Generally, if a Canadian company is bought out, the new owners do not need to issue a new Labour Market Impact Assessment (LMIA) for existing foreign workers if they meet the “successor-in-interest” criteria. This means the job duties, wages, and working conditions remain identical. However, the new employer must formally notify Employment and Social Development Canada (ESDC) and update Immigration, Refugees and Citizenship Canada (IRCC).
When a business undergoes a merger or acquisition (M&A) in Canada, both the corporate leadership and the employees face a period of transition. For Temporary Foreign Workers (TFWs) holding closed work permits, a corporate buyout can be particularly stressful. You might wonder if your visa will be cancelled or if you will be forced to leave the country because the company name on your permit no longer exists.
Fortunately, Canadian federal immigration law accounts for corporate restructuring. 📍 The federal government uses a legal concept called “successor-in-interest.” This rule ensures that as long as your job fundamentally remains the same, your legal status in Canada is protected. However, the burden falls heavily on the new corporate owners to ensure they comply with ESDC and IRCC regulations to avoid heavy administrative penalties.
Step-by-Step Process in Canada
Whether the business is located in Toronto, Vancouver, or Halifax, corporate buyouts involving TFWs are regulated at the federal level. Here is how a new employer generally handles existing LMIAs and work permits during an acquisition.
Step 1: Assessing Successor-in-Interest Status
Before taking any action, the corporate immigration lawyer or HR team must determine if the new company qualifies as a successor-in-interest. 🔍 To qualify, the new employer must acquire substantially all of the assets of the original business. More importantly, the foreign worker must continue to perform the exact same job duties, at the same location, and receive the same (or better) wages as outlined in the original LMIA.
Step 2: Tracking CRA Business Number Changes
The Canada Revenue Agency (CRA) Business Number is a critical identifier for ESDC and IRCC. If the buyout is merely a share purchase and the CRA Business Number remains exactly the same, the administrative burden is minimal. However, if it is an asset purchase and the new company operates under a brand new CRA Business Number, formal notifications to federal agencies are strictly required.
| Corporate Scenario | CRA Business Number | Federal Action Required |
|---|---|---|
| Share Purchase (Buying the entity) | Remains the same. | No new LMIA needed. Update IRCC Employer Portal if names change. |
| Asset Purchase (Buying the assets/staff) | Changes to new owner’s number. | Must notify ESDC and prove successor-in-interest status. |
| Restructuring with Job Changes | May or may not change. | Successor rules fail. Must apply for a completely new LMIA and work permit. |
Step 3: Notifying ESDC and IRCC
If a new CRA number is generated, the new employer cannot simply let the foreign worker continue working in the shadows. 📝 The employer must contact the ESDC processing centre that issued the original LMIA. They must provide a written explanation of the buyout, proof of the asset purchase, and a legal declaration that they are assuming all employer responsibilities and liabilities under the Temporary Foreign Worker Program.
Step 4: Advising the Temporary Foreign Worker
Transparency with the affected employee is crucial. The HR department should provide the foreign worker with a formal letter explaining the successor-in-interest transition. The worker does not typically need to apply for a new work permit, and they can continue working legally under their current closed permit until it expires, provided the employer has notified the government.
Step 5: Applying for a New LMIA (If Conditions Change)
If the new corporate owner decides to relocate the worker to a different province, change their core duties, or lower their wages, the successor-in-interest protection is voided. 🚨 In this case, the employer must submit a brand new LMIA application, pay the associated fees, and wait for approval before the worker can transition to the new role.
How Much Does it Cost in Canada?
Managing corporate buyouts involves administrative and legal costs. 💰 As of May 2026, employers should anticipate the following federal fees in Canadian dollars (CAD):
- ESDC Notification Fee: There is generally no government fee to simply notify ESDC of a successor-in-interest transition.
- New LMIA Application: If the job changes and a new LMIA is required, the federal processing fee is $1,000 CAD per position.
- Employer Compliance Fee: For LMIA-exempt workers (like Intra-Company Transferees), the employer portal compliance fee is $230 CAD.
- Corporate Immigration Lawyer Fees: Legal firms generally charge between $2,000 and $5,000 CAD to manage compliance reporting during M&A deals.
How Long Does the Process Take?
Notifying ESDC of a corporate change should be done immediately upon closing the acquisition. ESDC typically acknowledges the successor-in-interest notification within 2 to 4 weeks. If the conditions of employment have changed and a brand new LMIA must be filed, the employer will face federal processing times that can range from 4 to 12 weeks, depending on the stream. However, if your business is located in a Census Metropolitan Area with an unemployment rate of 6% or higher, such as Vancouver or Halifax, Service Canada will refuse to process any new low-wage LMIA applications, unless the employer operates within an exempt critical sector (like primary agriculture, construction, or healthcare).
Frequently Asked Questions (FAQ)
Does the foreign worker need to get a new physical work permit printed?
Generally, no. If the new company is a true successor-in-interest, the worker can continue using their existing physical work permit until its expiry date, even if it has the old company’s name printed on it.
What happens if the new owner fires the foreign worker?
If the new owner terminates the employment, the worker loses their job but their closed work permit remains legally valid for staying in Canada until its expiry. However, the worker cannot work for anyone else until they secure a new LMIA or an Open Work Permit.
Can the new employer lower the worker’s salary to cut costs?
No. Under the Temporary Foreign Worker Program, an employer must maintain the prevailing wage that was approved on the original LMIA. Lowering the wage violates federal compliance rules and can lead to severe fines or a ban from hiring foreign labour.
Will a corporate buyout affect the worker’s Express Entry PR application?
It can. If the worker is claiming points for an “arranged employment offer” under Express Entry, they must ensure the new successor-in-interest employer provides an updated job offer letter matching the PR requirements. Consulting an immigration lawyer is highly recommended in this scenario.
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