Under the Immigration and Refugee Protection Act ("IRPA") and the Immigration and Refugee Protection Regulations ("Regulations"), which came into effect on June 28, 2002, there are special cases when employers are required to apply for an "opinion" from Human Resources and Skills Development Canada ("HRSDC") in order to hire a foreign national and facilitate their entry with Citizenship and Immigration Canada ("CIC"). The two types of opinions are an Arranged Employment Opinion ("AEO") and a Labour Market Opinion ("LMO").

Section 82(2)(c) of the Regulations sets out the conditions that must be met in order to apply for an Arranged Employment Opinion: "the skilled worker does not intend to work in Canada before being issued a permanent resident visa and does not hold a work permit and (i) the employer has made an offer to employ the skilled worker on an indeterminate basis once the permanent resident visa is issued to the skilled worker, and (ii) an officer has approved that offer of employment based on an opinion provided to the officer by HRSDC at the request of the employer or an officer that (A) the offer of employment is genuine, (B) the employment is not part-time or seasonal employment, and (C) the wages and working conditions of the employment would be sufficient to attract and retain Canadian citizens."

A positive HRSDC AEO supports the permanent residence application of a Skilled Worker. However, a positive HRSDC AEO does not result in CIC issuing a work permit and does not authorize the foreign national to work in Canada before becoming a permanent resident.

Section 203 (1) to (3) of the Regulations sets out the CIC conditions that must be met in order to apply for an LMO: "on an application for a work permit, an officer (of CIC) shall determine, on the basis of an opinion provided by the Department of HRSDC, if the job offer is genuine and if the employment of the foreign national is likely to have a neutral or positive economic effect on the labour market in Canada." HRSDC provides the LMO based on the request of an officer or an employer or group of employers. A request may be made in respect of (a) an offer of employment to a foreign national, and (b) offers of employment made, or anticipated to be made, by an employer or group of employers. The LMO provided by HRSDC shall be based on the following factors: (a) whether the work is likely to result in direct job creation or job retention for Canadian citizens or permanent residents; (b) whether the work is likely to result in the creation or transfer of skills and knowledge for the benefit of Canadian citizens or permanent residents; (c) whether the work is likely to fill a labour shortage; (d) whether the wages and working conditions offered are sufficient to attract Canadian citizens or permanent residents to, and retain them in, that work; (e) whether the employer has made, or has agreed to make, reasonable efforts to hire or train Canadian citizens or permanent residents; and (f) whether the employment of the foreign national is likely to adversely affect the settlement of any labour dispute in progress or the employment of any person involved in the dispute."

A positive HRSDC LMO is a factor that CIC considers when deciding whether to issue a work permit to the foreign national. A positive HRSDC LMO and a work permit may also be used to support the permanent immigration of a Skilled Worker. In this situation, the employer is required to hire the worker before the foreign national becomes a permanent resident of Canada.

In the special cases of LMOs and AEOs, employers must be aware that HRSDC and CIC both utilize the National Occupational Classification ("NOC") system to categorize jobs or occupations. HRSDC reviews the wages and employment conditions that the employer is offering the foreign national and compares them to wages paid and employment conditions for Canadians in the same occupation. If the employer is offering wages below rates paid to Canadians in the occupation or fails to meet employment conditions that are consistent with federal and/or provincial standards for the occupation and workplace, HRSDC will not provide a positive LMO or AEO.

From a practical standpoint, HRSDC has set forth the following fundamental differences between LMOs and AEOs:

When applying for an LMO: advertising for the position is needed; there is the need to prove there is a shortage of skilled Canadians or permanent residents; the employer needs to recruit Canadians or permanent residents; the foreign national is able to start work as a temporary foreign worker only after CIC has issued a work permit; the employer does not need to provide the copies of remittance forms (Form PD7A) issued by the Canada Customs and Revenue Agency ("CCRA"), itemizing source deductions for the previous 12 months; the employer does not need to prove they have employed anyone in the past; the employer does not need to prove length of time in business; the labour market impact is a major consideration; the employer does not need to have a presence in Canada; the job can be seasonal; the occupation can be in any NOC Skill Level; and, generally, HRSDC does not consider work that may be facilitated pursuant to a CIC exemption.

When applying for an AEO: no advertising for the position is needed; there is no need to prove there is a shortage of skilled Canadians or permanent residents; there is no need to recruit Canadians or permanent residents; the foreign national must secure permanent resident status from CIC before starting the job; the employer needs to provide the copies of remittance forms (Form PD7A) issued by the CCRA, itemizing source deductions for the previous 12 months; the employer needs to have employed at least one person over the course of the past year; the employer needs to provide evidence that the business has been in operation for more than one year (by providing any one of the following documents: business licenses spanning more than 12 months, CCRA T4 [Summary of Deductions] for the previous year, commercial lease agreement for the business location); the labour market impact is not a consideration; the employer must have a presence in Canada; the employment is full-time and not seasonal; the occupation must be in NOC Skill Level 0, A or B; and CIC exemptions from the LMO requirement do not apply. HRSDC can consider work that could be exempt from needing an LMO. However, the foreign national should not work in Canada for the employer before receiving a permanent resident visa.

In September 2003, CIC did propose regulatory amendments to amend certain provisions regarding LMOs and AEOs. However, the proposed regulatory amendments have not as yet come into effect.