Today IRCC announced major changes to Intra Company Work Permits (ICTs) that vastly restrict the types of foreign companies that can send Executives, Managers, or Specialized Knowledge workers to Canada on ICTs. These changes only apply to R205 work permits, not R204 applications from countries that have Free Trade Agreements with Canada (such as Chile or the United States). Companies domiciled in India, for example, are affected by these changes.

The most immediate change is that to qualify for an ICT, foreign companies must already have a second subsidiary company in another country. This means that smaller businesses only operating in their home country and hoping to open a Canadian branch or subsidiary office can no longer expand into Canada under the ICT regime unless they already have operations in another country. This is the new Multinational Corporation (MNC) Requirement. I note that both companies have to be active and earning revenues. They cannot be shell companies or companies with little to no revenue or staff.

The above change knocks out a large number of corporate applicants who only have one company in their home country. This change was, without a doubt, introduced to stem the high volume of ICT applications from small organizations, which were effectively using the New Office ICT rules to catapult themselves into Canada with almost no barriers. Clearly, IRCC felt that New Office ICTs were being abused and has now tightened the qualifying criteria by introducing the MNC concept.

Companies that meet the MNC rule can still open a new office in Canada, but under stringent criteria that includes formal HR and business plans showing specific timelines of when revenue and office growth will begin, capitalization requirements, prevailing wage requirements, commercial office space lease requirements, and other restrictions set out below in the highlight section of this blog. The concept of remote work has been explicitly invalidated for foreign nationals hoping to work in Canada under an ICT permit.

In the past, companies would obtain ICT work permits to send employees to the office of clients in Canada. This is common for software engineers. Under the new rules, all ICT employees can still work at a client site but their work permit will be limited to a maximum one-year in duration.

In addition, the definition and evidence analysis of what constitutes Specialized Knowledge has been tightened to require both advanced knowledge and proprietary knowledge. A minimum of 2 years of work at the current foreign company is also now required to establish Specialized Knowledge.

The net result of these changes is that ICT applications will require much more thorough documentation to prove each prong of the legal test.

As mentioned, today’s announcement only impact ICTs under R205, which covers countries that do not have an existing Free Trade Agreement with Canada.

Countries with a Free Trade Agreement that have ICT provisions still operate under the old rules and will be adjudicated under R204. A list of Free Trade Agreements that include ICT provisions can be found here: https://www.canada.ca/en/immigration-refugees-citizenship/corporate/publications-manuals/operational-bulletins-manuals/temporary-residents/foreign-workers/exemption-codes.html#r204

Key Highlights of the Updates

1. Clarified Eligibility Criteria

a. Multinational Corporation (MNC) Requirement

  • Definition of an MNC: An MNC must have business operations in at least two countries. This means the enterprise outside Canada must already be part of an existing MNC before seeking to establish operations in Canada.
  • Qualifying Relationship: The Canadian enterprise must have a qualifying relationship with the foreign enterprise, such as a parent, subsidiary, branch, or affiliate.

b. Employment Requirements

  • Current Employment: Applicants must be currently employed by the foreign enterprise in an executive, managerial, or specialized knowledge capacity.
  • Duration of Employment: They must have been continuously employed full-time in a similar position for at least one year within the three years preceding the initial application.
  • For Specialized Knowledge workers, IRCC guidance states that current employment at the foreign company of less than 2 years will make it very difficult to prove specialized knowledge.

c. Transfer to Canadian Enterprise

  • Active Engagement: Both the Canadian and foreign enterprises must be actively engaged in doing business. This means they are regularly, systematically, and continuously providing goods or services.
  • Position Availability: The applicant’s position in the foreign enterprise must remain available upon the completion of their assignment in Canada.

2. Enhanced Definitions and Assessments

a. Specialized Knowledge

  • Dual Criteria: Specialized knowledge now explicitly requires both advanced proprietary knowledge and an advanced level of expertise.
  • Proprietary Knowledge: This refers to company-specific expertise not commonly found in the industry and not easily transferable or widely held.
  • Assessment Factors: Officers will consider the applicant’s occupation, education, training, and experience to determine if they truly possess specialized knowledge.
  • Current employment at the foreign company of less than 2 years will make it very difficult to establish specialized knowledge.

b. TEER Categories

  • High TEER Categories Preferred: Applicants in higher Training, Education, Experience, and Responsibilities (TEER) categories (TEER 0, 1, 2) are more likely to meet the specialized knowledge requirement.
  • Lower TEER Categories Scrutinized: Applications in lower TEER categories (TEER 3, 4, 5) will undergo thorough reviews to confirm the necessity and possession of specialized knowledge.

