Hiring International Employees for Canadian Businesses

You’re running a Canadian business, you’re growing, and your local candidate pool is… thin. The resumes you want aren’t showing up, or the people with the right skills are already committed elsewhere. So you start looking outside Canada. That’s when things go from “exciting global expansion” to “why is the government website written like this?”

Hiring international employees can be a massive competitive edge. It can also turn into a bureaucratic swamp if you wing it. Most small and mid-sized employers don’t need to become immigration experts, but you do need a solid roadmap to avoid costly delays or outright illegal moves.

If you’re based in Toronto or anywhere in Ontario and you’re already feeling the complexity creep, work permits, LMIAs, IRCC, “programs” with weird acronyms, this is usually where smart employers call in backup. Getting a tailored strategy from an immigration lawyer in Toronto who works with Canadian businesses is often the difference between a “smooth hire” and a “why is this stuck in processing for 10 months?” You don’t need to hand everything off to outsiders, but guessing your legal setup can create serious problems.

First Decision: Do You Actually Need Someone in Canada?

Before you even touch immigration rules, get clear on this: does this person need to work in Canada physically, or can they stay abroad?

Option 1: Remote worker outside Canada

If they stay in their home country and never set foot in your Canadian workplace:

No Canadian work permit needed, because they’re not “working in Canada.”
You’ve got tax and payroll questions instead: does your company create a “permanent establishment” in that country? Do you need a local payroll provider?
Local employment law kicks in where they live, not Canadian employment standards.

This route sounds easy. It’s not always. You dodge immigration but walk right into cross-border tax and employment law.

Option 2: Employee relocates to Canada

Now you’re squarely in Canadian immigration territory:

They’ll almost always need a work permit.
You might need an LMIA (a labour market test), or you may qualify for an LMIA-exempt option.
Once they’re here, you’re on the hook for Canadian payroll, CRA deductions, and provincial employment standards.

Step one: decide between remote and relocation. Don’t half-commit. “We’ll see later” is exactly how you end up redoing contracts, scrambling for permits, and explaining to CRA why your “contractor” looks like an employee.

The Three Big Buckets of Workers You Might Be Dealing With

Canadian rules treat people differently depending on their status. Not all international workers fall under the same regulations or classifications.

1. People already in Canada with the right to work

Examples:

Permanent residents or Canadian citizens
International graduates on a Post-Graduation Work Permit (PGWP)
Spouses of workers or students with open work permits

If they’re already allowed to work in Canada, you generally don’t need to sponsor a license for them. You still need to:

Verify their status and work authorization (don’t just take their word for it).
Follow usual provincial employment standards and onboarding rules.

These hires are the “easy wins” in the international talent pool.

2. People outside Canada who will move here

This is the complicated group. You’re looking at:

Temporary Foreign Worker Program (TFWP) with LMIA
International Mobility Program (IMP) with LMIA-exempt work permits (CUSMA professionals, intra-company transfers, etc.)
Specialized streams like the Global Talent Stream for tech and high-skilled roles

These hires usually take longer and cost more, but they’re often where the rare skills live.

3. People you’re trying to call “contractors” to avoid hassle

Danger zone. Misclassifying someone as an independent contractor when they’re functionally an employee can cause tax, employment standards, and immigration issues. CRA and provincial ministries don’t care what you call them; they care how the relationship actually works.

If you control their schedule, tools, and work, and they’re not running a real independent business, they’re probably an employee. Labeling them otherwise doesn’t resolve the issue.

Who Runs What: IRCC, ESDC, Provinces

The immigration mess feels random until you know who does what.

IRCC (Immigration, Refugees and Citizenship Canada): handles work permits, visas, and permanent residence.
ESDC / Service Canada: handles LMIAs, the labour market test for many foreign worker hires.
Provinces: run employment standards (hours, vacation, termination, etc.) and Provincial Nominee Programs (PR pathways).

So if you’re asking “who do I send this to?”, it depends on whether you’re at the LMIA stage, the work permit stage, or thinking long-term PR.

LMIA: When You Need It and What It Actually Is

LMIA (Labour Market Impact Assessment) is precisely what it sounds like: the government wants proof you tried to hire locally and that bringing in a foreign worker won’t wreck the labour market.

When an LMIA is usually required

Typical LMIA cases:

General hires under the Temporary Foreign Worker Program.
High-wage positions that aren’t covered by special exemptions.
Low-wage or seasonal work, construction, hospitality, and some manufacturing roles.

If you’re not tapping a specific LMIA-exempt category, assume you might need one until proven otherwise.

What the LMIA process involves (for you, the employer)

Advertising the job according to specific federal rules.
Paying the LMIA fee (currently in the four-figure range per position, check the latest).
Submit detailed info about your business, the role, wages, and your recruitment efforts.
Possibly doing a phone or video interview with a Service Canada officer.

This process can take weeks to months. Faster than that? Rare. There are some priority streams, but don’t rely on best-case timelines for your entire hiring plan.

