Success Story: Solving the truck driver shortage with LMIA

THE CHALLENGE

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Initially, our client aimed to expand their Over-The-Road (OTR) division, necessitating the hiring of three additional long-haul truck drivers to operate flatbed trucks.

Challenge 1: Inefficiency in Local Recruitment and the Need to Fill Bulk Truck Driver Positions

Initially, our client aimed to expand their Over-The-Road (OTR) division, necessitating the hiring of three additional long-haul truck drivers to operate flatbed trucks.

Although they were a well-established company with a robust, in-house human resources team, our client still struggled to fill these long-haul truck driver positions through local recruitment. Despite a significant investment in advertising and offering competitive employment terms, they encountered difficulties. A few Canadian candidates began training (also provided by our client), but withdrew before completion and did not transition into full-time permanent employment. Despite a professional and amiable team and a reasonable advertisement budget, our client couldn't fill the long-haul truck driver positions.

Challenge 2: Risk of Contract Breaches Due to Labor Shortages

Having secured major contracts for long-haul transportation services for the upcoming year, our client was running out of time due to a labor shortage. It was crucial for them to hire professional and responsible truck drivers to grow the long-haul division. This task was time-sensitive, and our client risked breaching secured transportation contracts. They didn't want to lose this business opportunity because of the severe labor shortage in the trucking industry, particularly for long-haul truckers.

Our client's LMIA process and, over the years, the journey have not been static.

They applied for a Labour Market Impact Assessment (LMIA) several times before contacting our law firm. Lerom Law was chosen among five law firms to file a subsequent LMIA application. Since then, we have been assisting them with all their LMIA needs.

Challenge 3: Navigating a Highly Regulated Industry

Significant updates to safety and licensing standards in the Canadian transportation industry affected an employer’s eligibility to apply for an LMIA and truck drivers' work permit eligibility, respectively. In the majority of Canadian provinces, commercial truck drivers now needed minimum training, obtainable only in Canada. This raised new risks and concerns about the effectiveness of the truck driver LMIA. With the ultimate goal of hiring foreign truck drivers, our client faced a hurdle. Those outside Canada could not complete the required training and meet the minimum eligibility requirement for a work permit, even if they had an LMIA confirmation letter. This predicament required a solution.

Challenge 4: Expansion to New Locations

Eventually, our client expanded within Canada to additional provinces, aiming to fill long-haul truck driver positions with foreign workers. This decision involved additional considerations, such as how to continue hiring a foreign workforce in the same occupation, NOC 73300, at the company's different locations in Canada while remaining compliant with wage requirements, etc.

Challenge 5: Difficulty Reducing Reliance on Foreign Workers

By then, the milestones for their transition plans had passed, and they needed to report on the transition to the Canadian labour force and the reduction of reliance on the temporary foreign worker program. The new dilemma they faced was the necessity to hire new drivers while their transition plans were not fully implemented, given the industry shortage trends. This was almost impossible due to limited options for foreign truck drivers to become permanent residents in some provinces (e.g., suspended or changed PR programs, expiring status, etc.).

Challenge 6: Navigating Program Updates After LMIA Approval

The introduction of new measures to protect temporary foreign workers by Employment and Social Development Canada (ESDC) triggered an unexpected inspection of their previous LMIA terms compliance. This coincided with the ongoing applications, intensifying the management of multiple ESDC requests.

Below, we describe our proactive approach over time and how we helped the transportation company address various challenges in hiring and retaining foreign truck drivers as their business grows and needs change within a five-year period of time.

THE SOLUTION

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Solution 1: Providing Accurate Information About Business and Employment Terms:

When the client initially reached out to us, they believed they were quite familiar with the process and had done everything properly in their preceding LMIA. Our lawyer reviewed their previous application, identified inaccuracies, and corrected these in the new application upon the client's confirmation, applying the correct approach in all subsequent LMIA applications. The mistake lay in applying general rules by default to the highly-regulated trucking industry, which is subject to federal and provincial rules. For example, the mandatory overtime pay rate for interprovincial or cross-border truck drivers starts only after 60 hours per week. Including an incorrect number would require the employer to follow terms that might be less beneficial for them. Similarly, basing other calculations, such as the contingency wage (permitted in the trucking industry), on the wrong number could result in an incorrect per-mile remuneration rate.

Solution 2: Drafting a Realistic Transition Plan (TP) and Adhering to it

When hiring foreign workers for high-wage positions, as is the case under the High Wage LMIA stream, a plan of activities to transition to the Canadian labour force is required. Our client, who had previously been involved in this process, already had an existing plan. However, they had not fully grasped the significance of making progress towards the fulfillment of this plan, nor the repercussions of a lack of progress.

