The LMIA process of Canada was subject to two crucial changes in August 2026 in conjunction with the increasing importance of the work location and business authenticity criteria in relation to the employment of temporary foreign workers under the Temporary Foreign Worker Program.
On August 18, 2026, Employment and Social Development Canada amended the calculation of the low wage workforce cap limit for employers who have less than ten employees at the specific work location.
Immigration, Refugees and Citizenship Canada introduced an extension of the concurrent processing grace period from sixty to ninety days for certain in-Canada work permit applicants whose LMIA from the employer is still pending, as of August 21, 2026.
In addition to the above-mentioned changes that came into effect on specific dates, the current LMIA criteria continue to emphasize the work location, the workforce there, and the business genuineness of the employer.
This article highlights all the developments, provides comparisons of the old and new criteria, illustrates practical examples, and answers the most frequent employer queries about the LMIA eligibility in 2026.
1. New Low-Wage LMIA Cap Calculation
The ESDC has made an update to the Program Requirements for Low-Wage Positions page on August 18, 2026. It has introduced a variation where the low wage cap is calculated based on the location of work for organizations having less than ten employees at that work location.
Service Canada considers ten as the number of workforce members in its calculation of cap even when there is less than that number at that work location.
The consequence of the variation is that the eligible employers are able to employ a maximum of one low wage temporary foreign worker for the location capped with the 10% cap or two low-wage temporary foreign workers for locations capped with the 20% cap in the construction, food processing, hospital, nursing, residential care facilities, and certain in-home caregiver occupations.
Who Counts Toward the Workforce at a Location
According to ESDC, the total number of employees in a particular workplace is the sum of all full-time and part-time workers in the workplace and includes Canadians, permanent residents, temporary foreign workers who were hired through the LMIA process, other foreign workers with different kinds of work permits, and those workers who are not currently working but are anticipated to come back to work in future.
A full-time worker is a worker who works at least 30 hours in a week.
A part-time worker is a worker who works less than 30 hours per week and is calculated as 0.5 worker.
The total number of workers also includes vacant jobs for temporary foreign workers requested in the LMIA application form and temporary foreign workers who were previously approved by the LMIAs but have not started their employment yet.
Why This Matters for Multi-Location Businesses
Prior to this change, the alternative computation for employers with fewer than ten workers has typically been computed using the employer’s entire national labor force.
It is particularly important for companies with multiple sites and with a small number of workers such as a chain of restaurants with different branches having seven or eight employees each.
In the past, a multi-site company with more than ten workers in total would fail to satisfy the small business requirement and would thus be ineligible to the alternative calculation in any site.
With the changes introduced through the August 18, 2010 amendment, each site with fewer than ten workers will individually qualify for the alternative computation and hire one or two low wage TFWs.
Practical Example: How the New Cap Works
For example, assume a cleaning firm that has three offices in Ontario, with seven full-time staff in each, making a total of twenty-one workers nationally.
Under the old interpretation, this employer was ineligible for the small-employer variation since the number of employees was more than ten.
With the new change as of August 18, however, each office is now eligible for the low-wage foreign workers program on its own basis, since each office has fewer than ten employees.
Assuming that the position is a low-wage position and does not exceed the provincial wage threshold and also is within the 10% cap category, then the employer can hire one low-wage TFW in each office, totaling three low-wage foreign workers nationally.
However, should this be a position within sectors that fall in the 20% cap category, for example, construction, food processing, or nursing and residential care, the employer would be able to employ two low-wage TFWs per office.
Cap Calculation Comparison Table
| Factor | Before August 18, 2026 | After August 18, 2026 |
|---|---|---|
| Unit of measurement | Employer’s total national workforce (for the small-employer variation) | Workforce at each individual work location |
| Threshold for variation | Fewer than 10 employees overall | Fewer than 10 employees at a given work location |
| Cap calculation uses | A deemed workforce of 10 (applied once to the employer) | A deemed workforce of 10 (applied independently per location) |
| Max low-wage TFWs (10% cap) | 1 across the employer | 1 per qualifying location |
| Max low-wage TFWs (20% cap) | 2 across the employer | 2 per qualifying location |
| Multi-location employer with 7 staff per site (3 sites, 10% cap) | Did not qualify if total exceeded 10 | Up to 1 low-wage TFW per site (3 total) |
| Part-time employee counting | 0.5 of an employee | 0.5 of an employee (unchanged) |
Positions that are exempt from capital expenditure requirements such as on-farm primary agriculture, some caregiving positions, short-term positions lasting less than 120 days, and seasonal industry positions up to 270 days have not been affected by this change.
2. IRCC Extends Processing Grace Period to 90 Days
The officer’s instructions for the Labour Market Impact Assessment Review page by IRCC were updated on August 21, 2026, to increase the number of concurrent processing days from sixty to ninety.
Concurrent processing permits some foreign nationals, who have already entered Canada, to apply for a Temporary Foreign Worker Program work permit while the decision on their employer’s LMIA is still pending, if they meet the criteria.
According to the new instructions, IRCC will keep the work permit application for ninety days from the date of the application, within which time the foreign national will be able to provide evidence of a positive or neutral LMIA decision.
Eligibility Conditions: This Is Not a Blanket Rule
Such a generous grace period can be granted in case the following conditions are fulfilled at once:
At the moment of applying for a new work permit, the expiry date of the work permit held by the foreign national is two weeks away or less.
The LMIA application submitted by the employer has been completed.
