On October 3, 2024, the Canadian government published updated guidelines to the Intra-Company Transferee (ICT) program, aimed at tightening criteria and reducing the number of temporary workers entering Canada.
This statement was prepared by Vishal Awtani, Founder, Gray Jaw Law. CILA also thanks other reviewers of this statement. The views of this statement do not necessarily reflect those of all CILA members.
While the government’s rationale is to prevent misuse of the system and ensure that companies do not exploit the ICT provisions, these updated guidelines raise concerns for their implications and also create ambiguity.
Overview of the Intra-Company Transferee Program
The ICT program historically enabled international companies to set up a presence in Canada and to transfer their highly skilled personnel, such as managers, executives, specialized knowledge personnel to their Canadian branches, subsidiaries, or affiliates. To be eligible, workers must have at least one year of continuous, full-time work experience with the company outside Canada in the past three years, holding a similar position and be presently employed with the entity at the time of the application.
The ICT program, has been a vital tool for Canadian businesses, offering access to global talent without the hurdles of a Labour Market Impact Assessment (LMIA). Companies use this pathway to effectively manage their operations and ensure competitiveness in an increasingly global marketplace. As a result, the ICT program itself has represented a significant economic benefit to Canada by allowing multinational businesses to bring important talent to Canada.
Key Updates to ICT Guidelines
- New Definitions for MNCs: An Multi-National Corporation is now required to operate in at least two countries, including its home country, and must have revenue-generating operations in both. Companies that are establishing their first foreign branch in Canada are no longer eligible to qualify as MNCs under the ICT program. This shift will particularly affect companies operating only in one country or startups looking to expand into Canada.
- While generally all ICT workers must continue to have at least 1 year experience with the foreign entity to qualify, for the specialized knowledge subcategory, those with less than 2 years in a company may be further scrutinized.
- Stricter Guidelines for Executive and Managerial Positions: Applicants must hold their positions at the foreign branch of a multinational corporation (MNC) in the same capacity for at least one continuous year within the past three years. The size and organisational structure of the Canadian operation must justify and demonstrate a reasonable need for an executive or managerial function for transferring a worker in this capacity. These workers must also not be performing duties or functions in the manufacturing of product or delivery of service. An executive need not relocate full-time but should be leading the Canadian enterprise on a day-to-day basis.
- Tightened Wage Requirements: Foreign workers must be paid wages that align with the local standards for their job title and the region in Canada where they will be working. This is a new requirement for Managers and Executives and is also new in the context of Canada’s existing Free Trade Agreements.
- Requirement for Physical Commercial Premises: Companies operating without physical commercial premises in Canada, such as those using virtual or residential addresses, or co-working spaces are no longer eligible for ICT work permits under the new rules.
- Temporary Transfer Requirements: Foreign corporations are required to keep the applicant’s original position in the foreign entity available for the return of the foreign national. The rationale behind this requirement is the temporary nature of the work permit, meaning thereby that the applicant will join their position in the foreign company after the expiry of the work permit, despite the fact that they may be working in Canada as an ICT for five or seven years.
CILA’s Concerns with the Revised Guidelines
CILA believes these new guidelines will impact the significant benefits the ICT work permit category has provided Canada from foreign direct investment and the international mobility of talent. Although we understand the need to bolster program integrity, the intention to prevent individuals from exploiting the ICT program could be addressed through a more refined and objective set of criteria, as well as careful adjudication of applications, rather than applying blanket prohibitions that stifle legitimate business activity.
Impact on Business Growth
Canada’s appeal to international businesses lies in its proximity to the U.S. and the relatively easier immigration processes compared to its southern neighbour. These new ICT restrictions could diminish that advantage, making Canada less attractive for international companies looking to establish or expand operations in North America.
There have been numerous instances where companies with presence in just one country have successfully expanded to Canada and resulted in significant investment and job creation. This change raises practical concerns, as many businesses that previously qualified for ICT permits may no longer meet the definition. For example, a successful application for a Pakistani business expanding to Canada under the old rules may not have been possible under the new regime, as companies will now need to prove multinational status before their first international expansion.
Generally, with the refined definition of what is an MNC will have the impact of disqualifying even many Canadian businesses whether smaller or larger, that have fewer operations globally. One such example is a company that is headquartered in Canada as the main country of operation but may have only one other operation outside Canada.
To prevent the misuse of the rules, IRCC should focus more on tightening the scrutiny of the files, including placing objective financial criteria and evidentiary requirements, rather than changing the rules that may most likely result in hampering the country’s economic growth and innovation.
Unrealistic Burden on Employers
One of the more contentious changes is the requirement for foreign companies to keep a position open in their home country for the transferred employee. This rule is unrealistic for businesses that may transfer employees for up to seven years, and for positions are more project based. Further, in situation where the some country office closes or the business restructures, it’s unclear how this rule would be enforced, leaving many unanswered questions for employers and foreign workers alike.
It also contradicts the dual intent policy, which allows foreign workers to apply for permanent residency while temporarily employed in Canada. For some employers, specially where there is a labour shortage, they may require a foreign national so long as there remains a labour shortage or if there is an extended client project where a specialized knowledge worker is essential for the project success.
Such a scenario raises concerns as to whether an officer may automatically misinterpret the business need as an attempt to have that worker become a de facto permanent resident. The reference to the burden of satisfying officers that a foreign national is “not attempting to become de facto permanent residents” raises questions about whether this may automatically impact those who have legitimate dual intent and may have a permanent residence application in process, while applying for a work permit, and how their application may be adjudicated. Further clarification is required to make the distinction in this scenario.
