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Labour Market Impact Assessments – The Genuiness and Actively Engaged Factors

Section 203(1)(a) of the Immigration and Refugee Protection Regulations (“IRPR“) requires Service Canada to only issue a positive Labour Market Impact Assessment (“LMIA“) when it is satisfied that an employer’s job offer is genuine.

The IRPR lists several specific factors which Service Canada officers must consider in a genuineness analysis.

The Genuineness Factor

In addition to regulation 203(1)(a) of the IRPR, regulation 200(5) of IRPR provides that:

Genuineness of job offer

(5) A determination of whether an offer of employment is genuine shall be based on the following factors:

(a) whether the offer is made by an employer that is actively engaged in the business in respect of which the offer is made, unless the offer is made for employment as a live-in caregiver;

(b) whether the offer is consistent with the reasonable employment needs of the employer;

(c) whether the terms of the offer are terms that the employer is reasonably able to fulfil; and

(d) the past compliance of the employer, or any person who recruited the foreign national for the employer, with the federal or provincial laws that regulate employment, or the recruiting of employees, in the province in which it is intended that the foreign national work.


For an offer of employment to be considered genuine, all four genuineness factors must be met.  Service Canada willassess the genuineness factors for every LMIA and may use a variety of sources and methods to undertake this assessment, as discussed in more detail below.

With regards to IRPR r. 200(5)(a) of the IRPR, as discussed in more detail below, “Actively engaged means that the employer has an actual bona fide operating business where an employee could work, which is providing a good or service, and that the good or service being provided should have a link to the offer of employment as described in the LMIA application.”

With regards to IRPR r. 200(5)(b) of the IRPR, as discussed in more detail below, “reasonable employment needs are those needs which could be justified as being related and relevant to the type of business and reasonable business activities an employer and its workers may undertake. Where a link may not be clear, employersare given an opportunity to provide a rationale explaining how the offer of employment is consistent with the employment needs of their business.” Officers will consider business sense, hours of work, period work and re-entry of the foreign worker and the timing of employment.

With regards to IRPR r. 200(5)(c), “reasonable ability to fulfill means that the employer can demonstrate that all the terms of the job offer are likely to be met for the entirety of the period of employment offered, including having available resources to support the employment of the foreign worker.

The following PDF explains the assessment of the genuineness factor in greater detail.



Employers applying for an LMIA for the first time or employers that have not been issued a positive LMIA in the two years prior to applying for an LMIA application must provide at least one document that demonstrates that they:

  • have a legitimate operating business providing either a good or service related to the position being requested in Canada; and
  • are able to fulfill the terms of the job offer.

Officers may at their discretion require employers who have been issued a positive LMIA within the past two years to provide these documents.

Some of the more common documents that employers can provide include:

  • T4 Summary of Remuneration PAid – Provides a summary of all remuneration (such as salaries, wages, vacation pay, bonus, commissions, taxable benefits, etc.) paid and all source deductions collected.
  • PD7A Statement of Account for Current Source Deductions – The Canada Revenue AGency issues the Statement of Account for Current Source Deductions to businesses with employees that submit source deductions on their behalf.
  • Attestation – Employers may use an attestation by a lawyer or any other member in good standing with a law society or by a Chartered Professional Accountant (CPA) to demonstrate active engagement or reasonability to fulfill.
  • Provincial, territorial or municipal business license.
  • T2 Schedule 125 – As a general rule, net income should be enough to support the estimated wages of the prospective temporary foreign worker for the duration of employment.
  • T2 Schedule 100 – Retained earnings is the cumulative earnings (profit/loss) maintained by the company. These funds can be reinvested in the business.

In certain circumstances, an employer can demonstrate a reasonable ability to fulfill and a reasonable employment need if the officer is able to confirm that an employer’s contract for goods or services represents new and confirmed work, and that the terms of the contract will provide the employer with adequate resources to reasonably fulfill the terms of the job offer in the LMIA.

At its discretion, Service Canada can ask for a lease agreement to examine if:

  • the lease has been signed and was issued to the business or to the primary contact named on the LMIA application;
  • the orgnaization issuing and signing the lease is a legal and legitimate organization known to the public;
  • the lease agreement start and end dates are consistent with the LMIA application; and
  • the lease agreement address is consistent with the LMIA work location.

The following is a greater explanation on how Service Canada assesses the genuineness factor as found in the Temporary Foreign Worker Program wiki.


