Owner Operator LMIA
Employers in Atlantic Canada
New instructions on owner/Operator LMIA
The core intent of the program remains focused on delivering significant economic benefits to Canada, particularly in terms of investment and job creation. To reinforce this, Service Canada has introduced the following updates to its policies:
Service Canada will no longer approve LMIA applications for start-ups or new franchise locations. The business must already be operational, with a physical location, active employees, and an established customer base. Simply having a plan or intention to operate in the future is not sufficient.
LMIAs for senior executive positions (NOC 00 such as CEO, CFO, COO, etc.) will only be approved if the business already employs middle management staff. These roles must be filled and in place at the time of the LMIA application. Future hiring intentions will not meet eligibility requirements.
The Owner-Operator’s NOC 00 position must now be advertised in compliance with standard LMIA advertising requirements. The ad must run for a minimum of four weeks before submission, and at least one ad (typically on Job Bank Canada) must remain live until a decision is made. This process generally takes 2 to 3 months.
There are a few things to note:
Business Purchases:
- Purchasing an existing business is generally more advantageous than starting a new enterprise, as it allows the applicant to demonstrate that the business is already operational and that they are actively engaged in its day-to-day operations.
Role of the Owner-Operator Prior to LMIA Approval:
- It is essential to clearly define the Owner-Operator’s role within the business before submitting the LMIA application. The business being purchased must already be actively engaged in operations, and evidence should be provided that the prospective Owner-Operator is involved in business activities, even prior to formal approval.
Future Role of the Owner-Operator
- Applicants must demonstrate that their presence in Canada is essential to the business. If a Canadian manager is already employed, it must be shown that their responsibilities are limited and that the Owner-Operator’s leadership is crucial for strategic direction and overall management of the company.
Financial Capability
- The business must have sufficient financial resources to support the hiring of the Owner-Operator, especially if there is a salary component involved. The ability to pay must be well-documented.
Compliance with Employment Laws:
- The business being acquired must be in full compliance with Canadian recruitment and employment regulations. It must not be listed on the ESDC’s ineligible employer list.
Alternative for Start-Ups – LMIA-Exempt Work Permits:
- For clients who prefer to launch a new business, it may be more effective to first obtain an LMIA-exempt work permit under a Free Trade Agreement (e.g., Investor category) or through the C10/C11 exemptions. Once the business is operational, they may then apply for an Owner-Operator LMIA.
TFWP Owner Operator Guidelines
For the Temporary Foreign Worker Program (TFWP), Owner/Operators are defined as foreign nationals who hold an ownership stake in a Canadian business and occupy a position classified under NOC 0 or 00. Unlike self-employed individuals, Owner/Operators are not necessarily involved in the daily operations of the business.
In evaluating an LMIA, ESDC officers consider whether hiring the foreign national will likely result in job creation or retention for Canadians or permanent residents. All submitted evidence must be carefully assessed to determine if issuing the LMIA will have a neutral or positive impact on the Canadian labour market.
Few more things to consider
Direct Ownership vs. Holding Companies
According to updated ESDC guidelines, the Owner/Operator must hold direct ownership in the operating business. Ownership through a holding company or for voting rights alone will likely not qualify under the Owner/Operator LMIA Program.
Licences and Registrations
Business Location
A physical business location (e.g., a leased property) must be secured before applying. If multiple locations are involved, clearly list each in the application.
Application Forms
Supporting Documentation
- Financial statements
- CRA payroll account confirmation
- Website content or public-facing employee pages
- Business photographs
- Evidence of past business activity
Job Description for Owner/Operator
Understanding the Business
Median Wage Expectations
While median wage requirements are not mandated for principal owners, some ESDC officers may still request proof of such wage commitments. Be prepared to address this possibility.
Language Proficiency
Conditional Business Purchase
Business Plan
A detailed, genuine business plan is essential. It should explain:
- The business concept
- Day-to-day operations
- The Owner/Operator’s role
- How the business supports the Canadian labour market