Canada Tightens LMIA Rules for Low-Wage Jobs: What Employers and Workers Need to Know
Canada’s labour market policies continue to evolve, and one of the most significant updates in recent months concerns the Labour Market Impact Assessment (LMIA) process. As of September 26, 2024, the federal government has expanded the list of regions where LMIAs for low-wage positions will not be processed, tightening the rules for employers hoping to hire foreign workers through the Temporary Foreign Worker Program (TFWP).
This move is part of Ottawa’s ongoing effort to balance the needs of employers who rely on international talent with the goal of protecting domestic job opportunities—especially in areas where unemployment remains relatively high. The recent changes affect dozens of communities across Canada, and understanding how these rules apply is crucial for both employers and prospective foreign workers.
Understanding the LMIA and the Low-Wage Stream
Before diving into the new changes, it helps to understand the basics of the LMIA system.
A Labour Market Impact Assessment is a document issued by Employment and Social Development Canada (ESDC) that allows employers to hire foreign workers. Essentially, it verifies that there is a genuine need for a temporary foreign employee and that no qualified Canadians or permanent residents are available to fill the role.
Under the Temporary Foreign Worker Program, LMIAs are classified into two main streams based on pay:
High-Wage Stream: Positions that offer a wage at or above the median hourly wage in the province or territory.
Low-Wage Stream: Positions that offer a wage below the provincial or territorial median wage.
The new changes primarily affect the low-wage stream, which is generally used for entry-level or lower-paying positions in sectors like retail, hospitality, food service, and certain support roles.
What Has Changed: Expanded Suspension of LMIA Processing
The federal government has long maintained a policy that restricts LMIA approvals for low-wage positions in areas facing higher unemployment rates. The logic is straightforward: when many Canadians are out of work, employers should be able to find local candidates rather than turning to temporary foreign workers.
As of September 26, 2024, ESDC has updated the list of Census Metropolitan Areas (CMAs) where low-wage LMIA applications will not be processed. This means that employers located in these regions cannot submit low-wage LMIA applications if:
The offered wage is below the provincial or territorial median wage, and
The CMA’s unemployment rate is 6% or higher at the time of application.
This quarterly update increased the number of restricted CMAs from 26 to 32, reflecting a broader trend of localized economic slowdown and persistent unemployment in some urban centers.
New Additions to the Restricted List
Several new cities have now been added to the list where LMIA processing for low-wage positions is suspended. These include:
Guelph, Ontario
Greater Sudbury, Ontario
Winnipeg, Manitoba
Regina, Saskatchewan
Lethbridge, Alberta
Red Deer, Alberta
Kelowna, British Columbia
Meanwhile, Peterborough, Ontario was removed from the list this quarter, indicating that local labour market conditions there have improved enough to allow low-wage LMIA processing to resume.
The inclusion of new mid-sized cities like Guelph and Kelowna shows that the impact of these measures is expanding beyond major metropolitan hubs and into regional economies where unemployment has risen over the past year.
Why the Change Matters
This update represents more than just a bureaucratic adjustment—it has real consequences for employers, workers, and local economies.
For employers, the suspension means they will face greater limitations when hiring for entry-level or low-paying positions through the TFWP. Businesses in industries such as hospitality, manufacturing, or services that have traditionally depended on foreign labour may now find it harder to fill roles if local unemployment remains high.
For foreign workers, particularly those seeking opportunities in Canada through the low-wage stream, this change narrows their options. Prospective applicants may find that positions they once qualified for are no longer eligible for LMIA approval if the employer is located in a restricted CMA.
The federal government’s goal, however, is to ensure that Canadian citizens and permanent residents are prioritized for available jobs—especially in markets where unemployment signals a surplus of local labour.
Exceptions: When LMIAs Can Still Be Processed
Despite the broader suspension, there are key exceptions to the rule. Certain sectors and types of employment remain eligible for LMIA processing, even in high-unemployment regions. These exceptions recognize that some industries are essential or face chronic labour shortages regardless of economic conditions.
Low-wage LMIA applications can still be processed for positions in the following categories:
Primary agriculture (including farming, livestock, and related operations)
Construction roles, where local shortages often persist
Food manufacturing, which remains vital to supply chains
Hospitals, nursing, and residential care facilities, reflecting ongoing healthcare staffing needs
Specific in-home caregiver positions, particularly where family or medical support is required
Positions linked to permanent residency applications, where the LMIA is for supporting an immigration pathway, not for a work permit
Short-term jobs, typically lasting 120 calendar days or less, such as seasonal or emergency work
These carve-outs reflect Canada’s effort to strike a balance between protecting domestic employment and maintaining the labour supply for critical sectors.
