Employers using Canada's Temporary Foreign Worker Program (TFWP) should understand that submitting a Labour Market Impact Assessment (LMIA) application does not necessarily mean the application will be processed.

There are specific situations in which Service Canada may refuse to process an LMIA application.

These situations can arise because an employer is not eligible under the applicable regulations or because public-policy considerations set out in ministerial instructions require certain applications to be refused for processing.

The rules cover several areas, including employer compliance, low-wage position caps, unemployment rates in certain Census Metropolitan Areas (CMAs), some in-home caregiver positions, previous LMIA revocations and certain positions in the Montréal and Laval economic regions.

This article explains the main LMIA refusal-to-process rules and highlights the updated unemployment-rate information that applies from October 9, 2026, to January 7, 2027.

What Does “Refuse to Process an LMIA Application” Mean?

An LMIA is generally used by an employer seeking to hire a temporary foreign worker through the Temporary Foreign Worker Program.

Before an employer can generally proceed with certain temporary foreign worker hiring arrangements, an LMIA may be required to assess the impact of hiring a foreign worker on Canada's labour market.

However, some applications are not processed at all because the employer, position or circumstances fall under a refusal-to-process measure.

This is different from an LMIA application being fully assessed and receiving a negative decision.

In a refusal-to-process situation, the application is not processed because a specific regulatory or policy condition prevents Service Canada from proceeding with it.

Employers therefore need to determine whether their application is eligible for processing before submitting it.

Why Can an LMIA Application Be Refused for Processing?

The rules described by Employment and Social Development Canada identify two broad sources of refusal-to-process authority:

1. Regulatory authority

2. Public policy considerations in ministerial instructions

These categories cover different circumstances.

Some are related to the employer's eligibility, while others relate to the position, location, wage level, sector or previous LMIA history.

1. Ineligible Employers

One major reason an LMIA application may not be processed is that the employer is not eligible to participate in the Temporary Foreign Worker Program.

For example, employers that regularly offer services in certain parts of the sex industry are not eligible under the applicable rules.

This includes businesses that regularly offer services such as:

• Striptease;

• Erotic dance;

• Escort services; or

• Erotic massage.

The rules also apply to employers who appear on the IRCC employer ineligibility list.

Employers on the IRCC Ineligibility List

An employer may appear on the ineligibility list because of previous non-compliance with Canada's employer obligations.

Examples include employers who:

• Have been found non-compliant following an employer compliance review;

• Have been banned from the Temporary Foreign Worker Program following non-compliance discovered during an inspection; or

• Are in default of paying an administrative monetary penalty.

Employers should therefore take their compliance responsibilities seriously.

Non-compliance can affect not only the employer's current situation but also their ability to use the Temporary Foreign Worker Program in the future.

2. Low-Wage Position Caps

Another important refusal-to-process measure concerns the proportion of low-wage positions at a particular work location.

The rules establish limits on the percentage of low-wage positions that an employer can have at a given work location.

For many employers, LMIA applications will not be processed if the proportion of low-wage positions exceeds 10% of the total workforce at the work location.

However, certain sectors, subsectors and occupations are subject to a different 20% cap.

The 10% Low-Wage Cap

For applicable employers and positions, the proportion of low-wage positions at a given work location must not exceed 10% of the total workforce.

If the applicable threshold is exceeded, the LMIA application may not be processed.

Employers should therefore review their workforce composition before submitting an application.

The 20% Low-Wage Cap

Certain sectors and occupations are subject to a 20% threshold instead of the general 10% threshold.

The sectors identified in the policy information include:

• NAICS 23 — Construction

• NAICS 311 — Food manufacturing

• NAICS 622 — Hospitals

• NAICS 623 — Nursing and residential care facilities

Certain in-home caregiver positions are also included under the specified occupational codes.

These include:

• NOC 31301 — Registered nurses and registered psychiatric nurses;

• NOC 32101 — Licensed practical nurses;

• NOC 44100 — Home childcare providers;

• NOC 44101 — Attendant for persons with disabilities, home support worker, live-in caregiver and personal care attendant.

The applicable rules can be detailed, so employers should identify the correct NOC and NAICS classifications before determining which cap applies.

Temporary Measures for Rural Areas

There are also temporary measures that may affect employers located in participating rural areas.

Employers in eligible rural areas within participating provinces and territories may be able to benefit from temporary measures concerning the proportion of temporary foreign workers hired for certain low-wage positions.

This means that employers should not assume that the standard cap applies identically to every location.

The location and applicable temporary measures need to be reviewed before an LMIA application is submitted.

3. Low-Wage Positions in High-Unemployment CMAs

Another major refusal-to-process measure concerns certain low-wage positions located in Census Metropolitan Areas (CMAs) with an unemployment rate of 6% or higher.

