Understanding the LMIA exemption Significant Benefit Work Permits

On December 15, 2022, Immigration, Refugees and Citizenship Canada (IRCC) updated its Labour Market Impact Assessment (LMIA) exemption codes. An LMIA is an opinion from Service Canada that the entry of a foreign worker will have a positive or neutral impact on the Canadian labour market. To obtain a positive LMIA, employers must generally recruit for four weeks on prescribed websites, invite potentially qualified Canadians to apply, pay prevailing wage and demonstrate other labour market benefits. The process is often difficult.

Because of this, and other reasons, Canadian immigration legislation allows IRCC to issue work permits in certain circumstances without employers needing to obtain LMIAs. These are known as LMIA exemptions.

For the most part, the changes from December 15, 2022, involve renumbering some of the LMIA exemptions and splitting previous exemptions into several categories. Future changes are expected. There were, however, important changes to the LMIA exemptions for provincial nominees in business programs and other entrepreneurs. These changes involve the introduction of “significant benefit” tests.

Significant Benefit exemption

IRCC has always had an LMIA exemption for individuals whose work in Canada would generate significant economic, social or cultural benefits.

Generally, economic benefits are benefits that would contribute to a company’s growth, expansion or continuation that have fiscal benefits and allow for the competitive advantage of Canada’s business community. Social benefits are where someone’s work will provide significant external benefits to other third parties not directly involved in business transactions. Culture is defined as creative artistic activities and the goods and services produced by it.

Significant includes, but is not limited to, an assessment of how the work of a foreign national will provide general economic support for Canada, advancement of Canadian industry, increased health and well-being or increased tolerance or opportunities to come together with others of similar culture.

The IRCC website provides examples of all of the above. It cautions that visa officers should be reluctant to issue work permits under the category, but also notes that where an LMIA is not available, and the balance of practical considerations indicates that the work of a foreign national would be of significant benefit to Canada, economically, socially or culturally, then a work permit can be issued without the LMIA.

Provincial Nominee Program for entrepreneurs

Prior to December 15, 2022, prospective provincial nominees who were issued work permit support letters by a provincial government to be entrepreneurs in a province did not need to also demonstrate that their work in Canada would generate a significant economic, social or cultural benefit.

This is no longer the case. Now, under a new LMIA Exemption Code C-60, entrepreneurs applying for work permits under provincial nominee programs will generally need to demonstrate that their proposed work will provide general economic stimulus or the advancement of Canadian industry. They will also need to provide business plans which show that they have the experience to manage the business, the language abilities needed to operate the business and that their work will be of significant benefit. Provincial letters of support may be indicative, but IRCC will now it seems, essentially be reassessing provincial nomination applications.

The consequence of this change is significant and could potentially reduce the attractiveness and predictability of provincial nominee entrepreneur programs. The change is recent and has not been widely publicized. Those considering applying to provincial entrepreneur programs, as well as those who may represent them, need to understand the new LMIA Exemption Code C-60.