Bill MacGregor
Partner
Certified Specialist - Citizenship & Immigration Law (Immigration)
Guide
23
Immigration issues should be considered well in advance whenever a foreign entity or worker wishes to enter Canada to do business. The most appropriate immigration strategy and entry option will need to be identified. It must also be determined whether the foreign national requires a work permit or if they may enter Canada as a business visitor. Canada's immigration legislation and programs are designed to assist business people and foreign skilled workers with their entry into Canada. The Canadian system also facilitates the entry of foreign entities and business people seeking to start new businesses or subsidiaries in Canada.
The IRPA and its regulations affect business operations, human resource planning and potential liability. For example, the legislation influences:
Generally, no person other than a Canadian citizen or permanent resident may work in Canada without valid authorization. As such, the first question to ask is whether or not a foreign national entering Canada requires a work permit.
A work permit is a document that specifies the entity that the foreign national is legally entitled to work for, the occupation and the location of employment in Canada. The work permit also has a specific validity period and sets out conditions that the foreign national must not breach.
The distinction between a genuine business visitor and a foreign national requiring a work permit is not always clear. Under the IRPA, "work" has a broad definition: "an activity for which wages are paid or commission is earned, or that competes directly with the activities of Canadian citizens or permanent residents in the Canadian labour market." Business visitors are typically foreign nationals who enter Canada temporarily to engage in international business activities for a short time. These individuals must meet the following general criteria:
A foreign national will usually be allowed entry as a business visitor if the purpose of their entry falls under one of the following activities (note this is a non-exhaustive list of potential business visitor activities):
If, after assessing the person and the purpose of their entry, it is determined that a work permit is required, the next step is to determine whether there is any work permit category under the IRPA, under an international agreement (such as CUSMA or CETA) or under any government program that fits the situation. If there is no suitable category available, the employer must first apply to Service Canada to obtain a Labour Market Impact Assessment which allows employment to be offered to a foreign national instead of to a Canadian citizen or permanent resident.
Generally, the goal is to avoid the LMIA process if possible and to use a non-LMIA work permit category instead if one can be utilized.
The application for an LMIA must be prepared with great care. The entity wishing to hire or engage the foreign national must usually demonstrate that it has met Service Canada's recruiting requirements, and that the wage being offered meets the prevailing wage rate for the occupation and the location where the foreign national will work.
Service Canada reviews a number of factors when assessing an LMIA application, including whether:
If an LMIA is granted by Service Canada, it can then be used to obtain a work permit. However, if the foreign national will be working in Québec, special rules apply. Usually, in addition to the LMIA from Service Canada, a Québec Acceptance Certificate (CAQ) must be obtained from Québec authorities.
Canada also offers a special LMIA program called the Global Talent Stream (GTS LMIA) that is designed to help companies hire I.T. workers and some types of engineers. The Global Talent Occupations List includes software managers, software engineers, software developers, programmers, web designers, systems analysts, database analysts, network technicians, computer engineers, civil engineers, electrical and electronics engineers, mining engineers and aerospace engineers. A GTS LMIA may be used to obtain a work permit. A company using this program must develop and implement a Labour Market Benefits Plan that Canadian authorities sign off on, which commits the company to undertake activities that will have a positive impact on the Canadian labour market. A stated goal of the GTS LMIA program is to provide two week processing for both the GTS LMIA and the subsequent work permit application.
There are a number of potential LMIA-exempt work permit categories that businesses seeking to hire or bring foreign workers into Canada may be able to use. Some of the main categories are listed below.
This work permit category is useful for transferring managerial or specialized personnel to Canada from a related foreign entity.
The general rules are:
Initial work permits are usually granted for up to a three-year period. There are time caps that may limit the overall length of time that a foreign national may stay in Canada under this category. Executive or managerial transferees have a time cap of seven years, while "specialized knowledge" transferees may be in Canada for up to five years.
This work permit category is often used when a foreign company wishes to start doing business in Canada. When setting up the corporate and ownership structure of a new business in Canada, it should be designed in such a way as to allow for the use of this type of work permit. There are special rules for startup situations where the Canadian branch or subsidiary has recently been set up - for example, the initial work permit will be granted for only one year so that the viability of the Canadian operation may be examined prior to granting a renewal of the work permit.
In October 2024, IRCC made substantial changes to the guidelines for intra-company transferee work permits. The changes placed stricter requirements on this category.
