The Increasing Burden on Canadian Businesses

Meurrens LawImmigration Trends

The following article appeared in the March 2015 edition of The Canadian Immigrant.

Canada’s government views itself as being a government that has reduced administrative burdens for Canadian businesses. Indeed, the House of Commons recently passed legislation that states that every new regulation that imposes a new administrative burden on Canadian business must result in an existing regulation being amended or repealed. Under its Red Tape Reduction Action Plan, the Canadian government has announced that it is committed to streamlining the regulatory approval processes and reducing reporting requirements and information demands.

Canadian employers of foreign nationals and prospective immigrants can be forgiven for viewing these proclamations and pronouncements with skepticism.

Administrative burden of the LMIA regime

Since 2013, the now-called Employment and Social Development Canada (ESDC) has made the labour market impact assessment (LMIA) regime excessively administratively cumbersome.

ESDC has increased the LMIA application fee from $0 to $275 to $1,000. It has introduced exceedingly more stringent recruitment requirements on employers wishing to obtain LMIAs to permanently retain their foreign workers and help them transition to permanent residency. For reasons that I still don’t understand, ESDC has decided to not publicize some of its recruitment requirements, a decision which has resulted in many employers conducting recruitment and submitting applications that are guaranteed to fail.

In April 2014, ESDC imposed a moratorium on most LMIAs from the food services sector, and suspended existing LMIAs. In June 2014, it introduced LMIA foreign worker caps that took effect immediately. Since June 2014, ESDC has quietly changed numerous LMIA requirements by simply editing its website, and not providing any notice to employers that a change had been made.

Contrary to the Red Tape Reduction Action Plan, ESDC’s new compliance regime has greatly increased the documentation requirements of employers utilizing the LMIA system. Employers must keep all documents related to their LMIA applications, including resumés, for six years. Most employers can expect ESDC to randomly audit them, during which the employers will have to provide extensive documentation about their business to ESDC, including even tracking down paystubs. Incredibly, ESDC compliance audits are done exclusively by mail. The result is that a process that could take days often takes months.

It is not surprising that in 2015 the Federal Court stated that ESDC’s requirements were increasing the costs of hiring, training and scheduling workers.

When the Government of Canada introduced the amendments to the Immigration and Refugee Protection Regulationsthat resulted in the new LMIA system, it stated as part of its stated commitment to reducing the administrative burden on businesses that it had concluded that the administrative burden and cost to employers of the new LMIA regime was (excluding the increase to the LMIA application fee) only a combined total of $21 per business. Employers who are rummaging through filing cabinets locating resumes that they received five years ago can be forgiven for being skeptical of this claim.

Administrative burden of express entry

While the stated $21 per business administrative burden for the overhaul to the LMIA system is questionable, the Government of Canada’s statement that the introduction of the express entry system does not result in any administrative cost to businesses is laughable.

Prior to the introduction of express entry, the administrative cost of Canadian employers wishing to retain their skilled foreign workers on a permanent basis was generally limited to the employers providing reference letters for Canadian experience class applications.  Under express entry, however, almost all prospective economic immigrants must have either a provincial nomination certificate, or a job offer supported by a LMIA, in order to immigrate to Canada.  The administrative burden to employers, especially those who have to obtain a LMIA, is much greater than it was before express entry.

Employers who are currently commencing recruitment for LMIAs, or supporting provincial nomination program applications, in order to ensure that their current employees can be retained on a full-time and permanent basis can be forgiven for not believing the Government of Canada’s statement that express entry does not impose any burden on them.

Frustration is no surprise

Since 2013, ESDC and CIC have greatly increased the administrative burden to Canadian businesses. The regulatory approval process for Canadian employers seeking to employ foreign workers and prospective immigrants soared, as did reporting requirements and information demands. While there may be legitimate policy reasons for ESDC’s and CIC’s changes, the Government of Canada should not be surprised when employers react with frustration to claims of a streamlined administrative environment.