Free trade agreements help those who want to work in Canada, but the Trump presidency could impact Americans

On Oct. 30, 2016, Canada and the European Union signed the Comprehensive Free Trade Agreement (CETA), which, amongst other things, will make it easier for European Union citizens to work in Canada without their employers first needing to obtain labour market impact assessments (LMIA).

CETA is only the latest free trade agreement that Canada has signed.  One of the first steps that a foreign national who is interested in working in Canada should do is determine whether their home country has signed a free trade agreement with Canada. If so, they should check if the agreement encompasses their specific area of employment.

LMIA vs. free trade agreements

The main benefit of a free trade agreement encompassing one’s employment is that the person’s potential Canadian employer does not need to first obtain a positive or neutral LMIA prior to the foreign worker being able to obtain a Canadian work permit.

LMIAs can be a very cumbersome process. They generally require that an employer conduct domestic recruitment, meet prevailing wage requirements, complete numerous application forms, enter into a transition plan, and pay a $1,000 per foreign worker application fee. For many employers, obtaining LMIAs is simply too great an obstacle to employing foreign nationals in Canada.

It is much easier for employers to employ workers who are encompassed by free trade agreements. Employers must simply enter information about the proposed job offer into the Immigration, Refugees and Citizenship Canada website, pay a $230 employer compliance fee and provide a written job offer to the prospective employee.

Free trade agreements

As of writing, Canada has free trade agreements that contain immigration provisions in force with the United States, Mexico, Chile, Peru, Colombia and South Korea.

The North American Free Trade Agreement (NAFTA) is a free trade agreement between the United States, Canada and Mexico. It provides that Mexican and American citizens can obtain three-year work permits (with unlimited extensions) if they are coming to work in Canada in one of 63 skilled professions, including accountant, computer systems analyst, economist, engineer, graphic designer, management consultant, mathematician, scientific technician, pharmacist, psychologist, registered nurse and teacher.

I once represented a Canadian design company that was debating between either hiring a Mexican or a British engineer. They had assumed that it would be easier for the company to hire the British person. However, because Canada does not actually have a free trade agreement with the United Kingdom in force (yet), it was actually much easier to hire the person from Mexico. The company decided to go with to the Mexican engineer.

The Canada-Chile Free Trade Agreement is substantially the same as NAFTA in regards to foreign workers, while Canada’s free trade agreements with Colombia and Peru are far broader than NAFTA. Colombian and Peruvian professionals can work in any skilled position in Canada for three years (with no limits on extensions), except for certain health, education, social services and cultural industries. As well, a wide range of technicians can work in Canada without LMIAs, including engineering technologists, certain trades supervisors, chefs, carpenters, mechanics, etc. Indeed, for the foreseeable future, it will likely be easier for a Canadian employer to employ a Colombian or Peruvian then a citizen of any other country.

Both the Canada-Korea Free Trade Agreement (CKFTA) and CETA adopt a different approach to the entry of foreign workers. Both require that skilled foreign workers be entering Canada as either contract service suppliers or independent professionals. South Koreans can get three-year work permits, while European Union citizens can get one. When the CKFTA came into force, many South Koreans who otherwise might not have been able to extend their Post-Graduate Work Permits were able to continue to working in Canada; given the wording of CETA, it seems like the same will be true for them.

Countries under GATS

In addition to the above free trade agreements, Canada is a signatory to the General Agreement on Trades and Services (GATS). Under GATS, citizens whose country is one of the 164 members of the World Trade Organization can obtain a 90-day work permit to work in Canada as an engineer, agrologist, architect, forestry professional, geomatics professional, land surveyor, urban planner and senior computer specialist.

Upcoming agreements

Finally, Canada is also a signatory to the Trans-Pacific Partnership, although it has not yet been ratified. If Canada does, then most Australian, Chilean, Japanese and Mexican skilled workers will be able to work in Canada on up to one-year work permits, which can be renewed. Most Malaysian managers and professionals will be able to as well.