There is enough time in between, which means that the employer had applied for the LMIA in advance of the processing time frame of LMIA applications.
The LMIA application has not yet been decided at the time of the submission of the work permit application.
Critical warning from IRCC: Employers must avoid applying for an LMIA application just before applying for the work permit application and assume that IRCC would process both applications concurrently.
IRCC has clearly stated in its officer instructions that applications which applied for LMIA application at the last minute will be treated exceptionally.
How Concurrent Processing Works in Practice
In case the in-Canada work permit application qualifies for concurrent processing, the officer reviewing the application at IRCC suspends the decision pending the ninety days’ duration.
Within this period, the applicant may amend their application by providing evidence of either a neutral or positive LMIA from the employer.
After the ninety days are over, the officer resumes consideration of the application to give the final decision concerning the work permit.
Where there is no positive LMIA supplied by the applicant within the ninety days’ period, the case will be considered on the basis of the information that will have been submitted, which in most cases will lead to rejection because the LMIA is an obligatory document as stipulated under paragraph R10(1)(c).
Moreover, IRCC indicates that where the applicants require concurrent processing, the code to be entered in the Job Title field of IMM 5710 is CPTS2026, although it is not meant to influence the officer’s decision making.
Concurrent Processing Comparison Table
| Detail | Before August 21, 2026 | After August 21, 2026 |
|---|---|---|
| Grace period length | 60 days from submission | 90 days from submission |
| Applies to | In-Canada work permit applications under R199 | In-Canada work permit applications under R199 (unchanged) |
| Work permit expiry requirement | 2 weeks or less remaining | 2 weeks or less remaining (unchanged) |
| Application filing requirement | The employer must have submitted a complete LMIA with sufficient lead time | The employer must have submitted a complete LMIA with sufficient lead time (unchanged) |
| Last-minute LMIA filing | Assessed on an exceptional basis | Assessed on an exceptional basis (unchanged) |
| LMIA decision status | No decision yet made | No decision yet made (unchanged) |
| Quebec applicants | Must also provide CAQ if required | Must also provide CAQ if required (unchanged) |
Practical Example: When Concurrent Processing Helps
A low-wage food service job is being applied for by the employer in the province of British Columbia during early May 2026.
The expiry date of the existing work permit of the employee is September 5, 2026, and no decision has yet been made by ESDC.
On August 25, the employee applies for the in-Canada work permit renewal, and evidence has been provided that their permit expires within two weeks, that the LMIA was made well before the processing time, and there is no decision yet made.
IRCC keeps the application pending for a period of ninety days and the applicant can provide the positive LMIA until late November.
In the event that ESDC has provided a positive LMIA by October, and the applicant submits the document, then the officer can go ahead to process the work permit.
However, in the case of the sixty days window, the very same applicant would have up to late October, which is thirty days less than the current one.
Employers Face Greater Scrutiny Over Work Locations
Legitimacy of business and work location were always components of LMIA evaluation process.
The criteria set by ESDE for evaluating business legitimacy included, among other, proof of business offering goods or services in Canada; job offer made by the employer must be consistent with reasonable need; the employer should be able to comply with terms of job offer, particularly, salary; there should be no compliance issues in regard to the employer.
What has changed in terms of enforcement in recent cycles was a focus on practical criteria such as particular work location, workforce associated with that location, and documentation to support the above.
Why the Work Location Now Carries More Weight
A number of related regulations have made work location important for various aspects of the LMIA evaluation process.
Low-wage caps are calculated with respect to the workforce at a particular work location, as was stated in the August 18 update mentioned earlier in this paper.
Prevailing wage varies from occupation and local Job Bank region, whereas high- or low-wage stream classification of an LMIA is based on comparison of the offered wage against the corresponding provincial or territorial wage threshold.
Payroll information may be requested to confirm the size of the workforce at a particular work location.
The employer compliance inspection system, with fines nearly doubling in the last fiscal year, may involve workplace verification.
What Employers Should Be Prepared to Substantiate
Providing just an address for the LMIA application alone does not prove that the place of employment and work proposed is real.
The employer must be ready to prove the following: where the employee would be performing the work, the employees that the employer would have at this place of business, the reason for needing this employee, and that the employer is truly in business in Canada.
Business Legitimacy Documentation
Companies that do not have a positive LMIA in the last two years will need to provide the following documents to prove their legitimacy.
The main document asked for by ESDC is a legitimate municipal business license, which may include any necessary permit or license to conduct business.
In cases where no municipal business license is available in the jurisdiction of the company, there are other options like T4 Summary of remuneration paid, T2 Schedule 100 and 125 for corporations, or PD7A Statement of account for current source deductions and any other document that proves the company is in existence and offering goods or services in Canada.
Service Canada will consider alternatives on a case-by-case basis.
Those employers who had been awarded a favorable LMIA in the last two years will not be obliged to resubmit these papers, but Service Canada is always entitled to ask for more evidence.
The main principle here is honesty: an employer should honestly state where the worker will do his/her work, prove that the job is a genuine labor requirement and that the company really exists and works in Canada.
However, the August 2026 LMIA policy modifications in Canada make the submission process easier for certain employers; yet, the importance of the accuracy of information regarding the place of employment and good planning remains significant.
Employers and foreign workers have to analyze carefully the newest guidelines by ESDC and IRCC, especially when they are involved in low-wage occupations, pending assessments or several places of employment.
As the rules and policies regarding LMIA remain constantly changing, applicants have to be sure about the most recent federal requirements.
