Immigration and Work Permit Considerations for Foreign Businesses in Canada
When foreign businesses or workers plan to enter Canada, immigration issues must be addressed early on. Choosing the most suitable immigration strategy and entry options is crucial. It’s necessary to determine whether a foreign worker requires a work permit or if they can enter as a business visitor. Canada's immigration laws and programs are designed to facilitate the entry of foreign professionals and business people, including those looking to establish new businesses or subsidiaries in Canada.
Key Immigration Factors
Canada’s Immigration and Refugee Protection Act (IRPA)
The IRPA governs how foreign nationals can enter, work, and stay in Canada. It directly affects business operations, human resources planning, and compliance risks. Companies must understand its implications for:
Hiring foreign workers: Companies may need to secure permits and follow specific regulations when hiring foreign nationals.
Business visitors and service providers: Not all activities require a work permit, but navigating the distinction is important.
Permanent residency pathways: Foreign workers often aim for permanent resident (PR) status, which allows them to work freely in Canada without a work permit.
Potential liabilities: Violating the IRPA can expose companies and individuals to significant legal risks, including fines or bans on hiring foreign nationals.
Work Permit Rules: An Overview
Foreign nationals can’t work in Canada without the appropriate authorization. Most require a work permit, which specifies the employer, job, and work location, and has set validity periods. However, determining if a permit is needed depends on the type of work being done:
Business Visitors: Foreign nationals may qualify as business visitors if their activities don’t compete with the Canadian labor market. These activities might include attending business meetings, negotiating contracts, or exploring opportunities in Canada. Business visitors must:
Have no intent to enter the Canadian labor market.
Receive payment from a source outside Canada.
Generate profits for their employer outside Canada.
Work Permit Holders: If the individual’s activities involve actual employment in Canada (such as earning wages or providing services that compete with Canadians), a work permit is required.
Labour Market Impact Assessments (LMIAs)
In many cases, an employer must first apply for an LMIA to hire a foreign national. The LMIA proves that hiring a foreign worker won’t negatively affect the Canadian labor market. To obtain one, the employer must:
Demonstrate they’ve made efforts to recruit Canadian citizens or permanent residents.
Show that the wage offered meets local standards.
Explain how hiring a foreign worker will benefit Canada, such as through job creation, skills transfer, or addressing shortages in specialized fields.
Global Talent Stream (GTS LMIA): For tech and engineering roles, Canada offers the GTS LMIA, which provides a faster process and focuses on IT specialists, engineers, and other high-demand occupations. Companies using this program must agree to a Labour Market Benefits Plan, outlining commitments to strengthen the Canadian workforce.
LMIA-Exempt Work Permit Categories
Some work permit categories don’t require an LMIA, streamlining the process for certain foreign workers. These include:
Intra-company transferees: For senior managers, executives, or workers with specialized knowledge transferring to a Canadian branch or affiliate. The foreign worker must have been employed with the company for at least 12 months in the last three years.
Trade Agreements: Agreements like the Canada-United States-Mexico Agreement (CUSMA) and Canada-European Union Comprehensive Economic and Trade Agreement (CETA) allow certain professionals, investors, and service providers to obtain work permits without an LMIA.
Francophone Mobility: French-speaking professionals outside Québec can apply under this program, provided they have intermediate French skills.
CUSMA Investor/Trader Categories: For U.S. or Mexican nationals who are heavily invested in a Canadian business or engaging in substantial trade between Canada and their home country.
Entrepreneurs: Eligible entrepreneurs may obtain a temporary work permit to operate a business that generates significant benefits for Canada.
Permanent Resident Status
Many foreign workers aim to transition from temporary work permits to permanent resident (PR) status. Canada’s immigration system offers several pathways for skilled workers, business people, and entrepreneurs to become PRs:
Express Entry: A points-based system that selects skilled workers for PR status based on their education, work experience, language ability, and more.
Provincial Nominee Programs (PNPs): Each province runs its own PNP to attract skilled workers and entrepreneurs who meet local labor market needs. Workers nominated by a province can apply for PR status.
Quebec’s Immigration System: Quebec has its own immigration rules, which include PR programs for skilled workers, entrepreneurs, and investors.
Provincial Nominee Programs (PNPs)
PNPs allow provinces and territories to select foreign workers who meet specific labor or economic needs. PNP categories vary by province but typically include:
Skilled Workers: Programs for foreign professionals who can address labor shortages in specific industries.
Entrepreneurs and Investors: Designed to attract foreign business people who want to start or invest in a business in Canada. Foreign nationals who receive a provincial nomination can apply for PR status and, in many cases, obtain a work permit while their PR application is being processed.
Other Immigration and Entry Considerations
Several other factors should be considered when bringing foreign workers to Canada:
Entry Visas: Some nationalities require a Temporary Resident Visa (TRV) to enter Canada. If a TRV is required, the foreign national must apply for it before traveling.
Electronic Travel Authorization (eTA): Visa-exempt travelers flying to Canada must obtain an eTA before boarding their flight. The eTA is valid for up to five years and is required for most foreign nationals except U.S. citizens and permanent residents.
Biometrics: Most foreign nationals applying for visas, work permits, or PR status must provide biometrics (fingerprints and photos) as part of their application. Biometrics remain valid for 10 years.
Medical Exams: Depending on the individual’s country of residence and the length of stay, a medical exam may be required for entry.
Admissibility Issues: Prior criminal convictions, medical conditions, or previous refusals can make a foreign national inadmissible. Addressing these issues early on can help avoid entry problems.
Practical Considerations for Employers
Beyond selecting the right immigration pathway, employers should also consider:
Application Packages: Well-prepared application packages with comprehensive supporting documents can significantly improve approval chances.
Employment Contracts: Offers of employment should be contingent on the worker obtaining the necessary work permit and maintaining valid status in Canada.
Tax Implications: Both companies and foreign workers may face dual tax-filing obligations or withholding taxes. Companies should seek advice to navigate these challenges.
Health Coverage: Most provinces offer public health coverage to foreign workers and their dependents. Employers should ensure workers have private coverage during any waiting period.
Social Insurance Numbers (SINs): Foreign workers need a SIN to be paid in Canada. A valid work permit is required to obtain a SIN.
Employers must also monitor their compliance with federal and provincial rules to avoid fines or penalties during inspections.