When Will Service Canada Refuse to Process Your LMIA Application?

Not every Labour Market Impact Assessment (LMIA) application gets processed, and understanding why is just as important as understanding how to apply. According to Canada.ca, Service Canada can refuse to process certain LMIA applications outright, before they’re even assessed on their merits, based on either regulatory authority or public policy considerations set out in Ministerial instructions.

Here’s a breakdown of when that happens and what employers need to check before submitting.

Regulatory Authority: Ineligible Employers

Some employers simply don’t have the authority to use the Temporary Foreign Worker Program at all. As per Canada.ca, this includes employers who:

• Regularly offer services in the sex industry (striptease, erotic dance, escort services, or erotic massage)
  
• Appear on the IRCC ineligibility list, meaning they’ve been found non-compliant after a compliance review, banned from the program following an inspection, or are in default of an administrative monetary penalty

Ministerial Instructions: Public Policy Refusals

Beyond employer eligibility, Service Canada may also refuse to process an application based on broader public policy considerations. This applies to:

• Positions above the cap on the proportion of low-wage positions
  
• Low-wage positions in census metropolitan areas (CMAs) with an unemployment rate of 6% or higher
  
• In-home caregiver positions with a live-in requirement
  
• Any position, if you’ve had an LMIA revoked in the past 2 years
  
• Certain low-wage positions in the economic regions of Montréal and Laval

The Low-Wage Position Caps

There are two separate caps to be aware of:

• 10% cap – applies generally. If low-wage positions exceed 10% of the total workforce at a work location, the LMIA won’t be processed.
  
• 20% cap – applies to specific sectors: construction (NAICS 23), food manufacturing (NAICS 311), hospitals (NAICS 622), and nursing/residential care facilities (NAICS 623), along with certain in-home caregiver roles (NOC 31301, 32101, 44100, 44101).

Employers in rural areas within participating provinces and territories may qualify for temporary measures that adjust these proportions, so it’s worth checking eligibility before assuming the cap applies to you.

The 6% Unemployment Rate Rule for CMAs

This is one of the more overlooked refusal conditions. Per Canada.ca, LMIA applications submitted for a low-wage position won’t be processed if both of these apply:

1. The offered wage is below the provincial or territorial wage threshold, and
2. The work location is in a CMA where the unemployment rate is 6% or higher at the time of submission

This rate is reviewed every three months, with the next update scheduled for October 9, 2026. Here are the current rates for applications submitted July 10 to October 8, 2026, alongside the two previous periods:

CMA	Jan 9–Apr 9, 2026	Apr 10–Jul 9, 2026	Jul 10–Oct 8, 2026
Toronto, ON	7.5	7.9	7.3
Vancouver, BC	$5.90	$6.50	6.7
Montréal, QC	$5.50	$6.80	6.8
Calgary, AB	$6.30	$7.10	7
Edmonton, AB	$6.90	$7.00	7.2
Winnipeg, MB	$5.70	$6.00	5.6
Ottawa-Gatineau, ON/QC	$6.80	$6.20	6.7
Halifax, NS	$5.20	$6.10	5.9
Kitchener-Cambridge-Waterloo, ON	$8.10	$9.10	8.1
Regina, SK	$6.30	$6.40	5.9

This is a snapshot of major CMAs. The full list of 39 CMAs is published on Canada.ca and should be checked directly for any work location under consideration.

To check your specific work location, employers should search the postal code through Statistics Canada’s Census of population geography tool, confirm whether it falls under a Census Metropolitan Area (not a Census Agglomeration, which remains eligible), and then cross-reference the unemployment rate table above.

Other Refusal Conditions Worth Knowing

• In-home caregivers with live-in requirements: applications for positions under NAICS 814 (private household), NOC 31301, 32101, 44100, or 44101 won’t be processed if the job was advertised with a live-in requirement, subject to certain exceptions.
  
• Previous revocation: if an employer had an LMIA revoked in the past 2 years for providing false, misleading, or inaccurate information, any new application from that employer may be refused.
  
• Montréal and Laval: certain low-wage positions in these economic regions face a temporary refusal-to-process measure. Employers hiring in Quebec should consult the specific guidance for these regions.

The Processing Fee

If your application is refused under any of these conditions, or if you’re found to be an ineligible employer, Canada.ca confirms you won’t be charged the processing fee, and you’ll receive a letter explaining the reason for the refusal.

Book Your Consultation

LMIA refusal conditions depend on your wage offer, work location, sector, and employer history, and a small oversight in any of these areas can mean your application is never processed at all. If you want to confirm whether your position is at risk of a refusal-to-process decision, book a consultation with our licensed RCIC consultant to discuss your specific situation.

Frequently Asked Questions

1. Will I be charged the LMIA processing fee if my application is refused?

No. According to Canada.ca, no processing fee is charged if the LMIA is refused for these reasons, and you’ll receive a letter stating why.

2. How often is the CMA unemployment rate table updated?

Every 3 months. The current rates apply to applications submitted between July 10 and October 8, 2026, with the next update on October 9, 2026.

3. Does the 6% unemployment rule apply to all LMIA applications?

No, only to low-wage positions where the offered wage is below the provincial or territorial wage threshold and the work location is in a CMA with a 6% or higher unemployment rate.

4. Are rural employers exempt from the low-wage position caps?

Employers in rural areas within participating provinces and territories may be eligible for temporary measures that adjust the proportion caps, so it’s worth checking your specific eligibility.