The measure applies to certain LMIA applications submitted from September 26, 2024 onward.

Generally, the position must involve a wage below the applicable provincial or territorial wage threshold and be located in a CMA meeting the relevant unemployment-rate threshold.

If the applicable conditions are met, the LMIA application may not be processed.

October 9, 2026 Unemployment Rate Update

The unemployment-rate table used for this refusal-to-process measure is updated every three months.

The latest update was made on October 9, 2026.

The current period applies to applications submitted from:

October 9, 2026 to January 7, 2027.

The next scheduled update is January 8, 2027.

Employers should therefore check the applicable unemployment rate for the relevant CMA based on the date their LMIA application is submitted.

Examples of CMAs With Unemployment Rates of 6% or Higher

Under the current October 9, 2026 to January 7, 2027 period, several CMAs listed in the policy have unemployment rates at or above 6%.

Examples include:

CMA	Unemployment Rate
St. John's	6.4%
Moncton	8.1%
Fredericton	6.2%
Montréal	7.2%
Ottawa-Gatineau	7.9%
Kingston	6.3%
Toronto	7.5%
Hamilton	7.4%
Kitchener-Cambridge-Waterloo	7.6%
London	9.1%
Windsor	7.9%
Calgary	6.4%
Edmonton	7.6%
Vancouver	7.0%
Kelowna	8.6%

These figures are examples from the current table and should not be treated as permanent rates.

The table is updated every three months, so employers must use the rate applicable to the relevant application period.

Not Every Low-Wage LMIA Is Affected

The high-unemployment CMA measure has important exemptions.

Certain occupations and sectors can remain eligible for LMIA processing even when the work location is in a CMA that meets the 6% unemployment threshold.

These exemptions include certain positions in:

Primary Agriculture

Certain occupations under primary agriculture are exempt from this refusal-to-process measure.

Construction

Certain positions under NAICS 23 may continue to be eligible.

Food Manufacturing

Certain positions under NAICS 311 are included among the exemptions.

Hospitals

Certain positions under NAICS 622 may remain eligible.

Nursing and Residential Care

Certain positions under NAICS 623 are also included.

Certain In-Home Caregiver Positions

Specific caregiver occupations may qualify for an exemption under the applicable rules.

Positions Supporting Permanent Residence

Another important exemption applies to positions that support permanent residence only, where no work permit application is being made.

This means the employer and worker situation can matter when determining whether the refusal-to-process measure applies.

Employers should review the exact circumstances of the application rather than assuming that every low-wage position in a high-unemployment CMA will be refused.

Short-Duration and Highly Mobile Positions

Certain short-duration positions can also be exempt.

The position generally needs to be 120 calendar days or less and meet the applicable requirements.

The position must be genuinely temporary or highly mobile.

A genuinely temporary position may relate to:

• A specific short-term period;

• A singular event; or

• A situation where the position will not continue after the worker leaves Canada.

A highly mobile position may involve a workforce that regularly crosses provincial, territorial or international boundaries.

Examples can include:

• Travelling carnival and fair operators;

• Technicians repairing proprietary equipment;

• One-time projects;

• Short-duration events.

Employers requesting this exemption need to submit a written request explaining why the position qualifies.

The request should be identified as an “Exemption request” and uploaded with the LMIA application through LMIA Online.

Requests for positions lasting more than 120 days may be considered only in exceptional circumstances.

How Employers Can Check the CMA

Employers should determine whether the work location is inside a Census Metropolitan Area before submitting an LMIA application.

The policy provides a process for checking the location.

Step 1: Obtain the Complete Postal Code

Start with the complete postal code of the work location.

Step 2: Check the Census Geography

Use the Census of Population geographic search to determine the applicable geographic classification.

Step 3: Look for the CMA or Census Agglomeration

If the location is identified as a Census Agglomeration, the application remains eligible for processing under this particular refusal-to-process measure.

If it is identified as a Census Metropolitan Area, the employer must check the applicable unemployment rate.

Step 4: Check the Rate for the Application Period

If the CMA's unemployment rate is 6% or higher, the applicable low-wage LMIA may not be processed unless an exemption applies.

4. Certain In-Home Caregiver Positions With Live-In Requirements

The rules also address certain in-home caregiver positions where the employer requires the worker to live in the home.

The refusal-to-process measure applies to specified caregiver positions classified under:

• NOC 31301;

• NOC 32101;

• NOC 44100; and

• NOC 44101.

The position must involve a mandatory live-in requirement and meet the applicable classification conditions.

However, exceptions exist.

Exception for High Medical Needs

An employer seeking an in-home caregiver with a mandatory live-in requirement for a person with high medical needs may qualify for an exception.

