LMIA Exemption Code C-60

Steven MeurrensBusiness and Entrepreneur Immigrantion

On December 15, 2022, Immigration, Refugees and Citizenship Canada (“IRCC”) updates its Labour Market Impact Assessment (“LMIA”) exemption codes.  An LMIA is an opinion from Service Canada that the entry of a foreign worker will have a positive or neutral impact on the Canadian labour market.  To obtain a positive LMIA employers must generally recruit for four weeks on prescribed websites, invite potentially qualified Canadians to apply, pay prevailing wage, and demonstrate other labour market benefits. The process is often difficult.

Because of this, and other reasons, Canadian immigration legislation permits IRCC to issue work permits in certain circumstances without employers needing to obtain LMIAs. These are known as LMIA exemptions.

For the most part the December 15, 2022 changes involve renumbering some of the LMIA exemptions and splitting previous LMIA exemptions into several categories.  Future changes are expected. There were, however, important changes to the LMIA exemptions for provincial nominees in business programs and other entrepreneurs.  These changes involve the introduction of “significant benefit” tests.

Significant Benefit

IRCC has always had an LMIA exemption for individuals whose work in Canada would generate significant economic, social or cultural benefits.

Generally, economic benefits are benefits that would contribute to a company’s growth, expansion or continuation that have fiscal benefits and allow for the competitive advantage of Canada’s business community. Social benefits are where someone’s work will provide significant external benefits to other third parties not directly involved in business transactions. Culture is defined as creative artistic activities and the goods and services produced by it.

Significant includes, but is not limited to, an assessment of how the work of a foreign national will provide general economic support for Canada, advancement of Canadian industry, increased health and well-being or increased tolerance or opportunities to come together with others of similar culture.

The IRCC website provides examples of all of the above. It cautions that visa officers should be reluctant to issue work permits under the category, but also notes that where an LMIA is not available, and the balance of practical considerations indicates that the work of a foreign national would be of significant benefit to Canada, economically, socially, or culturally, then a work permit can be issued without the LMIA.

Provincial Nominee Entrepreneurs

Prior to December 15, 2022, prospective provincial nominees who were issued work permit support letters by a provincial government to be entrepreneurs in a province did not need to also demonstrate that their work in Canada would generate a significant economic, social or cultural benefit.

This is no longer the case.  Now, under a new LMIA Exemption Code C-60, entrepreneurs applying for work permits under provincial nominee programs will generally need to demonstrate that their proposed work will provide general economic stimulus or the advancement of Canadian industry.  They will also need to provide business plans which show that they have the experience to manage the business, the language abilities needed to operate the business and that their work will be of significant benefit.  Provincial letters of support may be indicative, but IRCC will now it seems essentially be reassessing provincial nomination applications.

The consequence of this change is significant, and could potentially reduce the attractiveness and predictability of provincial nominee entrepreneur programs. The change is recent and has not been widely publicized. Those considering applying to provincial entrepreneur programs, as well as those who may represent them, need to understand the new LMIA Exemption Code C-60.

Weight of Provincial Letters of Support

In Shang v. Canada (Citizenship and Immigration), 2021 FC 633, Madam Justice Kane determined that if a visa officer is to refuse a provincial nominee’s work permit application, and that provincial nominee presented a work permit support letter, then the decision will be unreasonable if an officer does not explain why they are not giving significant weight to the provincial nomination.

In Yang v. Canada (Citizenship and Immigration), 2023 FC 954, Justice Favel, applying Shang held that the following refusal reasons were justifiable in refusing a provincial nominee work permit applicant:

File reviewed. C11 case. Client is seeking a LMIA-exempt WP as an entrepreneur. PA wants to establish an exporting business in PEI that will focus on food products. I note that client has obtained a support letter from PEI, which state they are interested in nominating her as a provincial nominee.

However I note that they have chosen to keep her as a prospective nominee rather than an actual one, as they would like to see how and if she sets up a business in their territory.

I have reviewed client’s business plan. I note that it is dated June 2021; it appears client has not modified it since her first WP refusal in 2021. Client could have taken this opportunity to provide additional information.

I note the following points from the business plan and other documents on file:

– Client does not intend to hire a number of Canadian citizens or PRs

– Client has not previously visited PEI: she is thus establishing a business plan without having first-hand experience of the market where she wants to open a business.

From the documents on file, it seems like most research was conducted online. She does not appear to have business partners/contacts in Canada that could do some research for her. While this is not mandatory for an entrepreneur, previous trips to Canada or contact lists would show that there are already some partnerships/ties established.

– I also note client’s English language skills are intermediate (B2).

The client’s business plan states the following: “Ms. Yang will face tough competition from other Canadian exporters, as well as other international exporters, all competing to supply the Chinese markets with high quality products. Atlantic Canada Export lists over 100 companies who export Atlantic Canadian seafood to Asia. Some of the well-known local food exporters are (LIST OF NAMES) (…) The above operators from PEI are also agriculture growers and processors.”

It is unclear from the documents on file what skills or other advantages client has to distinguish herself in this already crowded market.

With the info in front of me, it is difficult to conclude that her business plan is viable and that client is a good position to be successful in this competitive market.

While I have put some weight on the provincial assessment that her business plan is viable, I note that the province has not elected to give her a provincial nomination right away as they would want to see how she sets up the business first.

Moreover, I have to consider whether her business in Canada would provide “significant benefits” to Canada. As discussed above, she has no intention to employ residents of Canada, at least not for the foreseeable future. She also wants to start a business in an already crowded market, with investments limited at a few millions $CAD.

On balance, I am not satisfied client has demonstrated that their admission to Canada to begin establishing or operating their business may generate significant economic, social or cultural benefits or opportunities for Canadian citizens or permanent residents pursuant to paragraph R205(a).

This application is refused. Accompanying family members will be refused accordingly.

[UPDATE] – February 21, 2024

On February 16, 2024, IRCC updated its instructions to state:

Provinces and territories have amended their work permit support letters to demonstrate that they are satisfied the applicant applying for an entrepreneur work permit has or will create a genuine business, has a viable business plan, and has demonstrated that their business will create or maintain significant cultural, social or economic benefit for the province or territory in which they plan on residing.

With these assurances that the significant benefit test has been met, officers can focus on section R200 requirements, including the requirement that the applicant intends and has the ability to perform the work sought, and that the foreign national will leave Canada at the end of the period authorized for their stay. The instructions below have been updated with details for officers on the significant benefit review undertaken by the provinces and territories and the support letter issued as a result.

In addition, the Government of Quebec is also extending the length of time Quebec-destined entrepreneurs or self-employed people who have been issued a Quebec Selection Certificate (CSQ) may be issued with a work permit. The length of time has been increased from 2 to 3 years.