Although the United States, New Zealand and a few other countries are also signatories to the TPP, those nations decided to not facilitate the entry of Canadian workers, so Canada will not be providing those nations’ citizens any new LMIA exemptions.

The Trump effect

At this point, it is necessary to discuss the consequences of the election of Donald Trump as the next president of the United States.  If there is one thing that Trump has been consistent on during the past several decades, it is that he loathes free trade agreements. Trump has promised to not ratify the TPP, whose future is now uncertain.  He has also promised to either restrict NAFTA or to even outright withdraw the United States from it.

Perhaps the best example of how significant free trade agreements can be in an immigration context is that since the election of Donald Trump, our office has received numerous phone calls from concerned Americans currently in Canada wanting to know what will happen to their ability to continue working here if Trump fulfills this promise.

How to apply

So, how can one determine if they’re encompassed by a free trade agreement? The best way to do this is to search “IRCC Free Trade Agreements” on any search engine, and to then click on the link that says “International Mobility Program: International Free Trade Agreements.” This is an IRCC webpage that provides information on the foreign worker provisions of all free trade agreements, including documentary requirements.

Understanding the material on this website can often be the difference between a long and cumbersome process versus a straightforward one, and even becoming a foreign worker and not.


Intra-Company Transfers – Specialized Knowledge

On June 9, 2014, Citizenship and Immigration Canada (“CIC”) published Operational Bulletin 575 – Expanded Guidelines for Officers Assessing Work Permit Applications for Intra-Company Transferees with Specialized Knowledge (“OB-575“).  OB-575 introduced more stringent requirements to the Intra-Company Transferee (“ICT“) – Specialized Knowledge program.  Specifically, what constitutes “specialized knowledge” is more restrictive, and most ICT – Specialized Knowledge applicants must now meet the Prevailing Wage.

Specialized Knowledge

Previously, CIC’s Temporary Foreign Worker Manual (“FW1“) specified that ICT – Specialized Knowledge applicants must demonstrate “specialized knowledge” of a company’s product or service and its application in international markets, or an an advanced level of knowledge or expertise in the organization’s processes and procedures.

Effective immediately, OB-575 requires that ICT – Specialized Knowledge applicants demonstrate a high degree of both proprietary knowledge and advanced expertise.  Specialized knowledge is unique and uncommon, and OB-575 states that “it will by definition be held by only a small number or a small percentage of employees of a given firm,” and that “specialized knowledge workers must therefore demonstrate that they are key personnel, not simply high skilled.”  The onus is on applicants to provide evidence that they meet these requirements.

Proprietary knowledge is company-specific expertise related to a company’s product or service.  OB-576 specifically notes that it implies that the company has not divulged specifications that would allow other companies to duplicate the product or service. Although OB-575 does not mandate that “advanced proprietary knowledge” is required, it states that:

Advanced proprietary knowledge would require an applicant to demonstrate:

  • uncommon knowledge of the host firm’s products or services and its application in international markets; or
  • an advanced level of expertise or knowledge of the enterprise’s processes and procedures such as its production, research, equipment, techniques or management.

An advanced level of expertise requires specialized knowledge gained through significant and recent (defined as within the last 5 years) experience with the organization and used by the individual to contribute significantly to the employer’s productivity.  OB-575 notes that:

In assessing such expertise or knowledge, officers consider:

  • abilities that are unusual and different from those generally found in a particular industry and that cannot be easily transferred to another individual in the short-term;
  • the knowledge or expertise must be highly unusual both within the industry and within the host firm;
  • it must be of a nature such that the applicant’s proprietary knowledge is critical to the business of the Canadian branch and a significant disruption of business would occur without the applicant’s expertise;
  • the applicant’s proprietary knowledge of a particular business process or methods of operation must be unusual, not widespread across the organization, and not likely to be available in the Canadian labour market. Example: Skill in implementing an off-the-shelf product would not, by itself, meet the standard of specialized knowledge; unless, for example, the product is new or being highly customized to the point of being a “new” product. In other words, an ICT applicant is more likely to have truly specialized knowledge if they directly contribute to the (re)development of a product, rather than to the implementation of a pre-existing product.

