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Immigration programs expose workers in Canada to fake jobs, abuse

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Immigration programs expose workers in Canada to fake jobs, abuse

Desperate people are exposing themselves to financial and psychological abuse as winning a spot in Canada’s immigration programs gets tougher

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Samuel Gibson regularly works the “worst” shifts — either late night or early morning, sometimes back to back — at a fine dining restaurant in Ontario and hasn’t had a pay increase in three years. His work-life balance is “horrible,” but he can’t quit because his employers hold the key to his future.

“This job is my best shot at becoming a permanent resident,” said the 27-year-old chef who came to Canada from South Asia in 2017 to study culinary management. “I am a specialized chef today. There’s not a lot of people out there who can do what I do. (The employers) are just taking advantage of my situation.”

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Gibson (whose name has been changed to protect his identity) is forced to work in what some are calling an exploitative environment due to recent changes in Canada’s immigration sector that could force thousands of highly skilled foreign workers to leave the country or become undocumented by year-end.  

As the scores required to qualify for the country’s points-based immigration programs get higher, many foreign workers have been trying to get additional points to boost their rankings. One way that can be done is if employers apply for a Labour Market Impact Assessment (LMIA), a government document that gives workers at least 50 extra points and leads to a new work permit.

Canadian citizenship ceremony
Canada has traditionally relied on immigration to boost its economy. Marc Miller, minister of immigration, refugees and citizenship, welcomed 25 new Canadians during a ceremony in Calgary earlier this month. Photo by Darren Makowichuk /Postmedia

Canada has traditionally relied on immigration to boost its economy and the LMIA program allows companies to hire temporary foreign workers either from abroad or from inside the country. An LMIA approval is supposed to confirm that no Canadian worker or permanent resident is available to do that specific job.

About 71,300 LMIAs were approved by the government in the first quarter this year, compared to 63,300 during the same period last year. The 13 per cent increase suggests there’s an increasing demand for LMIAs amidst the high cut-off scores, said Stephen Green, managing partner at Green and Spiegel LLP, an immigration law firm. Most applications were for positions such as farm workers, cooks, food-counter attendants, truck drivers and construction labourers.

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But as Gibson and others have found out the hard way, the hunt for LMIA-supported employment can also push temporary residents towards exploitation, pay cuts and even fake jobs.

His employer asked him to pay $10,000 for an LMIA to cover the costs associated with the application. The government fee is $1,000, though companies also spend money on advertising the job and using lawyers to submit the applications. But the 27-year-old refused to pay and threatened to quit his job.

“I did that because they initially said they wouldn’t charge me at all,” he said. “But as time passed and my work permit was nearing the expiry date, they started demanding money. They wanted me to be desperate. It doesn’t cost $10,000 for an LMIA. They were going to pocket a huge sum. I had made up my mind to leave Canada and get a job elsewhere.”

As time passed and my work permit was nearing the expiry date, they started demanding money. They wanted me to be desperate. It doesn’t cost $10,000 for an LMIA

Samuel Gibson, a pseudonym for a foreign worker who wants to protect his identity

The chef’s threat, however, compelled his employers to renegotiate and both parties eventually agreed to pay $2,000 each. It was a better deal for Gibson, but it was still illegal since employers are supposed to cover all the costs linked to an LMIA.

Gibson’s troubles didn’t end there. With an LMIA-supported job, he also received a new work permit that doesn’t allow him to work for any other company except for the restaurant that applied for his LMIA. Previously, he had an open work permit that allowed him to work for the employer of his choice. As such, his current employers are making sure they get back at him through pay cuts and back-to-back shifts.

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“They are bitter because they had to pay for half the LMIA,” he said.

For now, Gibson plans to bear the brunt. The LMIA increased his score and helped him receive an invitation from the federal government in mid-July to apply for permanent residency. He still needs documents from his employers to apply and the entire process is expected to take about six months, but he said he will quit his current job as soon as his status changes. 

The impact of rising cut-off scores

There are many immigration programs in Canada, but most temporary residents and foreigners living outside the country try to immigrate as skilled workers. These programs are managed by an online system called Express Entry, which started about a decade ago and provides prospective immigrants with points for their education levels, work experience, English and French language proficiency, age and other factors.

The higher applicants score — out of a total of 1,200 — the more chance they have of becoming permanent residents, which eventually leads to citizenship. The system is designed in a way to attract young, skilled people from around the world.

For example, applicants under 30 receive the highest possible number of points in the age category. Applicants also receive points for Canadian educational degrees and work experience, and LMIAs, although there seemed to be a relatively lesser reliance on those in the past compared to today.