CETA contains mobility and work permit provisions that may assist the entry into Canada of citizens of EU members. CETA includes special work permit provisions for the entry of investors, graduate trainee transferees, contractual service suppliers and independent professionals. CETA also provides enhanced business visitor entry options, including the entry of business visitors for investment purposes.
Canada has entered other FTAs that contain mobility provisions. These include FTAs with Peru, Chile, Colombia, Panama, Ukraine, the United Kingdom and South Korea, as well as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Each FTA contains provisions that may assist eligible professionals to obtain work permits. Some FTAs also have special provisions to assist with obtaining intra-company transferee work permits.
This category may be used to obtain a work permit for a foreign national whose speaking and listening skills in French are at an intermediate level and who will be working in a province or territory outside of the province of Québec. The job in Canada does not have to require French language skills. This category can be used for any position or occupation (including low-skill positions) except for jobs in primary agriculture. Proof of French proficiency needs to be provided.
These work permit categories are potentially available to American and Mexican applicants who will be employed in Canada by enterprises with an American or Mexican nationality. In this instance, American or Mexican nationality means that at least 50 per cent of the entity established in Canada must be held by American or Mexican citizens or entities.
For the CUSMA (formerly NAFTA) investor category, the foreign national applicant must (i) be seeking entry solely to develop and direct the enterprise - "develop and direct" means that the applicant should have controlling interest in the enterprise - or (ii) if an employee is in a position that is executive or supervisory, or that involves essential skills. However, a one-year work permit may be granted to an employee not possessing essential skills if the employee is needed for the startup of a new enterprise, such as a technical employee needed to train Canadians who will be hired by the new business.
As well, a substantial investment has to be made. There is no set rule on what constitutes a "substantial" investment; it will depend on the circumstances and the nature of the business. The objective of the CUSMA investor category is to promote productive investment in Canada. Therefore, an applicant is not entitled to this status if the investment, even if substantial, will produce only enough income to provide a living for the applicant and the applicant's family.
For the CUSMA trader category, the applicant must be entering Canada to carry on substantial trade in goods or services principally between Canada and the United States or Mexico. To be "substantial trade," over 50 per cent of the total volume of trade conducted by the entity in Canada must be between Canada and the U.S. or Mexico. The applicant must be employed in a capacity that is executive or supervisory, or that involves essential skills or services.
Initial applications under this category must be made to a Canadian visa office outside of Canada. The initial work permit is issued for a maximum of one year, with extensions granted for two years at a time. Generally, the intra-company transferee category is a preferable option. However, in situations where the corporate structure does not support that category or where the applicant has not worked for the related foreign company for at least 12 months, the CUSMA investor or trader category may provide a solution.
There is a work permit category available for entrepreneurs who wish to enter Canada temporarily to operate a business that will generate significant economic, social, or cultural benefits or opportunities for Canadians. The entrepreneur must control at least 50 per cent of the business. This category may also be utilized by eligible self-employed foreign nationals seeking entry to Canada.
Spouses (including common-law and same-sex spouses) of most foreign nationals working in Canada may apply for an open- work permit under the spousal employment program. This program may assist companies in their recruiting efforts since accompanying spouses will usually be able to work in Canada.
Many foreign workers who obtain work permits in Canada wish to apply for permanent resident status. Canada's permanent resident rules are designed to help foreign nationals transition to permanent status. If permanent resident status is obtained, the foreign national no longer requires a work permit to work in Canada.
Canada historically had permanent resident programs aimed at business people - investors and entrepreneurs - but those federal immigration categories were shut down. However, some of Canada's provinces have immigration programs for entrepreneurs.
If a foreign national intends to settle in Québec, they will need to qualify for permanent resident status under Québec's immigration system. Québec offers skilled worker categories as well as programs for investors and entrepreneurs. There are also special programs offered by other provinces that may lead to permanent resident status.
Canadian provinces and territories have provincial nominee programs (PNPs) in place. Each of these provincial programs is different, but generally the PNPs are designed to facilitate the recruitment of foreign skilled workers who are able to address skills shortages within the nominating province. Foreign nationals who qualify under a PNP are able to apply for permanent resident status using the nomination from the province. If a foreign national is nominated under a PNP, he or she may obtain a work permit while the permanent resident application is being processed.
Some PNPs also have categories for business people or entrepreneurs. Each of these PNPs has its own unique eligibility requirements and criteria, but the goal is to attract experienced business people or entrepreneurs to purchase or set up businesses that will create employment for Canadians.
