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Doing Business in Canada | Guide | Resource

Immigration Law in Canada

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Doing Business in Canada 2019

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US companies conducting business in Canada will often send some of their American employees to perform various duties in Canada.

As a general rule, non-Canadians wishing to work in Canada, even on a temporary basis, must obtain a work permit to do so unless they are admissible as business visitors or under another work permit exemption.

Temporary Business Visits

Business visitors engaged in international commercial activities in Canada, whose main source of income is from outside the country and will not enter the Canadian market directly, may benefit from a work permit exemption. However, based on their nationality, such visitors may require a temporary resident visa to be allowed to enter Canada, even for short business visits. It should be noted that US citizens who are travelling to Canada as business visitors do not require a temporary resident visa to enter Canada.

The most common activities allowed under this business visit work permit exemption are the following:

  • Searching for potential clients or making a presentation to prospective customers
  • Negotiating a contract with a Canadian client on behalf of a US company
  • Attending coordination meetings with representatives of a Canadian company related to the US employer (subsidiary, parent or sister company, etc.), where some policies or activities common to both companies are discussed
  • Attending the board of directors meetings of a Canadian company
  • Participating in a business convention
  • Certain other activities are explicitly considered as business activities by Canadian immigration regulations and directives or under the North American Free Trade Agreement (NAFTA). Examples of such activities are:
    • Entering Canada to provide after-sales services
    • Entering Canada to provide training to the employees of a Canadian company or to receive training from a Canadian company, where the US company and the Canadian company have a parent/subsidiary relationship

Other criteria to be considered will include the source of remuneration of the employee, the employer’s principal place of business, and the duration and frequency of the intended business visits. Short visits, however, will not systematically be considered as business visits, the key factors being: (i) the nature of the activity to be performed in Canada; and (ii) on behalf of which company (i.e. a foreign company or a Canadian company) the services will be provided. While numerous cases will be crystal clear, in others, the employee’s eligibility for admission as a business visitor will require a careful analysis and preparation of complete documentary evidence to support the request for a work permit exemption.

Work Permit Applications

When a foreign national performs work in Canada (the word “work” is defined in the federal government’s legislation as “an activity for which wages are paid or commission is earned, or that is in direct competition with the activities of Canadian citizens or permanent residents in the Canadian labour market”) a work permit is required. Work permits are usually specific to a particular employer, for a determined occupation to be held in a specific location and over a fixed period of time.

Labour Market Impact Assessment

Unless the work to be performed in Canada is exempt from this requirement, an employer seeking to bring a worker to Canada must first obtain a favourable Labour Market Impact Assessment (LMIA) opinion from Employment and Social Development Canada (ESDC), the federal government department responsible for workforce-related issues. The LMIA opinion confirms the genuineness of the job offer and the likelihood of its neutral or positive economic effect on the labour market in Canada. It is also issued only if the employer has provided all foreign employees the wages and terms of employment that were substantially the same as those set out in the original offer.

The opinion will be based on the following criteria:

  • The job creation or job retention for Canadians expected from the foreign worker’s contribution
  • The transfer of skills and knowledge for the benefit of Canadians
  • The labour shortage the work may likely address
  • The wages and working conditions offered, in compliance with Canadian standards
  • The efforts made to hire or train Canadians for the position
  • Any labour dispute in progress in the company at the time
  • Fulfillment of any commitments previously made by the employer

Particular attention needs to be provided to the recruitment efforts. Save certain exceptions, a positive LMIA is only issued once the employer has proved it has advertised the position by strictly following the guidelines issued by ESDC. “Reasonable efforts” do not suffice.

Once ESDC has issued a positive LMIA opinion, the prospective employee may then submit his/her application for a work permit to a Canadian Visa Office outside Canada for processing. When the applicant is a citizen of a visa-exempt country such as the US, the application may also be processed at the port of entry upon arrival in Canada. Note that when the employment is to be located in Québec, the province’s consent will also be required. In this case, the LMIA will be issued jointly by ESDC and the Québec Immigration Department and a Québec Acceptance Certificate must be obtained.

Since the amendments made to the program in June 2014, obtaining an LMIA has become much more difficult. An LMIA is now considered a last-resort measure.

Labour Market Impact Assessment Exemptions

LMIAs are not required in every case. Several exemptions are available through Canadian immigration regulations and under provisions of international agreements, such as the North American Free Trade Agreement (NAFTA), of which Canada is a signatory. In most cases, these applications are the most expeditious and preferred options.

NAFTA Provisions for Foreign Workers

Entry under NAFTA is limited to citizens of the United States and Mexico, who may take advantage of the special LMIA exemptions designed for professionals, intra-company transferees, traders and investors.

The criteria for entry, the required documentation, and the length of the permitted stay will vary from category to category and also depend on the proposed activity of the applicant in Canada. For instance, NAFTA intra-company transferees who fill a senior managerial position will be issued successive work permits up to a maximum period of 7 years whereas intra-company transferees who possess specialized knowledge cannot obtain an extension of their work permits under that category after a total of 5 years in Canada. The rules on what constitutes specialized knowledge were made much stricter in 2014. Transferees who previously obtained work permits almost automatically are now finding it increasingly difficult to prove their specialized knowledge to immigration officers.

Other LMIA Exemptions

Several other LMIA-exempt categories are provided based on Canadian interests. These are intended to facilitate entry to Canada by foreign workers whose employment will have significant economic, cultural or social benefits for citizens or permanent residents of Canada, or will create reciprocal employment for Canadians in other countries. As an example, spouses of temporary skilled workers or spouses of students (including common-law and same-sex spouses) will be eligible for an “open” work permit, authorizing them to work for any employer in Canada.

Documentary requirements for these applicants will vary by category and from office to office, as well as on the details of the applicant’s situation.

Permanent Residence

A temporary resident in Canada may at one point wish to obtain permanent residence status to be authorized to settle in Canada on a long-term/permanent basis. Since January 2015, a new system called Express Entry has been implemented in Canada to better manage the flow of skilled applicants for permanent residence based on their ability to successfully settle and participate in the country’s economy. It applies to applicants intending to settle in any province, except Québec. Québec has its own selection rules. In addition, various provincial programs are available for business people (such as the self-employed, entrepreneurs or investors) as well as skilled workers.