The black market for LMIA jobs in Canada has reached record levels

The black market for Labor Market Impact Assessments (LMIAs) in Canada has reached unprecedented levels due to the growing demand for jobs supported by LMIAs.

The surge is reportedly the result of a new government policy aimed at reducing immigration targets and limiting the number of temporary residents in the country.

According to Immigration News Canada (INC), CBC investigations have revealed a marked increase in LMIA job postings from unauthorized recruiters, agencies and intermediaries offering foreign nationals LMIA-supported jobs at high prices.

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

The LMIA process is intended to ensure that the employment of foreign workers does not have a negative impact on the Canadian labor market. For foreign workers, LMIA-supported work can help them obtain a work permit and can also provide points to apply for permanent residence through Canada’s immigration programs such as Express Entry.

Why LMIA jobs are in high demand

Securing LMIA-supported work can add 50 points to an applicant’s CRS score, making it a valuable option for temporary residents hoping to improve their residency prospects. With the federal government’s plan to reduce available permanent housing, this incentive has become stronger, leading to increased demand and the risk of exploitation on the black market.

LMIA black market activity on the rise

Reports show that between July and September 2024, a CBC investigation found a significant increase in LMIA job postings, particularly in Canadian cities with large immigrant populations, such as Brampton, Ontario. During this period, the number of job advertisements on the LMIA Internet increased significantly, from 29 in July to 97 in September.

The surge, INC said, is likely due to recent government moves to limit LMIA permits in cities with high unemployment.
Under these restrictions, LMIAs are now focused on sectors facing acute labor shortages, such as health care and construction. However, the resulting demand has fueled black market activity as many temporary residents seek LMIA-supported employment to improve their chances of obtaining permanent residency in Canada.

The high cost of LMIA jobs on 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-supported positions.

Some employers, along with 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 their way to work permits and sometimes permanent residency.
Many temporary residents pay these fees out of necessity or in the hope that it will eventually lead to permanent residency.

However, this practice circumvents the formal immigration process, putting workers at risk of exploitation and undermining the integrity of the Canadian labor market.

Unethical Black Market Practices LMIA

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

Fraudulent job offers: Some people create fake job offers to meet LMIA requirements without intending to fill the relevant positions. This practice affects the integrity of the Canadian labor market, as many of the listed positions exist only to meet the LMIA criteria.
Underpayment and exploitation of workers: Some workers hired through the LMIA system receive below-standard wages and, fearing deportation, may accept poor working conditions in order to maintain their work permits.
Unlicensed brokers and consultants: Unregulated immigration agents charge high fees for assistance with LMIA applications, acting as intermediaries between employers and foreign workers, further increasing costs for job seekers.

Government actions and calls for reforms

Employment and Social Development Canada (ESDC), which issues the LMIA, announced on October 21 that it will step up efforts to address LMIA abuse, according to reports. The ESDC plans to work with provincial and territorial governments to increase data sharing, strengthen vetting of job offers and investigate non-compliance, potentially imposing penalties on violators.

However, some critics say more resources are needed to address the scale of the problem. The ESDC does not disclose how many agents are involved in LMIA investigations and does not provide specific updates on actions against illegal sellers, encouraging greater transparency.

Growing demand and limited options for temporary residents

Canada’s temporary resident population is set to grow rapidly, rising from 1.3 million in 2021 to an estimated 2.8 million by mid-2024. With limited paths to permanent residency, many temporary residents look to LMIA-supported work as a last resort to increase their chances of staying in Canada.

To address these concerns, some experts suggest eliminating the residency maintenance aspect of LMIA positions in the CRS, while others call for improved reporting mechanisms to protect workers from LMIA fraud. Increased penalties for unauthorized LMIA sellers and increased workers’ mobility rights are also proposed as a means of reducing exploitation.

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