In what is clearly a response to the RBC/iGate fiasco, OB-575 also mandates that officers consider:

  • ICT Specialized Knowledge workers must be clearly employed by, and under the direct and continuous supervision of, the host company;
  • given the nature of specialized knowledge, the worker will not normally require training at the host company related to the area of expertise; and
  • as the specialized knowledge will not be readily available within the Canadian labour market, and cannot readily be transferred to another individual, a specialized knowledge worker must not receive specialized training by other employees such that this would lead to the displacement of Canadian workers.

The following is an example of the approval reasons of an ICT – Specialized Knowledge applicant.  I note that this was not my file, as it is not my practice to post my own cases on this blog. Rather, this case was obtained through an Access to Information Act request.

A201433267_2015-12-18_08-29-36

Mandatory Wage Floor

Effective immediately, ICT – Specialized Knowledge applicants must be paid the Prevailing Wage for their position.  Non-cash per diems, including hotel and transportation, are not to be included in the calculation of the overall salary.

This is perhaps not surprising.  There has been a huge disparity in the wages being provided to Intra-Company Transferees, especially in companies transferring Indian, mainland Chinese, or Filipino workers.  In 2013 Citizenship and Immigration Canada produced a chart for internal use documenting this, as reproduced below.

A201412451_2015-04-28_07-56-04_Page_06

Free Trade Agreements

It is important to note that the above changes do not impact ICT – Specialized Knowledge applicants under Free Trade Agreements, including the North American Free Trade Agreement.  This is because such agreements, which are negotiated between Canada and other countries, specify what the requirements for ICT – Specialized Knowledge applicants are. However, in interpreting those agreements, wage remains an important indicator of specialized knowledge and should be taken into account as an important factor in an officer’s overall assessment.


Intra-Company Transferees and Start-Ups

Immigration Refugees and Citizenship Canada’s (“IRCC“) International Mobility Program provides that a foreign worker may be issued a work permit without the employer needing a Labour Market Impact Assessment if the employee meets the requirements of the Intra-Company Transferees (“ICT“) program.

Although some free trade agreements contain specific requirements, the general ICT rules applicable to citizens of all countries are that ICTs must:

  • be currently employed by a multi-national company and be seeking entry to work in a parent, a subsidiary, a branch, or an affiliate of that enterprise;
  • be transferring to an enterprise that has a qualifying relationship with the enterprise in which they are currently employed, and will be undertaking employment at a legitimate and continuing establishment of that company (where 18–24 months can be used as a reasonable minimum guideline);
  • be being transferred to a position in an executive, senior managerial, or specialized knowledge capacity;
  • have been employed continuously (via payroll or by contract directly with the company), by the company that plans to transfer them outside Canada in a similar full-time position (not accumulated part-time) for at least one year in the three-year period immediately preceding the date of initial application; and
  • be coming to Canada for a temporary period only.

Applicants who have not had full-time work experience with the foreign company may still be approved based on an assessment of several factors, including the number of years of work experience with the foreign company, the similarity of the positions, the extent of any part-time positions with the foreign company, and, most importantly, whether there appears to be an abuse of the ICT provisions.

Start-Ups

There are additional requirements for multi-national corporations seeking to establish operations in Canada.  When applying for an ICT Start-Up visa, applicants must demonstrate their company’s ability to become established in Canada.

Generally, the company must have secured physical premises to house the Canadian operation.  However, where the foreign worker will be an executive or senior manager, then the company may use its counsel’s address until the foreign worker can purchase or lease a premise.

The company must show that:

  • they have realistic plans to staff the new operation;
  • they have the financial ability to commence business in Canada and compensate employees.
  • in the case where managers are being transferred, that they are large enough to support several managerial or executive functions; and
  • where the transferring entity is a specialized knowledge employee, that the work is being guided and directed by a manager.