There are a number of other immigration considerations that need to be reviewed when bringing a foreign worker to Canada or travelling to Canada for business purposes.
Depending on the citizenship of the foreign national, an entry visa - called a Temporary Resident Visa or TRV - may be required before the person can travel to Canada. Business visitors from countries that require a TRV must apply online and obtain the TRV before travelling to Canada. If the foreign national needs a work permit and is from a TRV required country, they must apply online for work permit and the TRV will be issued as part of the work permit application process.
Most visa-exempt travelers flying into Canada must first obtain an eTA. The eTA must be obtained through an online application process prior to being able to board a plane to Canada. Once obtained, the eTA will be valid for up to five years. There are no eTA requirements for U.S. citizens, U.S. permanent residents or foreign nationals with entry visas/ TRVs.
Most applicants for entry/visitor visas, study permits, work permits or permanent residence will need to provide biometrics as part of the application process. Biometrics will be valid for 10 years from the date they are provided. U.S. nationals seeking work permits or study permits are exempt from the biometrics requirement.
Foreign nationals who have lived in certain designated countries for more than six months in the 12 months prior to the application, and who are coming to Canada for more than six months, require an immigration medical as a condition of entry. This requirement may delay the application process, as a work permit applicant who needs an immigration medical must usually apply through a visa office outside of Canada.
A foreign national (and any accompanying dependants) seeking entry to Canada may be inadmissible due to criminal convictions, medical conditions or prior entry refusals. If any of these potential admissibility issues apply to a foreign national, the situation must be assessed well in advance to determine whether entry is possible. Where a candidate is inadmissible due to criminality, steps can sometimes be taken to remedy the situation depending upon the seriousness of the offence, the length of time since it occurred and the number of convictions.
The accompanying spouse and children of a foreign worker will need to obtain immigration documentation. Spouses will usually qualify for an open work permit under the spousal employment program. Children who will attend school will need a study permit or a visitor record. Accompanying children may also qualify for an open work permit, allowing them to work.
Once a work permit is obtained, the ongoing status of foreign nationals working in Canada must be carefully monitored to ensure that a renewal of the work permit is obtained well in advance of its expiry date. If an LMIA is the basis for the work permit, a new LMIA will need to be obtained before the work permit may be renewed.
Any change to a foreign worker's job in Canada - such as a change in position, remuneration, duties or work location - must be assessed in advance to determine if a new LMIA and/or new work permit is needed. In addition, corporate changes such as a merger or a restructuring may require a new LMIA or a new work permit depending on the circumstances of the change.
Employers that engage foreign workers under employer-specific closed work permits must ensure they meet all compliance requirements placed on them. Federal legislation puts employer conditions in place that employers must abide by, and provides for random inspections of employers to check for compliance. Some provinces also have legislation to protect foreign workers.
There are numerous practical considerations beyond identifying the proper immigration or work permit category to use.
It is imperative to put together a strong application package when applying for an LMIA or a work permit. By ensuring that an application is well documented and complete, the likelihood of it being approved is significantly increased. The extent and content of the material included in the application will depend on the work permit category and the particular circumstances of each situation.
Offers of employment and employment contracts for foreign workers must be carefully crafted. Offers of employment to foreign workers should be made conditional on the worker obtaining a work permit and maintaining valid status to work in Canada. Transferred employees and foreign hires should be required to sign an employment contract during the hiring process to govern the employment relationship.
Different tax rates or dual tax-filing obligations may need to be addressed in intra-company transfer situations. As well, there may be tax issues or withholding issues for the company or for personnel whenever services are being rendered in Canada by a foreign national - even where the foreign national may not be directly remunerated in Canada. Business people seeking to set up a business or immigrate to Canada will also need to obtain tax advice.
In Canada, health coverage is provided by provincial governments. Transferees or foreign national hires on work permits and their dependents will usually be eligible for public health coverage. The eligibility rules vary by province and private coverage should be arranged prior to entry to cover any waiting period. Extensions of work permits should be obtained early to avoid potential disruption in public health coverage.
Foreign workers need a social insurance number to be paid employment income in Canada. It may be obtained from a local Service Canada office. A work permit must be obtained prior to applying for a social insurance number. Foreign workers are issued SINs that begin with a "9", which are valid until the expiry date listed on the work permit.
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