The Option for Employers: Transition to the High-Wage Stream
Employers located in CMAs affected by the low-wage suspension are not entirely without recourse. One way to continue hiring through the TFWP is to increase the offered wage so that the position qualifies under the high-wage stream.
By raising wages to meet or exceed the provincial median, the employer can demonstrate that the job is more competitive and that foreign hiring will not undercut local workers. While this approach increases payroll costs, it allows businesses to continue recruiting talent internationally, especially when local labour shortages persist despite unemployment figures.
For many employers, this strategy could serve as a viable workaround, particularly in industries where skilled or semi-skilled labour is hard to attract.
Broader Economic Context
The timing of this update is significant. As Canada’s economy continues to adjust after several years of volatility—from the pandemic to inflationary pressures and shifting immigration patterns—unemployment has started to rise modestly in certain provinces.
ESDC’s quarterly adjustments are data-driven, reflecting local unemployment rates across CMAs. By tightening LMIA approvals where joblessness is higher, the government aims to encourage businesses to tap into the domestic workforce first.
However, the policy also highlights the ongoing tension in Canada’s labour market: even as some regions face high unemployment, many sectors—especially healthcare, construction, and food processing—continue to experience acute labour shortages. The selective nature of the LMIA suspensions seeks to address both realities at once.
What Employers Should Do Next
For employers affected by these changes, proactive planning is key. Here are several steps to consider:
Check the Latest LMIA Suspension List: The list of restricted CMAs changes quarterly. Employers should verify the current status of their region before submitting any LMIA applications.
Review Wage Levels: If your business is located in a suspended CMA, evaluate whether increasing wages could qualify your position under the high-wage stream.
Explore Exempt Sectors: If your job falls under one of the exception categories—such as agriculture, healthcare, or short-term work—you may still be eligible to apply.
Consider Alternative Immigration Pathways: Some employers may explore other options, such as the Provincial Nominee Program (PNP), International Mobility Program (IMP), or pathways linked to permanent residency, which do not always require an LMIA.
Plan for Workforce Stability: Given the unpredictability of future LMIA suspensions, developing long-term recruitment and retention strategies can reduce dependence on temporary foreign labour.
Implications for Foreign Workers
For prospective temporary foreign workers, this change means they must be more strategic in their job search. When evaluating opportunities in Canada, it’s essential to confirm whether:
The employer is located in a CMA affected by the suspension, and
The position falls under an eligible category for LMIA processing.
Those who are already in Canada on a work permit may not be immediately affected, but individuals hoping to secure a new low-wage position will face tighter restrictions depending on location.
Foreign nationals should also keep in mind that employers cannot bypass the LMIA requirement for low-wage roles in restricted CMAs. Any job offer made under these conditions would not be eligible for a valid work permit unless it falls under an exception or a different immigration stream.
Looking Ahead
The expansion of LMIA suspensions to more CMAs underscores the federal government’s commitment to protecting Canadian labour markets while still accommodating essential industries. These changes are part of a broader push toward economic recovery and workforce stability, ensuring that domestic workers are given the first opportunity to participate in local economies.
However, as Canada continues to rely on immigration to fill demographic and labour gaps, the LMIA framework will likely remain a key tool—one that must constantly adapt to shifting employment realities. Employers, policymakers, and workers alike will need to stay alert to quarterly updates and adjust their strategies accordingly.
Final Thoughts
The recent tightening of LMIA processing rules marks a pivotal moment for employers relying on the Temporary Foreign Worker Program. By expanding the list of CMAs under suspension, the Canadian government is sending a clear message: where local unemployment is high, Canadian workers should be prioritized.
For some industries, this will mean adapting recruitment strategies, reassessing wages, and possibly investing more in local talent development. For others—especially those in essential sectors—the targeted exceptions ensure that critical operations can continue without disruption.
Ultimately, this policy change reinforces Canada’s ongoing effort to maintain a fair, balanced, and responsive immigration system—one that serves both the country’s economic needs and the livelihoods of those who call Canada home.
