With new wage thresholds now in effect, and low-wage streams tightening, lawyers provide tips for HR
For Canadian employers already navigating a complicated process to hire temporary foreign workers, the rules just shifted again.
New hourly wage thresholds that took effect on July 17, 2026, have raised the bar that separates a low-wage Labour Market Impact Assessment (LMIA) from a high-wage one — in some provinces considerably.
In British Columbia, the threshold climbs to $38.40 an hour; in Ontario, it moves to $36.92; and in Nunavut, it rises to $45.00. For any employer whose offered wage now falls below that line, the distinction carries significant practical consequences.
‘Complicated process’ for HR
The thresholds — calculated as the provincial or territorial median hourly wage plus 20%, based on Statistics Canada's Labour Force Survey — are updated periodically. But immigration lawyers say this round of changes, landing at a moment when the low-wage stream is already constrained in most major cities, is forcing employers to make difficult decisions quickly.
"The LMIA process is a complicated process for an employer to engage with who [is] already busy with their business," says Laura Schemitsch, an immigration lawyer at Heron Law Offices in Burnaby, B.C.
"When they learn more about the process, they either say, ‘I have no other option and I'm going to go ahead with it’ or basically it is too much of a burden for that small business to pursue and they're willing to continue having that labour shortage."
Bill MacGregor, partner at Gowling in Waterloo, Ont., echoes the point, saying he regularly hears from HR professionals "If I could find a qualified Canadian, I'd be all over that,” he says, citing the dire need for the LMIA program.
"These are true needs and true shortages — not because [employers are] sitting on their hands not trying to find and get people in these roles."
Two streams, 2 different consequences
The significance of which side of the threshold a wage falls on isn't just administrative. The practical stakes are considerable.
A positive LMIA under the low-wage stream yields a work permit of only one year. Under the high-wage stream, it can extend to three years. The processing fee — $1,000 per position — is the same either way, says Schemitsch.
"When you have one-year work permits, employers… know that they're going to have a continued labour shortage if that employee is not working for them past a year, [so] they're already basically preparing the LMIA application again. That's a lot of administrative burden."
When the threshold increases, an employer has to decide if the wage they've offered has now fallen below the threshold, and if they'll continue with a low-wage position — and probably have to change the application if they've already started it, she says: “Otherwise, they will have to consider raising the wage that they're offering."
Beyond the permit duration, the two streams carry different requirements. High-wage employers must develop a transition plan — a formal commitment to recruiting, retaining and training Canadians and permanent residents — and meet more demanding recruitment and advertising timelines. Low-wage employers must provide or arrange for suitable housing, cover round-trip transportation costs, and, as of recent changes, demonstrate specific recruitment efforts aimed at youth aged 15 to 30.
The latter is a good example of how the program shifts in ways that can catch employers off guard, says Schemitsch.
"Unless you have a lawyer whose job it is to keep an eye on those program requirements, you probably didn't see that update.”
The trap of raising wages
For employers who find themselves just below the new threshold, the obvious solution might seem to be raising the offered wage to qualify for the high-wage stream. But this approach carries its own risks — and the government has flagged this explicitly.
The federal guidance accompanying the new thresholds states that "offering a higher wage to temporary foreign workers isn't sufficient to qualify under the stream for high-wage positions" and "adjusting the offered wage to fit a specific program stream or to avoid a program requirement could lead to a negative LMIA decision."
Employment and Social Development Canada (ESDC), which assesses LMIA applications, will evaluate whether the wage is consistent with what Canadian and permanent resident workers in the same role and location are earning. That's where a wage increase can create collateral problems.
“It becomes a little bit tricky as well in that sense that you're trying to benefit potentially from the high-wage stream, but you still have to fall in line with the prevailing wage offered to other employees,” says Schemitsch. “It becomes a little bit difficult to navigate, it becomes a bit of a balancing act."
When the median wages also increase across the province, employers can often make the argument that they're just trying to increase the wage to keep in line with the prevailing wage, she says.
“It really kind of depends how much you may have to increase. If you’re just kind of on the line and you've just fallen below the threshold, a minor increase may not be that much cause for scrutiny,” says Schemitsch.
“When we are talking about a significant increase, that then leads to a question of, ‘Well, why isn't a Canadian or permanent resident being offered the same wage?’ Then, we might get into more of an issue and then a greater degree of scrutiny.”
Knock-on effect on morale
MacGregor says another consideration for employers is how far the government will investigate.
“Will officers want to go further behind what's happening in the workplace? I think that's a potential concern... What are others in the workplace with the same skills making? And is there a discrepancy? I think that is something you've got to keep in mind.”
He also cites the potential impact on workplace dynamics that employers often underestimate.
