Yes. While the CBSA cannot directly revoke an LMIA, if they discover undocumented workers at your business, Employment and Social Development Canada (ESDC) can immediately launch a compliance audit and revoke your active Labour Market Impact Assessments (LMIAs), issue fines of up to $1 million, and impose a lifetime ban.
Operating a business in Canada comes with strict federal compliance rules, especially when hiring foreign talent. Some businesses attempt to cut costs by blending a legal workforce-those on approved LMIAs-with an undocumented workforce paid “under the table.” When the Canada Border Services Agency (CBSA) conducts a workplace raid, they are not only looking to arrest individuals without status; they are fundamentally targeting the corporation itself.
Federal agencies in Canada share information seamlessly. 📍 While the CBSA handles immigration enforcement and workplace raids, the statutory authority to suspend or revoke an LMIA belongs strictly to Employment and Social Development Canada (ESDC). A CBSA enforcement action in Edmonton, Halifax, or Montreal will immediately alert ESDC and Immigration, Refugees and Citizenship Canada (IRCC). If your company is found harbouring undocumented workers, ESDC has the power to permanently cripple your ability to hire internationally by revoking your legal LMIAs.
Step-by-Step Process in Canada
When an employer is caught with unauthorized workers, the fallout involves multiple federal departments. Here is the procedural breakdown of how an LMIA gets revoked following a CBSA raid.
Step 1: The CBSA Site Raid and Investigation
The process usually begins with a tip-off. CBSA Inland Enforcement officers will arrive at your worksite to identify and detain workers who do not have valid status in Canada. During this raid, officers will often seize payroll records, employee rosters, and interview managers to determine if the company knowingly hired unauthorized individuals.
Step 2: Information Sharing with ESDC
Under the Immigration and Refugee Protection Act (IRPA), CBSA legally shares its enforcement findings directly with ESDC. 🔎 Because your company previously signed legal declarations promising to obey all federal and provincial labour laws when applying for LMIAs, evidence of illegal hiring immediately triggers an ESDC Employer Compliance Audit.
Step 3: Notice of Preliminary Finding
If ESDC believes you breached the rules, they will issue a “Notice of Preliminary Finding.” This document outlines the suspected violations (e.g., failing to provide safe working conditions, employing unauthorized foreign nationals). Importantly, at this stage, ESDC may immediately suspend your ability to process any new LMIAs while the investigation is ongoing.
Step 4: The Employer’s Right to Respond
You have the right to defend your company. Upon receiving the Notice, you typically have 30 days to provide a written response. 📝 Your corporate immigration lawyer will submit arguments and evidence. For example, you might argue that the undocumented workers were hired by an independent sub-contractor, or that the workers presented sophisticated, forged Canadian documentation during onboarding.
| Federal Violation | Typical ESDC Penalty | Additional Consequence |
|---|---|---|
| Employing Without Status | Massive financial fines (AMPs). | Revocation of all active LMIAs. |
| Failing to Provide Records | Suspension of TFWP access. | Name published on federal “blacklist”. |
| Exploitation / Abuse | Maximum fines, lifetime ban. | CBSA criminal prosecution of directors. |
Step 5: Final Determination and Penalties
If ESDC finds your explanations unsatisfactory, they will issue a Final Determination. Your active LMIAs will be officially revoked. You will be hit with Administrative Monetary Penalties (AMPs), and your company’s name and address will be published on IRCC’s public list of non-compliant employers, resulting in immense reputational damage.
How Much Does it Cost in Canada?
A failed compliance audit can bankrupt a business. 💰 As of 2026, employers facing CBSA and ESDC enforcement will encounter severe financial liabilities (in CAD):
- Administrative Monetary Penalties (AMPs): ESDC can issue fines ranging from $500 to a staggering $1 million per year, depending on the size of the business and the severity of the violation.
- Lost LMIA Fees: If your LMIAs are revoked, the $1,000 per position application fees are completely forfeited.
- Legal Defence: Retaining a specialized corporate immigration lawyer to fight a Notice of Preliminary Finding typically costs between $10,000 and $25,000+ CAD.
How Long Does the Process Take?
While a CBSA raid happens in a single day, the bureaucratic aftermath drags on. An ESDC compliance audit can take anywhere from 3 to 12 months to complete. During this entire period, your LMIA processing privileges are usually suspended, meaning you cannot hire any new foreign workers while you wait for a final decision.
Frequently Asked Questions (FAQ)
What happens to my legal foreign workers if my LMIAs are revoked?
If your LMIAs are revoked, your legally hired Temporary Foreign Workers (TFWs) on closed permits will generally have their work permits cancelled. They will be forced to stop working immediately and must find a new employer to sponsor them, or leave Canada.
Am I safe if I used a staffing agency to supply the workers?
Not necessarily. Canada enforces “joint liability” in many provinces. If you use a shady sub-contractor or temp agency to bring undocumented workers onto your site, ESDC can still hold your primary business accountable for failing to perform due diligence.
Can company directors go to jail for this?
Yes. In severe cases involving human smuggling, trafficking, or knowingly employing foreign nationals without authorization under Section 124 of the IRPA, the CBSA can pursue indictable criminal charges. Directors can face significant prison time alongside corporate fines.
How can I protect my business from accidentally hiring undocumented workers?
You must implement a strict HR onboarding process. Always demand a valid Social Insurance Number (SIN) that does not begin with a “9” (unless backed by a valid work permit). Keep photocopies of every worker’s physical work permit, and track the exact expiry dates in your calendar.
Leave a Reply