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Many temporary residents, such as students, spend thousands of dollars on tuition and invest three to six years of their lives in Canada — while they study and earn a post-graduate work permit — with the hopes of receiving those additional points to make the cut and become permanent residents.

Temporary residents aren’t promised a permanent stay, but they are influenced by the system’s stakeholders, such as foreign brokers, or even comments made by politicians in the past decade, and often assume they are most likely going to make the cut. The hike in cut-off scores, though, seems to send a message that Canada is going to be more selective in its immigration plans.

It’s really depressing. I trained for eight months to get a permanent job, but I had to quit just as I was about to earn the big bucks

A 28-year-old train conductor whose work permit ends in August

One reason why the cut-off scores are so high today is because there are a lot more people competing for a limited number of permanent residency spots annually due to a record increase in the number of temporary workers and students in Canada in recent years, immigration consultants say.

A new policy introduced last year that allows the government to bypass the existing immigration ranking system and set lower cut-off scores for certain groups, such as engineers, health-care workers and French speakers, has also played a role in raising the scores, analysts say. The result is that the policy leaves fewer spots for thousands of general applicants who don’t fit into those groups.

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Students at the UBC campus
A post-graduate work permit is given to international students after they graduate. It’s not typically extendable, but the government did so during the pandemic to fill labour shortages. Photo by Taehoon Kim/Bloomberg

The cut-off scores — currently around the 520s — have never been this high for so long. The score to beat in one of the draws about three years ago during the pandemic was just 75. The unpredictable fluctuations have irked many existing temporary residents, who find it unfair that they are not able to make the cut when applicants who were a lot less qualified did so in the recent past.

Some economists have also warned that the steep increase in cut-off scores could force many temporary residents with specialized skillsets to leave Canada, thereby further hurting the country’s struggling labour productivity levels, which have fallen in 12 of the past 15 quarters.

For example, a 28-year-old train conductor who works for a railroad company said he’s planning to quit and leave Canada after his work permit ends in August since the company won’t apply for an LMIA. He found a business owner who offered him an LMIA-supported job in return for $40,000 earlier this year, but he refused to pay.

“It honestly doesn’t make sense to spend so much money,” said the train conductor who came to Canada in 2019. “It’s really depressing. I trained for eight months to get a permanent job, but I had to quit just as I was about to earn the big bucks.”

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Similarly, a transit supervisor in British Columbia is on the hunt for an LMIA since his post-graduate work permit expired in mid-July. Some immigration agents he spoke to said he would need to pay a minimum of $30,000 to find an LMIA-supported job, with no guarantees of success.

“I am at a loss as to what more I could have done differently,” said the 33-year-old who came to Canada in 2018. “I possess a strong educational background, I have worked as a transit supervisor — a role recognized as essential — for two years and earn a wage that falls within the high-wage bracket for the industry. I have diligently paid taxes and contributed to the economy.”

He has applied for a visitor’s record, which, if approved, will allow him to extend his stay for a brief period. He said he will try to look for an LMIA-supported job that “doesn’t cost him a fortune.”

More fines, more bans

These examples show a rising demand for LMIAs has also led to an increase in fraudulent activities linked to the document, some immigration consultants say.

That LMIA-supported jobs have been sold by agents to foreign workers is not new, but the average price seems to have increased in recent times.

“I have heard of LMIAs being sold for $70,000 as well,” immigration consultant Kanwar Sierah said. “Unlike previous occasions, post-graduate work permit holders don’t expect the government to extend their work permits this time. Hence, the demand for LMIAs seems to have increased.”

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A post-graduate work permit is given to international students after they graduate. It’s not typically extendable, but the government did so during the pandemic to fill labour shortages.

Government data also suggests that more employers are getting fined and banned for getting involved in illegal practices with respect to temporary foreign workers.

Between April 2023 and March 2024, Employment and Social Development Canada (ESDC), which looks after the LMIAs, levied $2.1-million worth of fines against employers that violated rules while hiring foreign workers — that was 36 per cent higher than the previous year. In addition, 12 employers were banned from hiring temporary foreign workers this year, compared to seven last year.

A child at a daycare
Childcare is one sector vulnerable to LMIA abuse, said a government insider. Photo by Shaughn Butts /Postmedia

“Shortsighted policies” have allowed LMIA fraud to become a lucrative business in Canada, immigration consultant Steven Paolasini said. He lists three kinds of LMIA frauds present in the market today.

The first is when an employer doesn’t really need to hire a worker, but applies for an LMIA for the financial benefit of getting someone to buy it.

In this scenario, an employer creates a position, such as an administrative assistant, and then partners with a consultant to get an LMIA approved. The job is later sold to a foreign worker looking to get the extra points to become a permanent resident for a price that could go up to $50,000, he said. If everything goes according to plan, the newcomer will get the extra points and quit the job after becoming a permanent resident.

