Introduction

As a general rule, Canadian employers seeking to temporarily hire a foreign worker must obtain an individual labour market opinion ("LMO") from the local office of Human Resources and Social Development Canada/Service Canada ("HRSDC/Service Canada") before the foreign national will be permitted to apply for a work permit. However, several exemptions from the LMO requirement appear in the Immigration and Refugee Protection Regulations, SOR/2002-227 ("IRPR"). There are also a several blanket national LMOs issued by HRSDC/Service Canada that will apply to any temporary foreign worker who has been offered a job in one of these specific areas. Where available, it is preferable to utilize one of these exemptions or national LMOs in an effort to bypass the individual LMO requirement. However, where none of the exemptions or national LMO's apply, the employer will need to obtain sn LMO for the foreign worker.

General Procedures for Most Skilled Occupations

Assessment Criteria

According to IRPR 203(1), Citizenship and Immigration Canada ("CIC") is required to determine, on the basis of an LMO provided by the HRSDC Service Canada, if the job offer is genuine and if the employment of the foreign national is likely to have a neutral or positive effect on the labour market in Canada. According to IRPR 203(3), the LMO must be based on the following factors:

1. Whether the employment of the foreign national is likely to result in direct job creation or job retention for Canadian citizens or permanent residents;
2. Whether the employment of the foreign national is likely to result in the creation or transfer of skills and knowledge for the benefit of Canadian citizens or permanent residents;
3. Whether the employment of the foreign national is likely to fill a labour shortage;
4. Whether the wages offered to the foreign national are consistent with the prevailing wage rate for the occupation and whether the working conditions meet generally accepted Canadian standards;
5. Whether the employer has made, or has agreed to make, reasonable efforts to hire or train Canadian citizens or permanent residents; and
6. Whether the employment of the foreign national is likely to adversely affect the settlement of any labour dispute in progress or the employment of any person involved in the dispute.

According to HRSDC/Service Canada, when assessing the factors described in IRPR s. 203(3), it will primarily consider the following:

1. The occupation in which the foreign worker will be employed;
2. The wages and working conditions offered;
3. The employer's advertisement and recruitment efforts;
4. The labour market benefits related to the entry of the foreign worker;
5. Labor consultations, if any, with the appropriate union; and
6. Whether the entry of the foreign worker is likely to affect the settlement of a labour dispute.

Each of these factors is addressed in greater below.

Proposed Occupation

Proposed employers should be prepared to identify the occupation that the foreign national will assume in Canada, using the National Occupational Classification ("NOC"), which is HRSDC/Service Canada's dictionary of occupations in Canada. In order to obtain a positive LMO from HRSDC/Service Canada, the occupation must be a skilled position. In other words, it must fall within NOC Group 0 (management occupations), NOC Group A (occupations requiring a university education), or NOC Group B (occupations requiring college education or apprenticeship training).

It is not believed that lesser skilled occupations have labour shortages. As a result, occupations that require only a high school diploma and/or occupation-specific training (NOC Group C) or on-the-job training (NOC Group D) are generally not eligible for LMOs.

HRSDC/Service Canada will only consider issuing an LMO for such occupations under its Pilot Project for Occupations Requiring Lower Levels of Formal Training, which commenced in July 2002. This pilot project imposes many additional requirements, including:

1. A maximum 24-month validity period;
2. A requirement that the employer review and adjust the foreign worker's wage after 12 months of employment;
3. A requirement that the employer pay all transportation costs for the foreign worker to and from his or her home country;
4. A requirement to provide medical coverage until the foreign worker is eligible for provincial health insurance coverage;
5. A requirement to register the worker under appropriate provincial workers compensation/workplace safety insurance plans;
6. A requirement that the foreign worker remain outside Canada for four months prior to seeking another LMO.

Wages and Working Conditions Offered

As part of the LMO process, HRSDC/Service Canada will review the wage or salary that is offered to the foreign national. It will compare the proposed wage or salary to the wages and salaries paid to Canadians in the same occupation, based on labour market information available from Statistics Canada, HRSDC/Service Canada, provincial ministries, and other similar sources.

