Navigate LMIA wage classifications with confidence and avoid costly mistakes
On This Page You Will Find:
- The exact salary thresholds that determine your LMIA category across all provinces
- How wage classification impacts your approval chances and processing requirements
- Step-by-step comparison of application processes for both streams
- Hidden costs and requirements most employers miss
- Strategic advice on choosing the right path for your hiring needs
Summary:
Choosing between high-wage and low-wage LMIA can make or break your foreign worker application. With processing fees of $1,000 and approval rates varying significantly between streams, understanding these differences isn't just helpful—it's essential. High-wage applications typically face fewer restrictions and faster processing, while low-wage streams come with caps, additional costs, and stricter recruitment requirements. This comprehensive guide breaks down the real-world implications of each path, helping you navigate salary thresholds that jumped up to 20% in November 2024, understand the true cost of compliance, and choose the strategy that maximizes your chances of success.
🔑 Key Takeaways:
- Salary thresholds increased significantly in November 2024, with some provinces seeing 20% jumps
- High-wage LMIAs have no employee caps but require transition plans; low-wage streams are capped at 10% of workforce
- Low-wage employers must cover transportation, healthcare, and housing costs—potentially adding $5,000-$15,000 per worker
- High-wage applications generally have higher approval rates due to fewer restrictions
- The wrong classification can delay your application by 3-6 months and cost thousands in reapplication fees
Maria Santos learned this lesson the hard way. As the HR director for a growing tech company in Toronto, she thought offering $33 per hour for a software developer position would easily qualify for high-wage LMIA processing. But when Ontario's median wage jumped to $34.07 in November 2024, her application was suddenly reclassified as low-wage—triggering months of delays, additional recruitment requirements, and unexpected costs she hadn't budgeted for.
If you're an employer considering hiring foreign workers through the Labour Market Impact Assessment (LMIA) process, understanding the distinction between high-wage and low-wage streams isn't just important—it's critical to your success. About one-third of temporary foreign workers require an LMIA before applying for their work permits, and choosing the wrong category can cost you months of delays and thousands of dollars in additional expenses.
The stakes have never been higher. With recent wage threshold increases across Canada and tightening restrictions on low-wage positions, employers need to understand exactly what they're getting into before they start the process.
What Determines High-Wage vs Low-Wage Classification
The classification system is surprisingly straightforward: it all comes down to a single number. If your offered wage meets or exceeds your province's median hourly wage, you're in the high-wage stream. Fall below that threshold, and you're automatically classified as low-wage.
But here's where it gets tricky—these thresholds changed dramatically in November 2024. Some provinces saw increases of nearly 20%, catching many employers off guard.
Current Median Hourly Wage Thresholds (as of November 2024):
Western Canada:
- Alberta: $35.40 (was $29.50)
- British Columbia: $34.62 (was $28.85)
- Saskatchewan: $32.40 (was $27.00)
- Manitoba: $30.00 (was $25.00)
Central Canada:
- Ontario: $34.07 (was $28.39)
- Quebec: $32.96 (was $27.47)
Atlantic Canada:
- New Brunswick: $28.85 (was $24.04)
- Newfoundland and Labrador: $31.20 (was $26.00)
- Nova Scotia: $28.80 (was $24.00)
- Prince Edward Island: $28.80 (was $24.00)
Northern Territories:
- Northwest Territories: $47.09 (was $39.24)
- Nunavut: $42.00 (was $35.00)
- Yukon: $43.20 (was $36.00)
Here's a reality check: a position paying $40 per hour would be considered high-wage in every province, but it would actually be low-wage in all three territories. Geography matters more than you might think.
Real-World Examples That Illustrate the Impact
Let's say you're hiring a restaurant manager in Calgary, Alberta. To qualify for high-wage processing, you'd need to offer at least $35.40 per hour. Offer $35.00, and you're stuck with low-wage requirements—including employee caps, additional recruitment obligations, and covering transportation costs.
For employers with operations in multiple provinces, the rules get even more complex. If your employee will work in both Ontario and Manitoba, you must use the higher threshold—meaning you'd need to offer at least $34.07 per hour to qualify for high-wage treatment.
The financial implications are significant. One manufacturing company in Ontario discovered this when they offered $32 per hour for a production supervisor role. What they thought would be a straightforward high-wage application became a low-wage nightmare, complete with:
- A 10% cap on low-wage foreign workers (forcing them to hire more Canadians first)
- $3,200 in round-trip transportation costs from the Philippines
- Six months of private healthcare coverage at $450 per month
- Additional recruitment targeting Indigenous persons and newcomers
Their total unexpected costs: over $8,000 per worker.