How to avoid blowing your LMIA

Common LMIA mess-ups:

Job ads that don’t meet the strict requirements.
Offered wages below the “prevailing wage” for that occupation and region.
Inconsistent job titles vs. duties vs. NOC/TEER classification.
Sloppy documentation of recruitment efforts.

You don’t get many freebies on this. A refused LMIA can burn months and stall critical hiring. If your team is learning this for the first time on a mission-critical role, get someone who’s done dozens of these to walk you through it.

LMIA-Exempt Options Under the International Mobility Program

Not every international hire needs an LMIA. The International Mobility Program (IMP) covers categories where the government has basically said, “We’re fine with this; skip the labour market test.”

Common LMIA-exempt categories Canadian employers actually use

CUSMA/USMCA professionals: Certain occupations for US and Mexican citizens.
Intra-company transferees: Executives, managers, and specialized knowledge staff transferring from a related foreign entity.
Significant benefit cases: Where there’s a clear benefit to Canada (narrow and often lawyer-heavy).
Francophone Mobility: French-speaking workers destined for certain regions outside Quebec.
Post-Graduation Work Permit (PGWP) holders: Already here and allowed to work, no LMIA from you.

With LMIA-exempt hiring, you still have employer obligations:

File the employment offer directly using the IRCC employer online portal.
Pay the employer compliance fee.
Keep records and be ready for compliance inspections.

LMIA-exempt doesn’t mean “no rules”. It just means different rules.

Closed vs Open Work Permits: Why You Should Care

Work permits come in two primary types, which affect your risk and retention strategy.

Employer-specific (closed) work permits

These are your company name and location. The worker is tied to you.

You’re usually linked to an LMIA or an LMIA-exempt job offer.
If they want to change employers, they often need a new work permit.

Nice for retention, but also a big responsibility; you’re on the government’s radar.

Open work permits

These don’t tie the worker to a specific employer. Common examples:

PGWP for recent grads.
Spousal open work permits.

From your perspective, they’re easier to hire, no sponsorship stress, but easier to lose to a competing employer, too.

Global Talent Stream: The Fast Lane for High-Skilled Roles

If you’re in tech or hiring high-skilled talent, the Global Talent Stream (GTS) under the TFWP might be your best friend if you qualify.

Why employers like GTS

Priority processing (work permits are often processed in weeks, not many months).
Explicitly designed for in-demand, high-skilled roles.
More predictable than some other LMIA paths for specific NOC codes.

What GTS expects from you

Meeting criteria as an eligible employer or having a designated referral partner.
Creating and following a Labour Market Benefits Plan (things like training Canadians, knowledge transfer, etc.).
Paying at or above the prevailing wage for that occupation.

GTS is not a bypass around responsibility; it’s just a faster, more specialized lane.

Employer Obligations Once the Worker Arrives

Getting the work permit approved is not the finish line. It’s the starting gun for compliance.

What you must actually deliver on

Wages: Pay at least what you promised in the LMIA or job offer.
Duties and occupation: The actual job must match the approved role.
Location and hours: You can’t quietly move them to a different city or slash their hours if it changes the nature of the job.
Record-keeping: Keep detailed files for several years, including offers, pay records, timesheets, proof of benefits, and related materials.

IRCC and ESDC can audit you. Not just massive corporations, regular SMEs too. If they decide to inspect, they’ll want to see that everything matches what you promised in writing.

What happens if you don’t comply

Fines (not tiny ones).
Being banned from hiring foreign workers for a period.
Your company name may be publicly listed as non-compliant.

That last point? Brutal for reputation. Especially in tight-knit industries.

Contracts, HR, and Employment Standards for International Hires

Once someone is working in Canada, they’re covered by provincial or federal employment law, not just whatever you write into a contract.

Things your employment contracts should deal with, clearly

Position, duties, and location (aligned with immigration filings).
Wages, bonuses, and benefits.
Probation period and conditions.
Termination clauses that actually comply with local law (Ontario ESA if you’re here).
What happens if a work permit isn’t renewed or a PR is refused?

Many employers forget that last one. Then they end up in difficult conversations when a permit is expiring, and no one planned for it.

Avoiding the “contractor” trap

Labeling someone a contractor to avoid payroll deductions and benefits does not work if their day-to-day reality is that of an employee. You risk:

Back taxes and CPP/EI contributions.
Employment standards claims (overtime, vacation, termination pay).
Immigration complications if the worker claims “employee” in one place and “contractor” in another.

If they’re key to the business, work regular hours, use your tools, and report to your managers, treat them as employees. Build your cost model accordingly.

Students, PGWPs, and “Easier” International Hires

If you’re in a city like Toronto, your easiest international hires may already be here on student or graduate permits.

International students

They can work limited hours during studies (subject to IRCC rules, which have changed a few times).
They usually have restrictions; you can’t treat them as full-time, permanent staff unless they’re legally allowed to work those hours.

Post-Graduation Work Permit (PGWP) holders

Goldmine for many employers. They’ve studied here, often speak English or French fluently, and already hold an open work permit.