Work permits for start-ups are typically one-year, although it is not uncommon for officers to issue work permits valid for three-years where the officer is more than convinced that the operations in Canada will be successful.

I have reproduced below two examples of where CIC approved ICT applications for start-up ventures. I note that these are not my applications, as it is not my practice to post my own cases on this blog. Rather, these examples were obtained through an Access to Information Act request.

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ictstartup1

 


Increased Fees and Compliance in the International Mobility Program

On February 11, 2015, the Government of Canada publicized amendments to the Immigration and Refugee Protection Regulations that affected most applicants in the International Mobility Program (the “IMP“).

The IMP includes all streams of work permit applications that are exempt from the Labour Market Impact Assessment (“LMIA“) process, including workers covered by free trade agreements, people participating in exchange programs like International Experience Canada (“IEC“), provincial nominees, intra-company transferees, post-graduate work permit holders, etc.

In reviewing the changes described below, it is important to understand the distinction between a closed work permit and an open work permit. A closed work permit limits a foreign worker to a particular employer. An open work permit allows the foreign worker to work for any employer.

  • The changes consist of:
    • Requiring that employers of prospective closed work permit holders in the IMP provide information to Citizenship and Immigration Canada (“CIC“) before their prospective employees apply for work permits;
    • Requiring that employers of prospective closed work permit holders pay a $230.00 “employer compliance fee” per employee before their prospective employees apply for work permits; and
    • Introducing a new $100.00 “privilege fee” on open work permit applicants.

The Government of Canada has announced that the above changes will all take effect on February 21, 2015.

Continue reading “Increased Fees and Compliance in the International Mobility Program”


Question & Answer – FSW Arranged Employment and ICTs (IR-03)

The following is an e-mail exchange between an immigration representative and Citizenship and Immigration Canada regarding Arranged Employment under the Federal Skilled Worker Program for Intra-Company Transferees.  The Federal Skilled Worker Program allows certain individuals employed in Canada without a Labour Market Opinion to qualify for Arranged Employment.  As with any program, questions emerged regarding specific requirements, including whether intra-company transferees qualify for Arranged Employment without a Labour Market Opinion.

Please note that what I have reproduced below should not be viewed as legal advice.  The reproduction of question and answer has not occurred with the affiliation of the Government of Canada, nor with the endorsement of the Government of Canada.

Question – May 28, 2013

Hello,

Could you please confirm if the intra-company work permit holders in Canada can be considered to have arranged employment under the new rules (as of May 4th 2013) and could submit a FSW application based on the fact they hold ICT work permit and have an indeterminate job offer from the same employer.

Answer – May 28, 2013

Intra-company transferees in Canada who hold a valid work permit which is exempt from the Labour Market Opinion (LMO) requirement under R204(a), are working for an employer specified on the work permit and have a qualifying offer of arranged employment from the same employer are eligible to apply under the arranged employment stream under the Federal Skilled Worker Program under the new rules which came into effect on May 4, 2013 [R82(2)(b)].

All other intra-company transferees who hold a valid work permit which is LMO-exempt under R205 would also be eligible to apply provided they had a qualifying offer of arranged employment from their prospective employer, and that employer had obtained a positive LMO [R82(2)(d)].

The Immigration and Refugee Protection Regulations are actually very clear on the above.  I presume that the representative who asked the above question knew what the answer was, but wanted Citizenship and Immigration Canada to explicitly confirm this requirement for the Federal Skilled Worker Program.

I do not understood the Government of Canada’s policy rationale for why intracompany transferees under NAFTA, the Canada-Chile FTA, the Canada-Peru FTA, and other free-trade agreements are eligible under the new Federal Skilled Worker Program for Arranged Employment without a Labour Market Opinion, while general intra-company transferees are not.  When the law first came out I thought that a possible solution would be to request that officers process general intra-company transferees under the GATS agreement.  However, the Foreign Worker Manual now instructs officers to process GATS intra-company transferees under R205(a), C12, thereby excluding them from qualifying for Arranged Employment without a Labour Market Opinion.