Examples can include care for:

• A person with a disability;

• A senior;

• A person with a chronic illness; or

• A person with a terminal illness.

The employer must provide appropriate documentation.

This can include a physician's note certifying the medical condition and the need for live-in care or the applicable Schedule H — Medical disability, chronic or terminal illness certificate (EMP5600).

Exceptional Circumstances

There can also be exceptional circumstances where a live-in arrangement may need to be considered.

The employer must provide a written rationale as part of the housing section of the LMIA application.

The explanation should address:

• Why live-in care is required;

• How frequently the circumstances requiring live-in care occur;

• The degree to which the employer can influence that frequency;

• What alternative care options were considered;

• Why those alternatives were not viable; and

• How fair working conditions will be maintained for the caregiver.

5. Previous LMIA Revocation

Employers should also pay attention to their previous LMIA history.

An LMIA application may be refused for processing if the employer has had an LMIA revoked within the previous 2 years because the employer provided:

• False information;

• Misleading information; or

• Inaccurate information.

This makes accuracy especially important when submitting an LMIA application.

Employers should ensure that information provided to Service Canada is complete, accurate and supported by appropriate documentation.

Montréal and Laval

The refusal-to-process rules also include temporary measures affecting certain low-wage positions in the economic regions of Montréal and Laval.

Employers hiring in Quebec should review the applicable Quebec-specific rules before submitting an LMIA application.

The exact municipalities included in the economic regions and the applicable conditions should be checked against the current official requirements.

Processing Fees

There is an important financial point for employers.

If Service Canada refuses to process an LMIA application because the application is affected by one of these refusal-to-process measures, the employer will not be charged the processing fee for that application.

An employer will also receive a letter explaining why the application was not processed.

This is different from simply receiving a negative LMIA decision after processing.

Why Employers Should Review the Rules Before Applying

An LMIA application can require significant preparation.

Employers may need to prepare information about:

• The position;

• Wages;

• Recruitment;

• Working conditions;

• The work location;

• The employer;

• The workforce;

• The occupation;

• The applicable industry classification.

If the application falls under a refusal-to-process rule, Service Canada may not process it.

Reviewing eligibility before submission can therefore help employers identify potential issues early.

LMIA Compliance Is Important

The Temporary Foreign Worker Program places obligations on employers.

Employers should understand that compliance does not end once an LMIA is issued.

Employer compliance reviews and inspections can have consequences for future participation in the program.

Non-compliance can potentially result in an employer being placed on an ineligibility list or facing other consequences.

Employers should therefore maintain accurate records and follow the conditions associated with hiring temporary foreign workers.

What Employers Should Check Before Submitting an LMIA

A practical pre-submission checklist can include:

Employer eligibility

☑️ Is the employer eligible to participate in the Temporary Foreign Worker Program?

Compliance history

☑️ Is the employer on the IRCC ineligibility list?

Position classification

☑️ Is the correct NOC being used?

Industry classification

☑️ Is the applicable NAICS classification correct?

Wage level

☑️ Is the position considered low-wage under the applicable rules?

Workforce percentage

☑️ Does the employer meet the applicable 10% or 20% low-wage cap?

Work location

☑️ Is the position located inside a CMA?

Unemployment rate

☑️ If it is a CMA, does the applicable unemployment rate meet or exceed 6%?

Exemptions

☑️ Does the position qualify for an applicable exemption?

Previous LMIA history

☑️ Has the employer had an LMIA revoked within the previous two years for false, misleading or inaccurate information?

Caregiver requirements

☑️ If applicable, does a live-in caregiver position meet the relevant exception requirements?

Final Takeaway

Canada's LMIA system includes several circumstances where an application may be refused for processing before a full LMIA assessment takes place.

The key areas employers should watch include:

🔴 Employer ineligibility

📊 Low-wage workforce caps

📍 Low-wage positions in certain CMAs with unemployment rates of 6% or higher

🏠 Certain mandatory live-in caregiver positions

⚠️ Certain employers with an LMIA revoked within the previous two years

📍 Certain low-wage positions in the Montréal and Laval economic regions

At the same time, exemptions and temporary measures exist for specific sectors, occupations, rural locations and circumstances.

The unemployment-rate information is particularly time-sensitive. The latest table was updated on October 9, 2026, and the current period runs until January 7, 2027.

Employers should therefore check the rules and applicable rates based on the date and circumstances of their LMIA application.

🇨🇦 Planning to Hire a Temporary Foreign Worker?

Understanding LMIA requirements before submitting an application can help employers avoid preventable processing issues.

Skylam Immigration Services can help you understand Canadian immigration and temporary foreign worker requirements relevant to your situation.

Skylam Immigration Services

This article is for general informational purposes only and should not be considered legal advice.