3. Location and Nature of Employment

  • Physical Presence: ICTs must work at the physical commercial premises where business operations are conducted in Canada.
  • Ineligible Business Types: Businesses operating from non-commercial or residential locations, virtual offices, or shared spaces are not eligible for ICT transfers.
  • Employer-Employee Relationship: There must be a clear employer-employee relationship with the Canadian enterprise, with the Canadian enterprise controlling the day-to-day activities.

4. Establishing a New Qualifying Enterprise (C61)

For foreign nationals entering Canada to establish a new qualifying enterprise on behalf of their current employer, there are additional requirements:

  • Business Plan: Applicants must provide a comprehensive business plan outlining the enterprise’s goals, operational strategies, market analyses, and financial projections. This demonstrates the feasibility and viability of the new Canadian operation.
  • Human Resource (HR) Plan: A reasonable HR plan must be provided to show how the enterprise intends to maintain or hire staff for the new operation. This plan should illustrate that the Canadian enterprise will be large enough to support an executive, managerial, or specialized knowledge function throughout the duration of the foreign national’s work permit.
  • Financial Ability: Evidence of the foreign enterprise’s capacity to cover the costs of establishing and operating the new enterprise in Canada is required.
  • Securing Physical Premises: Applicants must be entering Canada to secure physical commercial premises for the new enterprise. Initially, the enterprise may use its legal counsel’s address until a premise in Canada can be purchased or leased.

Extensions Under C61

  • Duration: Maximum of one year.
  • Extensions: Generally not granted unless extenuating circumstances exist, such as delays beyond the applicant’s control. In such cases, evidence must be provided to justify the need for an extension.

5. Changing ICT Categories

  • Flexibility to Switch: Foreign nationals can apply for a new work permit in a different ICT category if they meet the eligibility criteria for the new category.
  • Requirement of Experience: They must demonstrate one year of experience in the new capacity within the three years preceding the application.

6. Defined Maximum Durations for Other Categories

a. Executives and Managers (C62)

  • Initial Permit: Maximum of three years.
  • Renewals: Two-year renewals are allowable, up to a total of seven years.

b. Specialized Knowledge Workers (C63)

  • Initial Permit: Maximum of three years.
  • Renewals: Two-year renewals are allowable, up to a total of five years.

Note: Total duration limits apply cumulatively across all ICT categories, including those under international free trade agreements.


Additional Considerations

Assessing the Genuineness of the Offer

Officers will closely scrutinize the job offer to ensure it is genuine and that the applicant meets all requirements. Employers must provide detailed information in the offer of employment, including:

  • Job Description: Clear outline of duties, responsibilities, and the unique skills required.
  • Relationship Between Enterprises: Explanation of the qualifying relationship between the foreign and Canadian enterprises.
  • Applicant’s Qualifications: Evidence of the applicant’s specialized knowledge, experience, and ability to perform the job.
  • Business and HR Plans: For those establishing a new enterprise, comprehensive business and HR plans are essential to demonstrate the enterprise’s viability and staffing strategies.

Prevailing Wage Requirement

  • Consistency with Canadian Standards: Wages offered must be consistent with the prevailing wage for the occupation and region in Canada.
  • Exclusions: Non-monetary benefits or allowances are not included in the wage calculation.

Employer Compliance

  • Use of Employer Portal: Employers must submit the offer of employment through the IRCC’s Employer Portal.
  • Compliance Fee: Payment of the employer compliance fee is mandatory.
  • Adherence to Conditions: Employers must ensure that the foreign national performs work consistent with the job offer to avoid non-compliance issues.

Recaptured Time

  • Time Not Worked: Periods where the ICT did not work (e.g., parental leave) can be recaptured, allowing them to utilize the full duration of allowable work in Canada.
  • Documentation Required: Applicants must provide evidence of the time not worked to recapture this time.

Implications for Applicants and Employers

For Applicants:

  • Prepare Comprehensive Documentation: Ensure all required documents clearly demonstrate eligibility, including proof of employment, specialized knowledge, the relationship between enterprises, and detailed business and HR plans if establishing a new enterprise.
  • Understand the Definitions: Be clear about what constitutes specialized knowledge, an executive role, or a managerial position under Canadian regulations.

For Employers:

  • Detailed Job Offers: Craft offers of employment that provide comprehensive details about the position, requirements, and how the applicant meets these needs.
  • Provide Essential Plans: When establishing a new enterprise, develop thorough business and HR plans to demonstrate the enterprise’s feasibility and staffing strategies.
  • Compliance is Key: Adhere strictly to all regulatory requirements to avoid penalties or refusal of applications.
  • Plan Ahead: Be mindful of the maximum duration limits and plan transfers accordingly to ensure business needs are met without interruption.

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