The Application Process: Where Differences Really Matter
High-Wage LMIA: The Streamlined Path
High-wage applications follow a relatively straightforward process, but they come with their own unique requirements:
Recruitment Requirements:
- Post the job on at least three sources for four weeks minimum
- One posting must be on Job Bank (Canada's national job site)
- At least one advertisement must remain active until the officer makes a decision
- Invite all Job Bank candidates with four stars or higher to apply
Key Advantages:
- No caps on the number of foreign workers you can hire
- No mandatory transportation or healthcare costs
- Simpler recruitment targeting requirements
- Generally higher approval rates
The Catch: You must submit a transition plan explaining how you'll reduce dependence on foreign workers over time. This isn't just a formality—officers scrutinize these plans carefully. Successful transition plans typically include commitments to:
- Train Canadian workers for similar roles
- Invest in automation or process improvements
- Partner with local educational institutions
- Increase wages to attract domestic workers
Low-Wage LMIA: The Restricted Route
Low-wage applications face significantly more hurdles, but they're still viable for many employers:
Additional Recruitment Requirements:
- Same basic posting requirements as high-wage
- Must invite Job Bank candidates with two stars or higher (lower threshold)
- Must specifically target at least two underrepresented groups:
- Indigenous persons
- Vulnerable youth
- Persons with disabilities
- Newcomers to Canada
- Asylum seekers with valid work permits
Mandatory Additional Costs:
- Round-trip transportation from the worker's home country
- Healthcare coverage until provincial health insurance kicks in (typically 3-6 months)
- Ensuring affordable housing is available (though you don't have to pay rent)
Significant Restrictions:
- Maximum 10% of your workforce can be low-wage foreign workers
- Cannot apply in census metropolitan areas with unemployment rates of 6% or higher
- More detailed employment contracts required
The Hidden Costs Nobody Talks About
Beyond the obvious $1,000 processing fee, the real costs vary dramatically between streams:
High-Wage Hidden Costs:
- Legal fees for transition plan development: $2,000-$5,000
- Extended recruitment campaigns: $1,000-$3,000
- Higher salary commitments: potentially $5,000-$15,000 annually per worker
Low-Wage Hidden Costs:
- Transportation: $1,500-$5,000 per worker depending on origin country
- Healthcare coverage: $300-$600 per month for 3-6 months
- Targeted recruitment campaigns: $2,000-$4,000
- Housing assistance or guarantees: varies widely
One restaurant chain calculated that their total cost per low-wage worker averaged $12,000 in the first year, compared to $8,000 for high-wage positions (despite the lower salaries).
Strategic Considerations: Making the Right Choice
When High-Wage Makes Sense
Choose the high-wage stream when:
- You can afford to pay above the median wage
- You need to hire multiple foreign workers quickly
- You want to minimize additional compliance costs
- You're in a high-unemployment area where low-wage applications might be restricted
When Low-Wage Is Your Only Option
You'll need the low-wage stream when:
- Budget constraints prevent higher wages
- The role genuinely doesn't justify higher compensation
- You're comfortable with the 10% workforce cap
- You can absorb the additional transportation and healthcare costs
The Gray Area: Borderline Cases
If you're close to the threshold, consider these factors:
- A $2-3 per hour increase to reach high-wage status often pays for itself through reduced compliance costs
- High-wage applications typically process faster, getting your worker here sooner
- The transition plan requirement for high-wage might actually benefit your long-term workforce planning
Common Mistakes That Delay Applications
Salary Calculation Errors: Always use hourly wages, even if you typically think in annual salaries. A $70,000 annual salary equals approximately $33.65 per hour—which would be low-wage in Ontario but high-wage in Quebec.
Geographic Confusion: Use the wage threshold for where the work will be performed, not where your head office is located. A Toronto company hiring for a Vancouver position must use BC's $34.62 threshold.
Timing Miscalculations: The wage thresholds that apply are those in effect when you submit your application, not when you start recruiting or receive approval.
What This Means for Your Business
The choice between high-wage and low-wage LMIA streams affects more than just your immediate hiring plans. It shapes your workforce strategy, compliance obligations, and long-term costs.
High-wage positions offer more flexibility and potentially faster processing, but they require higher compensation and transition planning. Low-wage positions allow for lower salaries but come with caps, additional costs, and more complex recruitment requirements.
The key is understanding these trade-offs before you begin the process. Too many employers discover the implications only after they've already invested time and money in applications that don't fit their actual needs or capabilities.
Whether you choose high-wage or low-wage LMIA processing, success depends on thorough preparation, accurate salary calculations, and realistic expectations about costs and timelines. The employers who succeed are those who treat LMIA applications as strategic business decisions, not just administrative tasks.
With wage thresholds continuing to rise and restrictions on low-wage positions tightening, the landscape will only become more complex. But for employers who understand the system and plan accordingly, both streams can provide viable paths to accessing the international talent they need to grow their businesses.
