, prompting more region-sensitive rules.

• Implementing volume targets and “soft caps” for temporary resident populations as part of broader immigration policy.

In short: The program remains open to foreign workers, but the bar for eligibility, legitimacy, and compliance has risen. Employers and foreign nationals must be strategic and careful.

Key Changes in the LMIA / TFWP Regime

Change	Description	Effective Date	Implications/Risks
Shortened LMIA validity	LMIAs are now valid for 6 months instead of 12	May 1, 2024 onward	Narrower window to coordinate work permit submission; delays can disrupt timelines
Higher wage thresholds	Wage thresholds for LMIA streams (high/low wage) increased	Applications received on/after June 27, 2025	Roles previously high-wage may now fall into low-wage; employers may need to increase salaries
Stricter rules for low-wage stream	Low-wage LMIAs not processed in CMAs with ≥6% unemployment; max employment period reduced to 1 year; lower caps on number of low-wage TFWs	Moratorium began Sept 26, 2024	Many employers may be restricted from using low-wage stream; stricter conditions where possible
Moratorium on low-wage LMIA in certain regions	Low-wage LMIA applications refused in CMAs with unemployment ≥6%	Updated every 3 months (next: Oct 10, 2025)	Employers must verify CMA before submission
Elimination of attestations by certain professionals	CPA, lawyer, or banker attestations no longer accepted; documentary proof required	Oct 28, 2024 onward	Increased documentary burden (business licenses, financial statements, T4s)
Spousal / dependent open work permit eligibility tightened	Criteria narrowed for spouses/common-law partners of TFWs	Jan 21, 2025	Some spouses who previously qualified are no longer eligible based on TEER classification
Express Entry / job offer points removed	LMIAs no longer provide CRS points for new Express Entry candidates	Late 2024, effective 2025	Reduces incentive for arranged employment under Express Entry
Processing times & priority streams updated	Average processing times updated by stream (Global Talent, high-wage, low-wage, agri, etc.)	Aug 2025 data	Employers must plan conservatively; low wage/business streams may take longer
Recognized Employer Pilot (REP) changes	REP pilot closed to new applications; existing participants continue	Sept 16, 2024	New employers must use standard LMIA channels

A Closer Look at Key Changes

1. Moratorium on Low-Wage LMIA in High-Unemployment CMAs

If a job is located in a CMA with ≥6% unemployment, ESDC will not process low-wage LMIAs. Employers must either:

o Raise wages to meet high-wage thresholds,

o Relocate, or

o Wait until unemployment drops.

2. Wage Threshold Increases & Stream Reclassification

Provincial wage thresholds increased (e.g., Ontario: ~$34.07 → $36.00/hr). Jobs previously considered high-wage may now be low-wage, triggering additional restrictions.

3. Reduced LMIA Validity Period

LMIAs now valid for 6 months, requiring tighter coordination between LMIA approval and work permit application to avoid expiry.

4. Removal of Attestations for Business Legitimacy

Employers must now provide tangible documentation (business licenses, financial statements, T4s), increasing compliance requirements.

5. Spousal Open Work Permit Eligibility Tightened

Only TFWs in TEER 0–1 (some TEER 2–3) roles qualify for dependent open work permits.

6. Removal of LMIA-Based CRS Points

Arranged employment backed by an LMIA no longer gives bonus CRS points under Express Entry, reducing the appeal for some candidates.

Compliance and Enforcement Updates – October 2025

A new federal update (October 6, 2025) highlights both a sharp decline in TFWP usage and a significant escalation in enforcement:

• 50% overall reduction in TFW Program usage, and a 70% drop in the low-wage stream, since late 2024 measures.

• 1,435 employer inspections were conducted; 10% resulted in findings of non-compliance.

• 36 employers were banned, a threefold increase from the previous year.

• $4.9 million in total penalties were issued in FY 2024–2025.

• A fish and seafood employer received the largest penalty on record: $1 million and a 10-year ban.

The government reiterated that the TFW Program is a “last resort”, and that employers found misusing the program face:

• Administrative monetary penalties of up to $1 million per year,

• Temporary or permanent bans from the program, and

• Public listing on IRCC’s non-compliant employer website.

This signals a much tougher enforcement environment, in line with the broader strategy to reduce reliance on temporary foreign labour while protecting workers’ rights.

Implications for Employers & Foreign Workers

For Employers:

• Reassess wage offerings under new thresholds.

• Coordinate LMIA and work permit timelines due to 6-month validity.

• Maintain robust corporate records; attestations alone no longer suffice.

• Use caution with low-wage streams; regional restrictions may apply.

• Strategize workforce composition with Canadians/PRs to meet caps.

• Verify CMA unemployment rates before submission.

• Monitor updates quarterly; rules may change frequently.

For Foreign Workers / Applicants:

• Some previously eligible positions may now be restricted.

• Spousal open work permits are more limited.

• Timing for work permit applications is critical.

• CRS points from LMIA-based job offers no longer apply for new Express Entry candidates.

Looking Ahead

• Regional differentiation: More local regulation based on unemployment, housing, and capacity.

• Increased compliance & audits: Tighter rules may lead to more inspections.

• Sector-specific programs: Health care, tech, agriculture may see special exemptions.

• Integration with permanent residency pathways: IRCC plans suggest stronger links between temporary work and PR programs.

Penned by Pooja Chawla, RCIC at ICL Immigration Inc.

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