Canada restricts common LMIA

Foreign nationals can no longer be issued reciprocal employment work permits if their employment is set to begin only upon their arrival in Canada.

On July 29, 2026, Canada’s immigration department published updated instructions to officers directing how work permits are issued under the C20 exemption to the requirement for a Labour Market Impact Assessment (LMIA).

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The updated version of the instructions, now titled “Reciprocal employment general guidelines [R205(b) – C20] – Canadian interests – International Mobility Program” mandates that for a work permit to be issued, the worker “must be currently employed by the company abroad.”

No mention of this limitation to current employees was to be found in the previous version of the instructions, titled “International Mobility Program (IMP): Canadian interests - Reciprocal employment general guidelines R205(b), C20.”

The updated instructions explain that “starting their employment with the company upon arrival in Canada would not provide the foreign national—or Canadian employer—with the opportunity to benefit from an exchange of knowledge or experience.”

The previous version placed a heavy emphasis on assessing reciprocity on the basis of an overall “neutral labour market impact”—a phrase which has been dropped entirely from the updated version.

Reciprocal employment work permits are issued under Immigration and Refugee Protection Regulations R205(b), which provides for the issuance of work permits to foreign nationals who intend to perform work “which would create or maintain reciprocal employment of Canadian citizens or permanent residents of Canada in other countries.”

The updated instructions clarify that “the reciprocity does not have to be directly between two countries. For example, a multinational company can show that they create or maintain similar opportunities for Canadians at different offices around the world.”

C20 work permits typically apply to employers that operate across multiple jurisdictions, such as academic institutions, multinational corporations, governmental organizations, and international non-profits.

The C20 exemption code does not apply to work permits issued through the exchange program International Experience Canada (IEC), as IEC work permits are issued under R204(d).

If a foreign national does not qualify for C20 or another exemption under the International Mobility Program (IMP), the issuance of a work permit must be through the Temporary Foreign Worker Program (TFWP) and requires that the employer apply for and be issued a Labour Market Impact Assessment (LMIA) showing that no qualified Canadian citizen or permanent resident is available to fill the position.

Applying for an LMIA requires additional time and cost on the part of the employer. As of the time of writing, employers are also barred from applying for LMIAs for roles paying less than 120% of the median wage in regions with 6% or higher unemployment.