"I always have that conversation with employers as well: ‘If you do this, what's the knock-on effect potentially of morale in the workplace? Employees talk. And if someone on the other side of the office in the same position is suddenly getting 20% more, isn't that going to cause potential internal issues?"
MacGregor recommends a “common-sense smell test” in approaching the application.
"[Think about] what the officers might be applying, and I think they're going to ask a lot more questions if they see a big jump for an occupation whose regular prevailing wage under the data isn't nearly at that threshold wage amount."
He also points out that the prevailing wage isn't always the Job Bank median — a nuance many employers miss. Under the program's definition, the prevailing wage is the higher of either the Job Bank median or the wage range an employer is already paying current employees in the same role and location.
"In theory, if everyone's salary who have the same skills in that NOC code — if they're all going to that threshold, I think it's very difficult for an officer to say, ‘This is out of whack’ because everyone is benefiting from this higher wage," he says.
Low-wage option narrowing fast
For many employers in larger cities, the question of wage increases may be moot. The low-wage stream has been effectively closed in most census metropolitan areas (CMAs).
"Because of the way they've designed it now, low wage is not available in most metropolitan areas because most metropolitan areas have unemployment rates of over 5.9%," says MacGregor.
He notes that the 20% premium itself represents a relatively recent methodological shift. The threshold used to be set at the simple provincial median wage. When ESDC changed the formula to add 20% on top of that median, the effect was to push the cutoff upward — shrinking the number of positions that could qualify as low wage even before the CMA unemployment restrictions arrived.
"The major change occurred when they changed how they decided between low wage and high wage, and it used to be there’s a provincial average… there's the average, there's the threshold in Ontario — and then they put a 20% premium on that… So, it narrows the number of low wage you have naturally."
Schemitsch sees the same dynamic playing out with her clients.
"More employers are going to have to look at the high-wage option, especially if they're in a bigger city, because of the restrictions on the low-wage LMIA in certain census metropolitan areas."
‘Pretty significant’ changes each quarter
What complicates matters further is that the list of affected CMAs isn't fixed. The unemployment data that determines eligibility is updated quarterly — meaning an employer whose city falls below 6% in one quarter may find themselves shut out in the next. And the low-wage stream now requires eight consecutive weeks of job advertising, compared to four weeks for the high-wage stream.
The changes can be “pretty significant” from quarter to quarter, says MacGregor, so employers can’t assume what was true 12 months ago is still true.
“They now say you have to do eight weeks of advertising. So, if you're an employer looking at these three-month windows, [you think], ‘Oh, suddenly I can do it, but I’ve got to start right away to get the eight weeks in. I have to apply while in that quarter, in that three months, while the unemployment rate is below 6%.’ And so if you're one of these places where it goes up and down, you might have this very small window."
Processing times add to pressure
Compounding the complexity is the growing gap between when an LMIA application is filed and when a decision arrives.
MacGregor says processing times have stretched significantly — from around 50 business days earlier this year to figures approaching 80 or more. That lag creates a problem for employers trying to renew work permits for existing employees, because Immigration, Refugees and Citizenship Canada (IRCC) has signalled that work permit extension applications not backed by a positive LMIA decision within 90 days may be refused.
"I’ve started warning employers ‘If you want to renew this person and they need an LMIA, start [ahead] nine, 10 months — you've got to figure it out early on because the LMIA is taking so long,’" he says. "It'll kick over. You won't be able to apply for the work permit extension until you get it."
Even escalating a stalled file has become difficult. MacGregor notes that the ESDC call centre cannot flag applications for follow-up until 25 weeks have passed since filing — a threshold that in practice exceeds the processing times ESDC itself publishes.
"It's bizarre," he says. "And so the call centre says, 'Sorry, we can't escalate it to anyone. We've got it, don't worry about it.'"
What employers should do now
The advice from both lawyers is straightforward: don't treat a previously successful application as a template, and don't assume the rules haven’t changed.
"For employers who are already maybe familiar with the process, they should keep an eye on the changes and assess whether or not it makes sense for them," says Schemitsch. "Just because you had one successful application, that doesn't necessarily mean that you can copy the same thing again."
MacGregor agrees, saying that if you're an employer that doesn't do many LMIAs, you can't rely on what worked 12 months ago.
"You’ve always got to go back every time and look at ‘Have there been changes?’ Look at the guidelines… because what you did last year might not work the same way this year."
The broader trajectory, both say, is toward tighter rules and higher bars. Canada has stated publicly that it intends to reduce the number of temporary foreign workers — and the regulatory changes of the past two years have been an effective mechanism for doing exactly that.
“On the IRCC side and on the ESDC side, some of the changes have been to meet those reduced targets. And then we'll see if there's a boomerang effect — because did it go too far and now there's a greater shortage? We'll see."