We emphasized to the client the necessity of undertaking the activities outlined in the previous plan. This understanding was particularly crucial for the long term, as they would be re-engaging with the program and would need to report on progress according to predetermined milestones. Without this, they risked being prohibited from utilizing the program for a period, which would impact their reliance on foreign truck drivers, a crucial component of their operations. For their subsequent LMIA applications, we have assisted the Trucking Company in selecting activities for their transition plan. These activities were chosen for their consistency with the company's business operations, industry trends, and the backgrounds of prospective foreign workers (if their names had already been provided by the client). We suggested, as the primary transition plan activity, to support these workers in becoming permanent residents. This is the most viable option for reducing reliance on foreign workers, particularly considering the trucking industry's labour shortage rates.

We work closely with foreign nationals, helping to identify suitable programs and apply for permanent residence. These include provincial nominee programs for truck drivers, federal programs, and recently introduced category-based draws specifically for transport truck drivers. This support has enabled the Trucking Company to meet the targets of its transition plan more quickly.

Solution 3: Staying Up-to-Date with Industry-Specific Regulations

The importance of staying up-to-date with industry-specific regulations cannot be overstated, especially considering the highly regulated nature of the trucking industry. This recommendation applies to all aspects of hiring foreign truck drivers, from eligibility for an LMIA to obtaining work permits. We informed our client of the new requirement to demonstrate compliance with safety standards and regulations for commercial trucks in Canada at the time of LMIA submission. The necessity to provide additional documents, such as a carrier profile, safety certificate (e.g., CVOR for Ontario), and fleet insurance, was also highlighted.

Solution 4: Developing Internal Hiring Guidelines for HR Team

We developed internal hiring guidelines for their HR team, covering the immigration aspects of selecting candidates post-LMIA approval to increase the chances of work permit approval. As they selected candidates, we reviewed their profiles from an immigration perspective, which significantly expedited the process and increased overall work permit approval rates as they have been hiring in bulk.

For instance, when hiring for Ontario, we recommended they either select candidates who have completed the mandatory training for commercial truck drivers or hold a license if they have previously worked in Canada. Alternatively, we suggested hiring candidates with a valid Canadian visa or from visa-exempt countries, allowing the foreign national to complete the training first, then apply for a work permit.

We also recommended hiring truck driver candidates who can score at least a CLB 6 on the language test. Although they were initially skeptical about the language test results, we explained the rationale in light of the most recent federal curt decision, which was persuasive for the client.

Solution 5: Considering Long-Term Employer Obligations when Selecting between LMIA Streams

The importance of considering long-term employer obligations when selecting between LMIA streams is crucial. Our client expanded to a province where the hourly rate for truck drivers was lower than the provincial median wage, and much lower than that in Ontario. First, since the wage is based on the job location, we advised our client that they could offer this lower wage even though it was significantly less than what they pay their drivers in Ontario, a different job location. However, we cautioned them that, while the lower wage might seem attractive at first glance, it would necessitate applying under the Low Wage LMIA stream, for which they met all requirements. Compared to the High Wage LMIA stream under which we submitted all their LMIA applications in Ontario, they would additionally need to pay for round-trip transportation, provide or arrange affordable housing, update their advertising practices, and deal with a shorter duration of employment, which would mean having to renew the LMIA more often. Based on our client’s details, we prepared a comparison of obligations and estimated costs associated with hiring truck drivers under a high-wage or low-wage stream for their new location. Ultimately, it appeared that continuing to use the High Wage LMIA, even by offering a higher wage, would be more cost-effective and better meet their needs long-term.

Solution  6: Swiftly Responding to New Regulations

The importance of swiftly responding to new regulations cannot be overstated. Hiring foreign workers adds the obligation to monitor program updates. Our client was in the process of welcoming several new temporary foreign workers to Canada when ESDC introduced new measures to protect the rights of these workers. Among these new requirements was the obligation to provide information about foreign workers' rights and to issue a signed copy of the employment agreement no later than the first day of work. We promptly informed our client about these new requirements, and they were quickly implemented on their end. Coincidentally, they underwent a compliance inspection shortly thereafter, which they successfully passed. could keep working without interruption and maintain legal status in Canada.

THE RESULT

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Our client successfully expanded its operations into other provinces, thanks to its ability to hire foreign truck drivers through efficient management of the LMIA process.

After careful planning and thorough preparation, LMIAs were approved quickly and without the need for interviews, achieving a high work permit approval rate for truck drivers. Additionally, a personalized process was created to screen candidates in line with immigration rules and industry regulations after LMIA approval.

The key to success was a proactive approach to navigating the complex LMIA requirements and regular updates, foreseeing potential issues, and managing them proactively. We helped our client to achieve::

• Improved accuracy of LMIA applications reduced the risk of rejection.
• A well-drafted Transition Plan ensured a smooth transition to the Canadian labour force.
• Internal hiring guidelines expedited the process and increased work permit approval rates.
• The High Wage LMIA stream was chosen as a cost-effective solution after comparing obligations and costs.
• Prompt updates about new requirements allowed the company to stay compliant with regulations.
• Compliance with program requirements enabled the continuation of hiring foreign workers.
• Effective management of LMIAs led to successful business growth and expansion.

In conclusion, the ultimate goal was not just getting LMIA approvals but also bringing on board foreign truck drivers to support our client’s business growth.