Actively Engaged

(a) whether the offer is made by an employer, other than an employer of a live-in caregiver, that is actively engaged in the business in respect of which the offer is made

The assessment of this factor (the (“Actively Engaged Factor“) requires Service Canada officers to determine that the employer legally exists and operates a business relating to the prospective temporary foreign worker’s (“TFW“) job offer.  To pass the Actively Engaged Factor, the employer needs to:

  • have an operating/functioning business
  • provide a good or service related to the job offer made to the TFW;
  • normally have at least one employee, and
  • must have a work location in Canada where the TFW could work.

All first-time LMO applicants are subject to a Level-2 assessment of the Actively Engaged Factor, and are required to submit:

  • a copy of their business license/permit; or (for municipalities that don’t require the employer have a business license)
  • a Canada Revenue Agency (“CRA“) T4 summary, CRA T2 schedules, business contract(s) for work in Canada,  and/or an attestation by a lawyer, notary public, or chartered accountant.

Returning employers to the LMO program are subject to a Level-1 analysis of the Actively Engaged Factor, where Service Canada officers will simply check the employer’s profile to ensure that the business activities described by the employer on their LMO application do not deviate substantially from the ones listed in past LMO applications.  If there is a significant difference between current and previous applications, then the Service Canada officer will verbally ask the employer  for an explanation on how the principal business activities have changed through a follow-up conversation.

It is only in the rarest of cases where a Level-2 Assessment for the Actively Engaged Factor will be conducted for a returning employer.

Reasonable Employment Need

(b) whether the offer is consistent with the reasonable employment needs of the employer;

This factor (the “Reasonable Employment Need Factor“) requires that employers demonstrate that the job offer that they have made to the TFW be consistent with the employer’s reasonable employment needs. The position offered should match the general type of work that is usually part of employment in the employer’s business/sector.

Because there is no documentation which could reasonably substantiate an employer’s employment needs, the Reasonable Employment Need factor receives a Level 1 assessment.  The current LMO application form for high-skilled positions, for example, states:

When questions arise concerning the legitimacy of the Reasonable Employment Need Factor, officers are encouraged to clarify the employer’s rationale by phone or by requesting a more detailed explanation in writing.

Ability to Fill

(c) whether the terms of the offer are terms that the employer is reasonably able to fulfil; and

This factor requires that employers demonstrate that they are reasonably able to fulfil all of the terms of employment (the “Ability to Fill Factor“). This means demonstrating that they are capable of providing TFW(s), for the duration of their work permit(s), full-time work in line with the job description and acceptable employment standards. It includes not only the employer’s ability to pay required salaries and benefits, but also their ability to meet other program requirements,such as providing return airfare to certain TFWs.

For a Level 1 assessment, officers will rely on signed attestations by employers which confirm the employer’s commitment to fulfilling the terms of the job offer. The current LMO application form for high skilled positions, for example, requires employers to attest that:

A level-2 assessment of this factor will only be triggered if there is a clear reason for doubting the employer’s ability to meet the Ability to Fill Factor and if the required documentation could assist an officer’s assessment of this criterion.

For example, the TWFP Manual (as for March 2013) states:

For example, if, due to financial constraints, an employer had failed to provide return airfare to a NOC D worker as promised on a previous LMO, a level-2 assessment would be warranted in order to better determine the employer’s capacity to meet this requirement for the current LMO application. Alternatively, if the employer neglected to meet this requirement because they failed to understand their obligations. but subsequently remunerated the employee and attested to meeting this requirement in the future. a level-2 assessment of this factor would not be appropriate because the submission of financial documentation would not address the reason for the employer’s previous non-compliance with programmatic conditions.

If it is determined that a Level-2 assessment of the Ability to Fulfil  Factor is warranted, then employer will be asked to submit one or more of the following documents:

  • CRA T4 summary (which shows the size of an employer);
  • CRA T2 Schedule 100/125 – which shows operating income and profits of a business – as a general rule, Service Canada requires that operating income and/or retained earnings (profits) be great enough to support a prospective TFW’s salary and benefits;
  • CRA T215; or
  • Workers Compensation Clearance Letter (where applicable).

Compliance with Federal / Provincial Law

Under this factor, employers must meet two separate conditions:

  1. employers must be compliant with all federal/provincial/territorial employment legislation in the province(s)/territory(ies) where the TFW will work; and
  2. employers must ensure that they and their recruiters have been and continue to be compliant with all federal/provincial/territorial legislation governing the recruitment of workers in the province(s) where the TFW will work.