No LMIA from you.
You can hire them as you would a citizen or PR and verify the validity of their permit.
Many are planning to apply for permanent residence (PR) through Express Entry or a Provincial Nominee Program.

If you have a great PGWP employee, supporting their PR strategy, letters, and job offers, and providing clarity on the role and compensation, helps you retain them long-term.

Long-Term Strategy: Work Permit Today, PR Tomorrow

If this hire is critical, you don’t want to think only 1–3 years out. You want them stable, not panicking every time a permit’s expiration date approaches.

How employers can support PR pathways

Offer permanent, full-time employment that meets program requirements.
Align job titles and duties with appropriate NOC/TEER levels.
Work with counsel to structure job offers that support Express Entry or PNP employer streams.

This isn’t only about being nice. It’s about retention. Talented foreign workers pay close attention to which employers actually help them with permanent residence and which ones say “we’ll see” until the last minute.

Remote vs In-Canada: Tax, Payroll, and Practical Differences

Back to the remote question, which is where many owners get stuck.

If the worker stays abroad

No Canadian work permit.
Likely no Canadian payroll deductions (CPP, EI, income tax) if they’re not resident here.
You may need local advice in their country for:

Employment law.
Tax obligations for your company.
Whether you’ve accidentally created a taxable presence there.

If the worker relocates to Canada

They’ll usually need a Social Insurance Number (SIN) before you run payroll.
You handle CRA source deductions like any other employee.
Provincial health coverage (e.g., OHIP in Ontario) often begins after specified waiting periods.

You can’t fix tax mistakes with a friendly apology letter later. Sort this early with your accountant and, if needed, cross-border tax specialists.

Rough Timelines: How Long Is This Going To Take?

No one can promise exact timing; processing times move. But you need rough expectations.

Basic LMIA + work permit from abroad: Several months is common.
Global Talent Stream: Often faster, but still not overnight.
LMIA-exempt CUSMA professional: Can be relatively quick, depending on the situation and point of application.
Intra-company transfers: Again, usually faster than regular LMIAs if structured right.

So don’t promise a candidate, “We’ll have you here in 4 weeks,” based solely on optimism. Build conservative timelines into your project planning.

Red Flags and Common Mistakes to Avoid

If you remember nothing else, remember these “don’t do this” items.

Allowing a worker to start in Canada before their work permit is approved (unless a specific rule or program permits it).
Changing job duties, pay, or location significantly without checking if it affects immigration conditions.
Letting work permits quietly expire because “they’ll sort it out themselves”.
Filing LMIAs or work permit applications with inconsistent information between forms, contracts, and job ads.
Ignoring inspection notices or emails from IRCC/ESDC.

Most horror stories you hear from other business owners weren’t bad luck. They were unforced errors.

When You Should Stop DIY’ing and Ask for Legal Help

Many smaller, straightforward situations can be handled in-house if your HR or leadership team is methodical and has time to learn. But there are clear cases where DIY is more expensive than getting proper advice.

Situations where legal help is usually smart

First time using LMIA or Global Talent Stream.
Complex corporate structures or intra-company transfers.
With multiple foreign hires per year, you’re effectively building a mini immigration program.
Previous refusals, past compliance issues, or messy worker histories.
Trying to tie work permits, PR, and corporate growth strategy together.

You don’t need to hand your whole HR function to a law firm. But you want someone who knows the system to help design the playbook, so that your team can execute with fewer landmines.

Setting Up a UK Branch for International Businesses

Quick Employer Checklist: Hiring an International Employee for Your Canadian Business

Keep this as a rough reference. Not legal advice, not exhaustive, but a decent sanity check.

Define the role properly

Title, duties, location, salary range.
Match to an appropriate NOC/TEER code.

Decide remote vs relocation.

If remote abroad: get tax/employment advice where they live.
If relocating to Canada, continue down this list.

Check the candidate’s current status.

Already in Canada with work authorization (PR, PGWP, spousal open work permit)?
Outside Canada, or no work rights yet?

Choose the immigration pathway.

LMIA under TFWP (regular or Global Talent Stream)?
LMIA-exempt under IMP (CUSMA, intra-company transfer, Francophone Mobility, etc.)?

Prepare your side of the application

Job offer details, contract, and recruitment records.
Employer Portal submissions and fees for LMIA-exempt cases.
LMIA application package, if needed.

Align HR and legal

Ensure the employment contract aligns with the immigration filings.
Plan payroll, CRA deductions, and benefits from day one.

Onboard and document

Copy of work permit, SIN, and contact details.
Please provide them with clear information on whom to contact regarding future renewals/PR.

Think long term

Do you want them long-term? Start planning PR support early.
Calendar reminders well before any permit expiry dates.

International hiring isn’t just “posting your job on a global board.” It’s a mix of immigration law, HR, and tax, tailored to your business needs. If you treat it like a one-click admin task, you’ll pay for it later, usually with delays, refusals, or a worker you can’t legally keep.

If you treat it like a strategic move, get the proper guidance early, and build a repeatable process, you’ll end up with something far better: a talent pipeline your competitors are too nervous or too disorganized to build.