July 15, 2015

High Refusal Rates for LMIA Applications

Posted by Legal Team - Bellissimo Law Group PC

A Canadian employer who wishes to hire a foreign worker in Canada will typically require what is called a Labour Market Impact Assessment (LMIA) before they can do so. A positive LMIA will show that there is a need for the foreign worker to fill the job that is being offered and that there is are no Canadians or permanent residents who are available to perform the position sought. LMIA applications are submitted through the Employment and Social Development Canada (ESDC).

In mid 2014, various changes were made to the LMIA (formerly Labour Market Opinion (LMO)) process. The current LMIA regime is much more onerous than its LMO counterpart and requires that Canadian companies use the LMIA process as a last-resort hiring option.

In fact, ESDC figures for the first half of the 2015 year show high refusal rates for LMIA applications. According to ESDC’s report “Approval and refusal rates for LMIA by province”, from the period 1 January 2015 to 1 June 2015, refusal rates were as high as 33.10% for Alberta, 18.56% for Ontario, and just over 19% for both Manitoba and Saskatchewan.

Although ESDC posts guidelines for LMIA applications, even if all requirements are met, there is still the risk that an officer may refuse the application. The ESDC officer can refuse an LMIA application based on their discretion, internal research that they conduct without prior notice to applicants, or based on factors that are not publicly available. Unless the employer provides a larger overall argument to justify the hiring of a foreign worker, the LMIA could be refused or may be granted for a shorter duration than requested.

More importantly, if an LMIA application is submitted and deemed by ESDC to be “incomplete”, unlike applications sent to Citizenship and Immigration Canada, ESDC will destroy the application package and it will not be returned to the company. Given the high percentage of refusal for LMIA applications, it is imperative that Canadian companies not only meet LMIA requirements, but also exceed them.

For more information on LMIAs, please click here.