Under a Level-1 assessment, officers will rely on signed attestations by employers confirming the past and continued compliance of themselves, or of any person who recruited TFWs on their behalf, with federal or provincial laws that regulate employment or recruitment.  On the high-skilled LMO application form, these attestations currently state:

(The level 2 assessment of this factor, which is usually the result of a negative trigger, is extremely complicated and beyond the scope of this post.)


In order to provide an example of how Service Canada’s genuineness analysis works in practice, I have reproduced the following exchange between a Service Canada officer and a Business Expertise Consultant regarding how to determine the genuineness of a Labour Market Opinion (“LMO“) application.

Please note that what I have reproduced below should not be viewed as legal advice.  I obtained a copy of this internal Service Canada question and answer through an Access to Information Act request (the “ATI”).  The reproduction of question and answer has not occurred with the affiliation of the Government of Canada, nor with the endorsement of the Government of Canada.  (I have decided not to reproduce the names of the Service Canada officers involved.) Please e-mail me if you want a copy of the original question and answer contained in the ATI.


NewER, while doing a public domain search, came across website ███████ and checked it out-ER is an employment agency; checked with AFTA ███████ ER is asking for Construction labourer (has TP on file) ███████ Er is trying to hire FWs and send them on contracts; am not convinced that they are not going to farm them out, pardon the speak, and send them here and there to work for John Doe Ltd or Jane Oil Inc. I am sure that ███████ will get their invoice paid and pay the foreign workers out of that; Asked ER for letter from ER to confirm; but the letter goes against the website; why advertise that you are looking to match up EEs with ERs If they are not an employment agency?

Business license recv’d-says home based business, general business/


Can you take a look at the letter and the website and tell me if I am wrong; I’ve attached the letter.

Eventually, so the ER says, they just want to be a scaffolding/carpentry company- ER had no idea that the construction labourers duties were so limited and couldn’t “assist trades”.  The job, as you will see in the letter – is to wash out bathroom cars and janitorial services on large construction sites, to wit, I believe is not even the correct NOC and contradicts the application and supporting documents – which again leads credence to the fact that they are an employment agency. Can’t even keep the story straight on the job duties from conversation, application and subsequent documents.

Need further guidance desperately : )

BE Consultant Response:


███████ website states that they are a “multinational source of dependable labour” (able to) “provide a single temporary placement, a larger construction team or a complete workforce.” However ███████ has provided Service Canada with a signed letter advising that they should be considered the “employer” in this case and they would in no way consider themselves to be an employment agency.  Due to the statement provided the Program Officer should consider conducting a Level II Genuineness assessment to determine whether the company is an employer actively engaged in construction activities that would require the construction labourers requested {███████

“Actively Engaged” and “Reasonable employment need”.

Actively Engaged:

“Employers will be required to describe their main business activities on their LMO application form (box 18). This information will be used to assess whether the employer is actively engaged in a business that relates to the offer made to the TFW”

The Program Officer should compare the information provided on the application regarding the “principal business activity’ with the type of occupation that is being requested, and consider the information ███████ provided in their written statement, which appears in conflict with the information and statements found in the █  website.

From the statement provided it may be determined that the carpentry / scaffolding side of the business does not exist to date and that active engagement in “construction” has not been demonstrated. However, to further assess if  ███████ is operating a multi-faceted business under that legal entity, the Officer may request a detailed business structure that outlines the company’s business activities. The determination that is being made here is the typeof business. Service Canada must be satisfied that the principal business activity is that of a construction company, not an employment agency. Business contracts should be requested, and a signed attestation from a chartered accountant, lawyer or notary public can also be requested to further substantiate the genuineness of the job offer.

Reasonable Employment Need:

“Employers will need to prove that the job offer is consistentwith their reasonable employment needs. This means that the job offered matches the general type of work that is reasonably and usually part of employment in that business/sector and whether the business is experiencing growth or attrition, conditions that would normally require the hiring of a new employee.”

On the LMO application, employers will be required to provide a rationale for the job offer they are making to the TFW and explain how this meets their employment needs. The information / statements found on ███████ website indicate that the principal business activity is that of an employment agency and not a construction company; therefore there would not be a reasonable employment need in this case.

If the employer is unable to satisfy Genuineness, a negative opinion should be issued.


The Program Officer should consider clarifying the following:

    • Who will the construction labourers be working with? Does ███████ currently employ trades people? If so, how many and in what trades?
    • The letter provided to Service Canada mentions securing a contract for janitorial services for construction sites. Is ███████ looking to offer janitorial services also?

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