HRSDC/Service Canada will refuse to provide a positive labour market opinion where the proposed employer is offering a wage or salary below the rates paid to Canadians in the same occupation. This is intended to discourage the use of foreign workers as a source of cheap labour, which will adversely affect the wages and salaries of Canadian workers.

HRSDC/Service Canada will also consider whether the proposed employer will offer the same working conditions as those offered to Canadian workers. In other words, it will not approve an LMO where the working conditions for the foreign worker will not be consistent with federal or provincial employment standards for the particular occupation and workplace.

Advertising and Recruitment Efforts

HRSDC/Service Canada generally expects the proposed employer to provide evidence of its advertising and recruitment efforts, in an attempt to locate qualified Canadian citizens or permanent residents before choosing to hire a foreign worker. At least in theory, it might be possible to demonstrate a positive or neutral effect on the labor market without engaging in advertising and recruitment (i.e. perhaps where the employment of the foreign worker would result in skills transfer or the creation or retention of jobs). However, it is generally unwise to request an LMO without making any effort to recruit Canadian workers.

Labor Market Benefits to Canadians

In light of the above, a proposed employer should be prepared to demonstrate the following:

1. Shortage of Qualified Canadian Citizens or Permanent Residents;
2. Direct Creation or Preservation of Canadian Jobs; and/or
3. Creation or Transfer of Skills and Knowledge.

Although HRSDC/Service Canada does not specifically require a proposed employer to demonstrate all three of these labour market benefits, the proposed employer should attempt to demonstrate as many of these factors as possible.

Union Consultations

Where the proposed position part of a collective bargaining unit, HRSDC/Service Canada will expect the proposed employer to provide the following information with the LMO application:

1. The proposed employer should provide an explanation of the union's position on the employment of the foreign national in the proposed job should be provided. HRSDC/Service Canada does not expect union concurrence, but does expect documentation confirming that the union has been advised that the position is being filled by a foreign worker and not by a Canadian or permanent resident.
2. If the proposed employer has not contacted the union, it should explain why this has not been done.
3. The proposed employer should state whether it actively works with the union to identify unemployed Canadians.
4. The proposed employer should confirm that the conditions of the collective agreement (i.e. wages, working conditions) will apply to the foreign worker.

HRSDC/Service Canada has the discretion to consult with unions for the specific information needed to assess the LMO application. They may require input or clarification on matters such as the status of a labour dispute, the wage rates for a particular occupation, the terms of a contract or broader labour market information.

Labour Disputes

According to IRPR 200(3)(c), CIC may not issue a work permit to a foreign national where specific work that the foreign national will perform is likely to adversely affect the settlement of any labour dispute in progress or the employment of any person involved in the dispute, unless all or almost all of the workers involved in the labour dispute are not Canadian citizens or permanent residents and the hiring of workers to replace the workers involved in the labour dispute is not prohibited by the Canadian law applicable in the province where the workers involved in the labour dispute are employed. HRSDC/Service Canada will also refuse to issue a positive LMO in such cases.

Special Procedures for Regional Occupations under Pressure in Ontario

In some regions of Canada, labour market information may indicate that the demand for labour in certain specific occupations is greater than the available supply. To meet the pressing human resource needs of Canadian employers, HRSDC/Service Canada has developed Regional Lists of Occupations under Pressure for Ontario, Alberta, and British Columbia. These list are available here.

The same assessment criteria described above still applies to occupations under pressure. However, proposed employers who wish to hire temporary foreign workers in occupations appearing on a Regional List of Occupations under Pressure will be considered to have conducted appropriate advertising and recruitment efforts if they:

1. Advertise on the Government of Canada's national Job Bank for a minimum of 7 calendar days; or
2. Demonstrate that they have established, ongoing recruitment mechanisms already in place (i.e. using recognized Internet sites, unions, professional associations, corporate website, professional journals, newspapers, and newsletters).

The Regional Lists of Occupations under Pressure include both skilled and unskilled positions. However, for positions falling under NOC Groups C or D, the proposed employer will be required to satisfy both conditions.