Last updated on September 19th, 2018
Last Updated on September 19, 2018 by Steven Meurrens
One of the less understood recruitment exemptions in the Labour Market Impact Assessment stream is the exemption for Owner / Operators of a business. The Employment and Social Development Canada website states:
Description: The owner/operator must demonstrate that he is integral to the day-to-day operation of the business and will be actively involved in business processes/service delivery in Canada. In such instances, greater consideration should be given to demonstration by the applicant (owner/operator) that such temporary entry will result in the creation or retention of employment opportunities for Canadians and permanent residents and/or skills transfer to Canadians and permanent residents.
Variation: No advertising or recruitment is required.
Applicability: All Provinces
The Temporary Foreign Worker Program Manual previously stated:
The ESDC wiki currently states:
The wiki makes it clear that the following key conditions apply to Owner / Operator LMIAs:
- ESDC must be satisfied that the foreign national is or will be a principal owner or co-owner of the business in Canada.
- The company must prove the foreign natinoal’s shareholdings.
- When assessing labour market factors, the focus is on job creation/retention and/or skills transfer. For co-owners, the focus is on job creation / retention and/or skills transfer.
- For High-Wage Owner-operator applications, Transition Plans apply.
- For Low-Wage, the caps apply.
- Confirmations can be for one year or less.
The wiki goes on to address whether start-up companies can do owner-operator LMIAs, including where the company does not exist.
While the amount of redactions are frustrating, regardless of what the ESDC website and the Temporary Foreign Worker Program Manual / wiki states, the reality is that this is a very rarely used exemption. The website, and especially the Temporary Foreign Worker Program Manual (which is internal and so of course cannot give rise to a legitimate expectation) are merely guides in the application of this highly discretionary process. While it is highly discretionary, I have always found that ESDC officers exercise this discretion fairly.
On August 29, 2016 the ESDC wiki was updated with the following questions and answers:
Is there a minimum percentage of shares that a TFW must own to be considered an owner operator?
Ownership of shares does not guarantee that a foreign national qualifies as an owner-operator. The term owner-operator generally refers to business owners and does not refer to individuals who receive shares
as part of a compensation package.
- To qualify as an owner-operator, the foreign national must be able to:
- demonstrate a level of controlling interest in the business (e.g. be a sole proprietor or a majority share holder;
- demonstrate that such temporary entry will result in the creation or retention of employment opportunities for Canadians and permanent residents and/or skills transfer to Canadians and permanent residents; and
- must not able to be dismissed.
Who should be signing the application? A lot of the applications under the owner-operator category are signed by an individual who has no direct influence in managing the business operations.
The foreign national must sign the application as the owner-operator.
How should an Officer proceed when the purchase of a business is conditional to the issuance of a work permit?
A determination of whether an offer of employment is genuine shall be based on the following factors:
(a) whether the offer is made by an employer that is actively engaged in the business in respect of which the offer is made, unless the offer is made for employment as a live-in caregiver;
This factor must be assessed by reviewing the foreign national’ s intention to operate the business in Canada (i.e. purchasing a valid operating business or has experience in starting this type of business
This must be demonstrated by one or several documents provided by the owner operator or employer, and may vary on a case by case basis.
Examples of documentation include:
- a letter of intent between the owner-operator and the current owner for the transfer of the business;
- demonstration of the owner-operator’s financial investment in the business;
- a copy of the owner operator’s share certificate;
- a copy of a lease agreement between the owner-operator and a landlord for the intended work location;
- a copy of meeting minutes indicating the transfer of ownership to the owner operator; or
- any other document that, at the Officer’s discretion, is deemed as demonstrating this factor.