Increasing LMIA processing times are undermining work permit extensions

Employers that rely on the Temporary Foreign Worker Program (TFWP) to retain skilled temporary foreign workers (TFWs) via high-wage or low-wage stream Labour Market Impact Assessments (LMIAs) are facing a growing crisis.

The convergence of sharply rising LMIA processing times at Employment and Social Development Canada (ESDC) and Immigration, Refugees and Citizenship Canada’s (IRCC’s) stricter application of its 90-day refusal guideline for work permit extension applications awaiting a pending LMIA is producing a wave of refusals.

Employers need to be aware of the situation and start LMIA applications well in advance to avoid disruptions.

This article provides information on the issue and how employers and TFWs can avoid the issue or try to mitigate its impact.

LMIA-based work permit extensions and the “90-day rule”

Employers hoping to extend the status of TFWs already working in Canada must often first obtain an LMIA from ESDC to ground a work permit extension (WP EXT) application.

Once a positive LMIA is issued by ESDC, it can be used by the TFW to apply for a WP EXT within Canada.

If the WP EXT is filed prior to the end date of the current work permit, the TFW will have maintained status to continue to work in Canada beyond the validity of the work permit (under its terms and conditions) until the WP EXT decision is rendered by IRCC.

IRCC recently updated its policy regarding WP EXT applications and pending LMIAs.

The guidance states that the TFW cannot file a WP EXT that will rely on an LMIA without the LMIA decision in hand, unless the current work permit has less than two weeks of validity. If in that two-week window, the WP EXT can be filed with proof that the employer has previously applied for an LMIA that remains pending.

However, IRCC may refuse the WP EXT application if the LMIA decision is not issued within 90 days of the filing of the WP EXT.

IRCC is now regularly applying this guideline, leading to more refusals. WP EXT applications that might once have sat in the IRCC processing queue long enough for the LMIA to arrive are now being adjudicated, and refused, before ESDC has completed its assessment.

This may help IRCC reach its goal of decreasing the number of temporary residents in Canada, but it means that employers risk losing valuable skilled workers. Meanwhile, ESDC has dramatically increased LMIA processing times, which jeopardizes WP EXT applications that are awaiting LMIA decisions.

The high-wage and low-wage LMIA processing time crisis

The risk is compounded by a significant increase in ESDC’s LMIA processing times over the past six months.

High-wage LMIA stream processing times — ESDC monthly data

Low-wage LMIA stream processing times — ESDC monthly data

ESDC publishes the prior month’s national average processing times (not an up-to-date figure). The times shown represent the average number of business days required to process LMIAs that were decided in the reporting month. Always check the website for the latest data.

The consequences of a WP EXT refusal

When a WP EXT is refused under these circumstances, the consequences for both the employer and the TFW are severe.

Upon refusal, the TFW’s maintained status ends. The worker loses status and must stop working immediately.

A TFW may apply for restoration of status within 90 days of the refusal. However, they cannot work until a new work permit is obtained. Moreover, a restoration application requires that the TFW demonstrate they meet the requirements for a new work permit, which, for an LMIA-dependent worker, means the new LMIA should ideally be in hand before the restoration application is filed.

An alternative for some TFWs is to leave Canada and apply for a new work permit from abroad once the LMIA is issued. If the TFW is a citizen of a visa-required country, they must apply online for a new work permit. TFWs who are visa-exempt may be able to apply for the new work permit at the port of entry.

Ultimately, these refusals disrupt the employer’s operations and access to skilled labour, cause delays, increase applications, and disrupt the life of the TFW and any accompanying family members.

A manufactured crisis?

IRCC seems to be more aggressively applying the 90-day refusal guideline, just as ESDC’s LMIA processing times have increased significantly.

Employers who filed LMIAs several months ago may have thought that there was enough time for the LMIA to be processed before the WP EXT was reached, based on ESDC’s posted processing times.

The net result is that employers who are trying to follow the proper channels to retain skilled foreign workers can face significant consequences. The refusal of a WP EXT does not make the employer’s labour need disappear. It simply forces the employer and worker to engage in additional applications, pay additional fees, endure additional delays, and navigate additional uncertainty. Restoration applications, new filings, offshore work permit applications: these are administrative costs imposed on employers and TFWs by a system that can create additional hurdles rather than facilitate the process.

Practical takeaways

Employers should consider the following:

1. File LMIA applications as early as possible.

   The number one takeaway is to file high-wage or low-wage LMIAs far in advance of the work permit expiry, ideally at least six months or more ahead. This will avoid the risk of a refusal due to the “90-day rule” as the LMIA would be in hand and would be filed with the WP EXT application.

2. Audit your TFWs.

   Employers should review any TFWs they have well in advance of the work permit end date to assess whether an LMIA will be needed in order to start that process or if other work permit categories are available.

3. Understand the 90-day refusal risk.

   If an LMIA is unlikely to be issued within 90 calendar days of filing the WP EXT, the extension application is at serious risk of refusal.

4. Ensure TFWs advise of any WP EXT refusals.

   If you have TFWs who are filing their own WP EXT based on a pending LMIA, you must ensure they understand that they must advise you if they receive a refusal letter from IRCC regarding the WP EXT. They must stop working immediately if they receive a refusal while on maintained status. Working without authorization would create additional problems for the TFW and for the employer.

5. Plan for contingencies.

   Employers should have a strategy in place in the event of a refusal. There should be an operational strategy (if the TFW must stop working, what will you do?) and an immigration strategy (will you support a restoration application or a new work permit application filed outside Canada?).

6. Monitor processing times.

   Review ESDC’s monthly update on processing times if you have pending LMIAs or if you need to apply for LMIAs to extend work permits.

7. Seek legal advice early.

   The interplay between ESDC and IRCC processing timelines creates a moving target that requires careful strategic planning for each individual case. In addition, an early review may allow other LMIA-exempt work permit options to be identified.

How Gowling WLG can help

Gowling WLG’s Immigration Group can help employers assess how these changes may affect their TFWs, plan for upcoming work permit expiries, and develop strategies to manage potential refusals and other immigration risks.

For advice on your organization’s specific circumstances, please contact a member of Gowling WLG’s Immigration Group.