Canada’s LMIA Wage Increase: What Employers and Foreign Workers Need to Know
November 11, 2024 Amritpal Kaur
Effective November 8, 2024, Canada has introduced important changes to the Labour Market Impact Assessment (LMIA) program, which impacts businesses seeking to hire foreign workers through the Temporary Foreign Worker Program (TFWP). These changes come with a 20% increase in wage thresholds across all provinces and territories, directly influencing how jobs are categorized as high-wage or low-wage positions. This update has the potential to significantly impact how companies recruit, compensate, and manage their workforce.
Let’s dive into what these wage changes mean for employers, foreign workers, and the overall Canadian labor market.
The LMIA Process and Wage Streams: A Quick Recap
Before hiring a foreign worker, employers in Canada are required to apply for an LMIA. The purpose of this process is to demonstrate that there is a legitimate labour shortage and that hiring a foreign worker will not negatively affect the local job market.
The LMIA divides jobs into two primary categories based on the wage offered:
High-Wage Stream: For positions where the wage is at or above the provincial/territorial threshold.
Low-Wage Stream: For positions where the wage falls below the provincial/territorial threshold.
The new wage increase that took effect on November 8, 2024, raises the minimum salary levels for high-wage positions, impacting employers across Canada who wish to hire foreign workers.
Why Are the Wage Thresholds Changing?
The recent changes to the wage thresholds are a direct response to Canada’s growing need to ensure that foreign workers are paid fairly in alignment with the cost of living, particularly as inflation continues to rise. The increase in wage thresholds also addresses labour shortages in key industries and ensures Canada remains competitive in attracting skilled workers from abroad.
The thresholds will now reflect a 20% increase in many regions, which means businesses that previously hired foreign workers at slightly lower wages may now need to raise their compensation to qualify for the high-wage stream.
How These Wage Increases Impact Employers
If you're a business owner or HR manager in Canada, here’s how the new wage increases could affect your hiring process:
Budget Adjustments: Employers will need to reassess their compensation structures to meet the new wage requirements for high-wage positions. Businesses that were offering wages just below the high-wage threshold will need to increase them to stay competitive.
Industry-Specific Considerations: Certain sectors—such as construction, hospitality, agriculture, and manufacturing—rely heavily on foreign workers. The wage increase may significantly raise operational costs for these industries, especially in provinces where these positions are in high demand.
LMIA Application Process: High-wage positions generally face fewer restrictions and requirements compared to low-wage positions. For employers, this could simplify the hiring process, particularly when they meet the new wage thresholds and avoid additional obligations like hiring and training Canadians.
Increased Competition: With the wage increase, businesses will need to compete more aggressively for skilled foreign talent. This is especially true in high-demand industries like technology, healthcare, and finance, where attracting top talent has become increasingly competitive.
What Do These Changes Mean for Foreign Workers?
For foreign workers, the increased wage thresholds represent tangible benefits:
Better Pay: Foreign workers will benefit from higher wages, as many employers will raise salaries to meet the new thresholds. This is particularly important in industries where foreign workers fill key roles in high-demand sectors.
Easier Path to Immigration: Earning higher wages will also make it easier for foreign workers to qualify for economic immigration programs such as Express Entry, which prioritizes individuals with high-paying jobs and stable employment.
Improved Living Standards: With higher wages, foreign workers can enjoy a better quality of life in Canada. Higher pay increases their ability to afford housing, healthcare, and other essential services, making their transition into Canadian society smoother.
Wage Thresholds Across Canada: What You Need to Know
Here’s a breakdown of the new wage thresholds for high-wage positions across various provinces and territories. The 20% increase is reflected in the updated rates:
Alberta: The high-wage threshold has risen from $29.50 to $35.40.
British Columbia: The wage threshold now stands at $34.62, up from $28.85.
Manitoba: The new threshold is $30.00, a jump from $25.00.
New Brunswick: Employers in New Brunswick now need to offer at least $28.85, compared to the previous $24.04.
Newfoundland and Labrador: The wage threshold has increased from $26.00 to $31.20.
Northwest Territories: In the Northwest Territories, the threshold has risen from $39.24 to $47.09.
Nova Scotia: The wage requirement is now $28.80, up from $24.00.
Nunavut: Nunavut’s new threshold is $42.00, an increase from $35.00.
Ontario: Ontario’s new high-wage threshold is $34.07, up from $28.39.
Prince Edward Island: The wage threshold has moved from $24.00 to $28.80.
Quebec: Quebec now requires a minimum wage of $32.96, up from $27.47.
Saskatchewan: The high-wage threshold has increased from $27.00 to $32.40.
Yukon: Yukon’s wage threshold is now $43.20, a jump from $36.00.
Looking Ahead: What This Means for Canada’s Labour Market
These wage increases signify a major step in Canada’s evolving approach to immigration and foreign labour. By ensuring fair pay for foreign workers and addressing the country’s labour shortages, Canada is positioning itself as a competitive, attractive destination for global talent.
For employers, this means adapting quickly to these changes to remain competitive. For foreign workers, this brings more financial stability, career opportunities, and improved pathways to permanent residency.
Final Thoughts: A Fairer, Stronger Labour Market
With the 20% increase in LMIA wage thresholds, both employers and foreign workers will need to adjust to these new standards. Employers must update their hiring practices and wage offerings to attract and retain skilled talent, while foreign workers stand to benefit from better compensation and smoother immigration pathways.
Canada’s commitment to fair pay and competitive wages is a clear step toward building a stronger, more inclusive economy, addressing labour shortages, and enhancing opportunities for workers from around the world.
If you're an employer looking to hire foreign talent, or a foreign worker considering opportunities in Canada, now is the time to stay informed about these crucial changes to the LMIA process.