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In case the conversion to permanent residency takes time, the newcomer will still be shown as an employee at the company on paper. To do that, the worker will be asked to indirectly pay the employer cash, which will then be deposited into the worker’s account and shown as the applicant’s salary. Meanwhile, the worker will look to illegally earn cash elsewhere. Paolasini refers to this as the payroll cycling scheme.

The second kind of fraud involves employers that genuinely need workers in their company and decide to hire a consultant to get them. The company and the consultant may look to only hire people who are willing to pay for the jobs, which could exclude genuine job seekers, including Canadians, permanent residents and Indigenous people.

In the third scenario, an employer may hire a foreign worker and end up paying the worker less than what was initially promised in the employment offer. The worker may not want to protest in order to avoid losing the job and a chance to become a permanent resident.

Despite these issues, most consultants agree that LMIAs are valuable for the Canadian economy and are required in sectors that need specialized workers and in those that suffer from a labour shortage, such as health care and construction. Questions, though, remain about the extent to which they are required in other industries.

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“Maybe in some areas, the government needs to review its policy with respect to the issuance of an LMIA,” immigration lawyer Green said. “The only way to get an LMIA is if an employer has tested the market and shown the position can’t be filled.”

It’s a ‘gold mine’

The federal government has said that addressing LMIA fraud is a key priority.

“Sectors identified as high risk for LMIA fraud are assessed more rigorously to validate the employer’s business operations and the human resource needs,” ESDC spokesperson Mila Roy said in an email.

However, a government officer who processes LMIAs for the ESDC said the steps taken to check the validity of LMIA applications aren’t strong enough to tackle the rising number of fraudulent applications amidst an increasing backlog.

“Things have spiralled to the point where you can see the same few immigration consultants applying again and again,” said the officer, who asked to remain anonymous. “They are making new businesses that don’t even make sense, but they have documents supporting it from lawyers and chartered professional accountants.”

These consultants are going door to door, they said, telling businesses, “Hey, I can throw some temporary foreign workers here.”

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The official said some big consultants are also buying up businesses to create more fake jobs — for example, an agent who buys up daycares.

Doctors in an operating room
LMIAs are useful for the Canadian economy and are required in sectors that need specialized workers or suffer from labour shortages, such as health care and construction. Photo by Derek Baldwin /Postmedia

“She initially applies to get an early childhood educator, which makes sense and is likely to get an approval,” they said. “But soon after, she will start applying for administrative assistants, cooks and other positions that don’t really make sense.”

The official describes the fake LMIA business as a “gold mine,” with “more and more people” joining in. With places such as Toronto and Vancouver saturated, the corrupt network is now exploring towns that are further away.

“That’s where we are seeing the most growth,” they said. “In areas that we had never seen before.”

Even if LMIA processing officers are suspicious about certain applications, they aren’t able to reject them without “solid evidence,” the officer said. And a large number of LMIAs that get rejected are due to issues linked to the “burdensome” paperwork.

“If they are new, if they have never applied before and don’t have a consultant, they might make mistakes that other people know how to game. Those are the common ones that fail,” they said.

The ESDC said the comments made by the officer did not “reflect the steps being taken to ensure the integrity” of the temporary foreign workers program and the protection of workers.

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“ESDC’s compliance regime regularly monitors employer obligations, and the Government of Canada recently strengthened the rules on this front, with more inspections and more fines being issued to non-compliant employers,” it said in a statement.

A clear message to foreign workers

LMIAs are more likely to be sold outside Canada to foreigners looking for work permits than inside since the Canadian government “has no teeth” to go after corrupt agencies abroad, Green said.

Many people outside Canada assume they can legally buy an LMIA for $40,000 and that this is part of the immigration system, he said, adding that the government needs to better explain that it isn’t.

Such a strong message could have helped 37-year-old Mandeep Singh, a newcomer who came to Canada from India in 2022 after paying $45,000 to a consultant. He was told the payment covered charges for his job, work permit approval and his wife’s work permit.

Within two months after coming to Canada and setting up his bank account, he received $1,474 as his biweekly salary from the restaurant he was contracted to work for. He was surprised since he had yet to start working.

He later realized the job wasn’t real. He would be paid $1,474 every two weeks as his salary and he would have to pay his employer around $2,000 in return to ensure the job was real on paper and the payment cycle continued. He was asked by his consultant to earn money under the table somewhere else.

Singh, however, quit the job after a few months and is now hoping to take legal action against his employers and the Canadian consultant that brought him here.

“I was so broken mentally when I first came to know this was a scam,” he said. “All I want right now is for the consultants to be punished. They must have cheated many more people before me.”

• Email: nkarim@postmedia.com

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