Canada’s black market for Labour Market Impact Assessments (LMIAs) has reached unprecedented levels, driven by rising demand for LMIA-backed jobs.

This surge,  according to reports, follows new government policies aimed at reducing immigration targets and limiting temporary residents in the country.

As reported by Immigration News Canada(INC), CBC investigations have uncovered a marked increase in LMIA job advertisements from unauthorized recruiters, agencies, and intermediaries, who are offering LMIA-backed positions to foreign nationals at high prices.

LMIA jobs refer to positions in Canada that require LMIA approval for a foreign worker to be hired. An LMIA is a document issued by Employment and Social Development Canada (ESDC), allowing Canadian employers to hire foreign workers when they cannot find qualified Canadian citizens or permanent residents to fill the job.

The LMIA process is meant to ensure that hiring foreign workers will not negatively affect the Canadian labour market. For foreign workers, an LMIA-backed job can help in securing a work permit, and it may also provide points toward permanent residency applications through Canada’s immigration programs, such as Express Entry.

Why LMIA jobs are in high demand

Securing an LMIA-backed job can add 50 points to an applicant’s CRS score, making it a valuable option for temporary residents hoping to enhance their residency prospects. With the federal government’s plan to reduce available permanent residency slots, this incentive has grown stronger, leading to increased demand—and increased risk of exploitation in the black market.

Rise in LMIA black market activity

Reports reveal that from July to September 2024, a CBC investigation identified a major increase in LMIA job advertisements, particularly in Canadian cities with large immigrant populations, such as Brampton, Ontario. During this period, online LMIA job postings climbed significantly, from 29 in July to 97 by September.

• This surge,  INC reports, likely stems from recent government actions limiting LMIA approvals in cities with high unemployment rates.
• Under these restrictions, LMIAs are now focused on sectors facing urgent labor shortages, such as healthcare and construction. However, the resulting demand has intensified black market activity, as many temporary residents seek LMIA-backed jobs to improve their chances of obtaining permanent residency in Canada.

High costs of LMIA jobs in the black market 

Although Canadian law requires employers to cover all LMIA-related costs, INC reports that black-market operators charge temporary residents large sums, often between $20,000 and $40,000, for LMIA-backed positions.

• Some employers, alongside intermediaries posing as immigration consultants, exploit this demand by offering LMIA positions as a way to circumvent the intended function of the LMIA program, essentially allowing individuals to buy a pathway to work permits and sometimes permanent residency.
• Many temporary residents pay these fees out of necessity or in hopes that it will ultimately lead to permanent residency.

However, this practice bypasses the formal immigration process, putting workers at risk of exploitation and undermining the integrity of Canada’s labour market.

Unethical practices in the LMIA black market 

According to INC, the LMIA black market uses unethical tactics that affect both workers and Canada’s immigration reputation.

• Fraudulent Job Offers: Some individuals create fake job offers to meet LMIA requirements without intending to fill the roles. This practice affects the integrity of Canada’s labor market, as many listed positions exist only to fulfill LMIA criteria.
• Underpayment and Worker Exploitation: Some workers hired through the LMIA system are paid below the standard wage and, fearing deportation, may accept poor working conditions to keep their work permits.
• Unlicensed Brokers and  Consultants: Unregulated immigration agents charge high fees to assist with LMIA applications, acting as middlemen between employers and foreign workers, further raising costs for job seekers.

Government actions and appeals for reform 

Reports inform that the department that issues LMIAs, Employment and Social Development Canada (ESDC), announced on October 21st that it will intensify efforts to address LMIA misuse. ESDC plans to work with provincial and territorial governments to increase data sharing, tighten job offer verification, and investigate non-compliance cases, potentially imposing penalties on offenders.

However, some critics argue that more resources are needed to address the scale of the problem. ESDC has not disclosed how many agents are involved in LMIA investigations or provided specific updates on actions against illegal sellers, prompting calls for greater transparency.

Growing demand and limited pathways for temporary residents 

It is noted that Canada’s temporary resident population has grown rapidly, rising from 1.3 million in 2021 to about 2.8 million by mid-2024. With limited pathways to permanent residency, many temporary residents see LMIA-backed jobs as a last-resort method to increase their chances of remaining in Canada.

To address these challenges, some experts suggest eliminating the permanent residency support aspect of LMIA positions in the CRS, while others call for improved reporting mechanisms to protect workers from LMIA fraud. Enhanced penalties for unauthorized LMIA sellers and greater worker mobility rights are also proposed as a means to reduce exploitation.

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