Unnecessary Burdens on Adjudicators
Previously, the ICT category was presumed to provide significant economic benefits to Canada. Now, with the requirement for employers to prove these benefits on a case-by-case basis, the administrative burden on both employers and government adjudicators has increased without any foreseeable advantage to the labour market. The additional burden of proof and documents that will be required for ICT applications also cause concerns for processing times and ability of IRCC to review these documents to process an application, especially in a time where we are already seeing increasing delays in processing times. CILA questions the need for this additional layer of bureaucracy, which complicates what was once a straightforward and beneficial visa pathway.
Impact on Lower TEER Industry Occupations
The refined specialized knowledge changes creates a higher bar for proving specialized expertise not only for a high skilled worker, but especially those of lower TEER occupations. These workers, many of whom possess valuable knowledge, will now face stricter scrutiny and may be disqualified from the program altogether. The stated assumption that those of lower category (TEER 3,4 and 5) are unlikely to meet the specialized knowledge requirements is a cause of concern generally and especially for companies of certain industry that are by nature of lower TEER, and could also be in essential services. Moreover, it causes concerns for the adjudication of these applications as to whether officers may refuse an application simply on the basis of the TEER level, without a further review.
Moreover, although the new provisions allow for individuals with less than 2 years of company experience to be considered a “specialized knowledge” worker, we would recommend that further examples be provided in the program delivery instructions to demonstrate to officers instances where officers should consider individuals with less than 2 years of experience.
Prevailing Wage and the ICT and Professionals Program
The introduction of prevailing wage requirements to work permits under FTAs like CUSMA is another contentious update. Requiring that wages meet a certain threshold is arguably a form of labour market testing, which is prohibited under these agreements. This could prevent qualified individuals from working in Canada, especially if they are unable to meet the wage thresholds early in their careers.
The new guidance around wages emphasizes preventing wage suppression, but CILA argues that this protectionist stance is at odds with the goals of free trade agreements, which aim to facilitate the movement of workers without imposing such conditions.
In the Professionals context, requiring that a prevailing wage be met (or even considered) contravenes the CUSMA’s (and other similarly worded FTAs) express permission to allow Professionals to provide pre-arranged professional services in the other party’s jurisdiction.
Professionals are generally defined in CUSMA (and several other FTAs) as requiring a bachelor’s degree in a related field (as well as the requirement to be providing pre-arranged professional services in one of the enumerated professions). There is no requirement in the CUSMA that the foreign national receive at least the median (prevailing) wage for the occupation. This is a new added requirement that would prevent an otherwise qualified professional from obtaining a Canadian work permit.
Consider, for example, a U.S. citizen just recently graduated with a bachelor’s degree in accounting from a U.S. university and who accepts a job as a junior accountant in Canada. That person meets the CUSMA definition of a professional accountant who will be providing pre-arranged professional services and should be able to obtain a work permit pursuant to R204(a).
However, on the reasonable assumption that the accountant will be compensated as a first year (junior) accountant, they will not meet the prevailing (median) wage, and the new guidance suggests that this should be seen as wage suppression, with the implication that the work permit application should be refused. This puts Canada at odds with the CUSMA, and furthermore threatens the reciprocal benefits for similarly situated Canadian citizens who are seeking opportunities in the United States (or other free trade countries).
Physical presence criteria
The commercial physical presence requirement also raises concerns for any businesses who are fully remote, and especially in a post-pandemic world. This requirement does not reflect the present state of some companies and their workforces. An example of this would be Shopify, which is a Canadian company that is fully and intentionally remote since employees work on a permanent basis from home. There could be other ways to demonstrate business legitimacy and the need to a foreign worker in Canada.
Temporary not permanent
It is well understood that a work permit is a temporary authorization to work in Canada and that the foreign national must maintain the sufficient ties to demonstrate their ability to depart Canada at the end of their authorized stay (unless they lawfully become Permanent Residents in Canada in the interim). However, the new requirement for an employer to demonstrate that their employee can return to the same or similar position at the end of their work permit places an realistic expectation on the employer and on the adjudicating officer.
It is unrealistic and an undue burden to expect the employer to hold open a position in their foreign operations when at the same time the foreign national is permitted to remain in Canada for up to seven years. Likewise, it is unrealistic and impractical to expect that an adjudicating officer can reasonably determine whether there is credibility in an employer’s statement that a position will remain available for the foreign national when the ICT work permit duration comes to an end in five or seven years.
Furthermore, this new requirement flies in the face of the express permissibility of dual intent as described in A22(a) of IRPA. In fact, IRCC acknowledges that some of the top candidates for PR are those temporary residents who are already economically established and working in Canada. Indeed, Express Entry CRS calculations and the Canadian Experience Class reward foreign nationals for working in Canada. It is counterintuitive, therefore, to emphasize that an intracompany transferee needs to have a foreign role in their home country to return to.
Temporary intent in the context of an ICT work permit holder should be determined by the foreign national’s ability to depart Canada at the end of their period of authorized stay (unless they become a PR), not whether they still have the same or similar job waiting for them in their home country seven years later.
Conclusion: The Way Forward for Canadian Immigration
The recent updates to the ICT program’s guidelines introduce numerous challenges that businesses, immigration lawyers, and foreign workers will need to navigate. CILA believes the government’s approach will ultimately hinder business growth and reduce Canada’s competitiveness in the global economy. Rather than stifling international mobility, CILA advocates for an approach that strikes a balance between preventing abuse, enforcing compliance, and promoting legitimate business activity. By fostering the responsible use of programs like the ICT, Canada can remain a destination of choice for multinational corporations and global talent, driving economic growth and innovation well into the future.
