Owner Operator LMIA

The Owner Operator LMIA is one of the most useful tools for Business Immigrants who can meet the Express Entry requirements as it helps in improving Comprehensive Score Rating CRS.

Work permits may be issued to foreign nationals whose proposed Canadian employer has obtained an opinion from Employment and Social Development Canada (“ESDC”), which ensures that the job offer is genuine; and would likely have a neutral or positive effect on the Canadian labour market.

There are a few things to note:

• Start-up issues: It may be difficult for a start-up business to qualify, as it would not be “actively engaged in the business”. It is possible to get Owner Operator LMIA for a start-up, but the clients should made some investments in leasehold improvements and equipment and show some operations before the application assessment is made.
• Business Purchases: It would thus be easier to purchase a business rather than start up a new Enterprise, as you could show that the business was “actively engaged” in the business.
• Role of the Owner Operator prior to LMIA approval: An interesting issue arises with respect to the Owner Operator’s role. While one may be able to show that the employer company which the Owner Operator wishes to purchase is “actively engaged in the business”, is it necessary to show that the proposed Owner Operator is already involved in the business?
• Owner Operator’s future role: Applicants would need to show that they are needed in the business. In one application we had, our client’s business already had a manager, and the Officer questioned the need for our client to be in Canada. We submitted that the things the Canadian manager could do were limited, and that the business needed to have an Owner Operator to really take overall responsibility.
• Ability to afford Owner Operator: Ensure that the company has sufficient financial resources to be able to hire (and pay) the Owner Operator, especially if there is a salary committed to
• Compliance with Employment laws: Ensure that the business being purchased has been compliant insofar as recruiting and employment laws. This appears to be broader than the “blacklist” by ESDC
• LMIA Exempt Work Permits for Start-ups: If the client really wished to start a particular business from scratch, it may be better to have him/her obtain a Work Permit as a Free Trade Investor or one of the LMIA Exempt categories first, and then apply for the Owner Operator LMIA after the business has been established and operating.

TFWP Owner Operator Guidelines

For the purposes of the TFWP, “Owner/Operators” are defined as foreign nationals who hold a share in a business located in Canada and are classified under an NOC 0, A or B occupation. Owner/Operators are not the same as self-employed individuals, and are not required to be hands-on with the day to day operations of the company.

“LMO exemptions are determined by CIC under C-10, CIC may issue a work permit without an LMO, if it is determined that the foreign national would create or maintain significant social, cultural or economic benefits, or job opportunities for Canadians HRSDC/Service Canada is required to assess all LMO applications. Although an employer-employee relationship is generally required in order to provide an LMO, there are certain situations, such as the owner/operators, where the principal owner would also serve as the worker.

An officer is to consider the following in making a determination as to whether or not an offer of employment to a foreign national would have a neutral or positive effect on the Canadian Labour Market. Whether the employment of the foreign national will or is likely to result in direct job creation or job retention for Canadian citizens or permanent resident. ESDC officers must examine all of the evidence put before them, then make a decision as to whether or not issuing the LMIA would have a neutral or positive effect on the Canadian labour market.

The holder of the largest share of the business is considered to be the “Principal Owner”. Where there are a number of equal shareholders, one of them can be designated as the “Principal Owner.Also no Advertising is required as this is noted in the “Variations to Minimum Advertising Requirements” on the ESDC website.

Few more things to consider:

• Direct ownership vs Holding Companies: Based on recent guidance from ESDC, the Owner/Operator must own his or her share in the operating business directly. Business Immigrants who own shares in the operating company would not likely qualify.
• Licences and Registrations: Any licences or registrations that may be required to operate the business should be obtained or at least be in process at the time of the application.
• Location: The business location should be identified or at least secured at the time of the application (e.g. a lease for a property). This is particularly important for start-up businesses that may not be in operation at the time of the application. If there are multiple business locations that the applicant will work at, clearly indicate as such in the application;
• Forms: Although ESDC’s LMIA application forms were not designed for the Owner Operator LMIA, it is important to complete all fields of the forms. For fields that may not be applicable because of the claim for an Owner Operator LMIA, clearly state that the field is not applicable and, if necessary, explain why the field is not applicable.
• Supporting Business Documentation: Include evidence that the business is able to operate and to hire Canadian citizens or permanent residents. This can include past financial statements, information from websites demonstrating the business’ past activities, the inclusion of public information about employees (e.g. employee pages from business websites), pictures of the business, etc.
• Job description for the Owner Operator: While the Bulletin states that Owner/Operators need not be involved in the hands-on operation of their business, it is helpful to prepare the Business Immigrant with explaining what their role in the business will be.
• Know the Business: Ensure that the Business Immigrant is knowledgeable about the business being purchased prior to his or her interview with ESDC.
• Median Wages: Prepare the Business Immigrant for a possible request by ESDC to pay median wages. Some ESDC officers have insisted on seeing median wages paid, even though the Bulletin states this is not necessary for the Principal owner.
• Language: It is worthwhile to note that the Business Immigrants’ language ability is not crucial to the success of the LMIA. If the Business Immigrant cannot speak English fluently, ESDC has permitted the use of a translator. Having said that, the Business Immigrant should be prepared to work to improve their English in order comply with the terms of any transition plan or representation that permanent residence will be pursued.
• Conditional Purchase of a Business: Some colleagues who have submitted Owner Operator LMIAs have advised that ESDC has recently begun to question the eligibility of business purchases which are subject to a work permit approval for the Business Immigrant.

It remains to be seen if ESDC will develop a consistent policy regarding Owner Operator LMIA applications where a Business Immigrant’s business purchase is subject to work permit approval for the Business Immigrant. As a matter of speculation, one might consider whether proof of a significant and non-refundable deposit of funds for such a business purchase could be a beneficial factor to an Owner Operator LMIA applicant.

Remember that the ultimate goal in the application is to assist the ESDC officer in understanding the basic concept and operation of the business as possible to demonstrate the genuineness of the business and that the employment of the Owner Operator is likely to have a positive or neutral effect on the Canadian labour market.