Immigration, Refugees and Citizenship Canada issues revised guidance on intra-company transferee work permits

October 15, 2024

On October 3, 2024, Immigration, Refugees and Citizenship Canada (IRCC) issued updated guidance relating to the intra-company transferee (ICT) work permit category. This revised guidance adopts a more restrictive interpretation of the ICT category.

Regulatory authority for the ICT category appears in Subsections 204(a) and 205(a) of the Immigration and Refugee Protection Regulations:

• R204(a) applies where Canada has an international free trade agreement in place, which includes provisions for ICTs. The current guidance for processing ICT work permit applications under Canada's international free trade agreements appears here.
• R205(a) applies to the general ICT category that is available to all foreign nationals, regardless of citizenship. The current guidance for processing work permits under the general ICT category appears here.

Most of the revised guidance focuses on the general ICT category under R205(a). However, some of these recent changes also apply to ICT work permits under R204(a).

Summary of recent changes

Clarification regarding the purpose of the ICT category [R205(a)]

The revised guidance clarifies that the general ICT category is not intended as a means to transfer an enterprise's general workforce to affiliated entries in Canada. This statement alone is not unreasonable since ordinary workers are not supposed to be eligible for ICT work permits; only executives, managers and specialized knowledge workers may qualify as ICTs.

Of course, the revised guidance also states that the ICT category is intended to support the establishment of certain qualifying enterprises and the movement of highly specialized workers, managers and executives to meet specific temporary business needs for a limited time. It further states that an application for an ICT work permit must include supporting documentation that shows an indication of the temporary nature of their stay to satisfy an officer that they will leave Canada and are not attempting to become de facto permanent residents. This clearly suggests that an ICT applicant will have a positive obligation to demonstrate bona fide non-immigrant intent.

Some officers might even be inclined to deny an ICT work permit application solely because the foreign national is also pursuing permanent residence. However, this would contradict the statutory recognition of dual intent, which appears in Subsection 22(2) of the Immigration and Refugee Protection Act.

New definition for "multinational corporation" [R205(a)]

The revised guidance now limits the general ICT category to executives, managers and specialized knowledge workers of a multinational corporation (MNC). According to the revised guidance, an MNC is a company that has business operations in a least one country other than its home country that generates revenue beyond its borders. On its face, this definition appears reasonable, but the related guidance confirms that it will have a significant, negative effect on many foreign companies.

According to the revised guidance, when assessing an ICT work permit application, officers must ensure that the foreign enterprise is that of an existing MNC with revenue-generating operations in at least two countries before establishing an enterprise in Canada. An enterprise outside of Canada cannot become an MNC by using the ICT work permit category to establish its first foreign enterprise in Canada. For example, a foreign national seeking to establish a new enterprise in Canada would not be eligible to seek an ICT work permit if the enterprise outside of Canada only has business operations in the country where it is incorporated.

This revised guidance clearly precludes foreign companies, which are not already carrying on business in at least two foreign countries, from using the ICT category to establish a Canadian presence. This will severely restrict the ability of many foreign companies to set up business operations in Canada.

Requirement that applicants demonstrate that their work will be of significant benefit to Canada [R205(a)]

The revised guidance now specifically states that ICT applications must include supporting documentation that shows how the work of the foreign national will create or maintain significant cultural, social or economic benefit. Although all work permits under R205(a) are theoretically based on significant benefit for Canadian citizens or permanent residents, ICT applicants did not previously need to document this fact.

Under the previous guidance, if an applicant could demonstrate that they satisfied the eligibility criteria for the ICT category, significant benefit to Canada was presumed. Unfortunately, it appears as though ICT applicants now have a positive obligation to demonstrate that their presence in Canada will directly result in significant economic, social, or cultural benefits, or opportunities for Canadian citizens or permanent residents.

Revisions to specialized knowledge guidance [R205(a)]

The revised guidance made several changes regarding how "specialized knowledge" should be assessed. For example, it states that officers should consider the following when determining if a foreign worker holds specialized knowledge:

• Occupation: The revised guidance continues to state that the ICT position in Canada must be in a Training, Education, Experience and Responsibilities (TEER) category, as described in the National Occupational Classification (NOC) occupation, which is similar to the applicant's position abroad. However, the previous language, which suggested that an applicant could satisfy an officer that an exceptional situation existed, has been removed.
• Education: The previous guidance suggested that, in rare cases, an applicant having less than one year of experience with the foreign enterprise might be able to establish that he or she is a specialized knowledge worker. The current language refers to an applicant having less than two years of experience with the foreign enterprise. This suggests that an applicant having less than two years of work experience with the foreign entity abroad will now have a difficult time qualifying as a specialized knowledge worker.
• Mandatory wage floor: The revised guidance continues to state that if a foreign national possesses specialized knowledge, the compensation should be consistent with that of a specialist; it also continues to impose a mandatory wage floor for the proposed Canadian position. However, the revised guidance now states that if a foreign national possesses specialized knowledge, it is expected that such a specialist would be receiving above average compensation in their home country. This suggests that officers may also consider the applicant's compensation abroad when assessing specialized knowledge.

Position with the foreign enterprise must remain available [R205(a)]

The revised guidance now requires foreign nationals to demonstrate that their position within the foreign enterprise remains available to them throughout their period of time in Canada, so that they might return to their position abroad once their employment in Canada is completed. This new requirement can be quite onerous for the foreign enterprise.

Executive and managerial ICTs are permitted to remain in Canada for up to seven years and specialized knowledge workers are permitted to remain in Canada for up to five years. Given this fact, it is unrealistic to expect the foreign enterprise to make the foreign national's prior position available for the entire duration of their transfer to Canada.

Restrictions on applying for a work permit in a different ICT category [R204(a) and R205(a)]

The revised guidance now clarifies that foreign nationals may apply for a new work permit in a different ICT category (for example, specialized knowledge to executive/manager) provided that they are able to demonstrate the following:

• That their current position in the foreign enterprise is equivalent to the new position for which they are applying in Canada; and
• That they have the one year of experience in a similar full-time position with the foreign enterprise, obtained within the three years immediately preceding the new work permit application.

The reference to the three-year period immediately preceding the new work permit application is likely an error since it fails to consider the fact that, when the foreign national is already working for the multinational organization in Canada, they can qualify for an extension of their status based on one year of employment during the three-year period immediately preceding their initial entry as an ICT. If this interpretation were not adopted, it would be impossible for any ICT to extend their status after the initial three-year period.

In any event, the above language clearly indicates that a foreign national who held a managerial position abroad during the three-year period immediately preceding their initial ICT work permit application, entered Canada initially as a managerial ICT and then subsequently applied inland for a new ICT work permit as a specialized knowledge worker, would not be eligible for such a change. This is because their prior position abroad would not be sufficiently similar to the new Canadian position.

The revised guidance also makes clear that the foreign position, which remains available to the foreign national, must continue to be similar to the position that he or she holds in Canada. It specifically states that if the Canadian enterprise promoted the foreign national to manager, but the foreign enterprise continues to hold a specialized knowledge position available for the foreign national, they would not meet the "at-level" employment requirement.

The revised guidance also cautions against foreign nationals performing duties that are at a different level than their stated occupation. It specifically states that a foreign national issued a specialized knowledge worker ICT work permit cannot perform the duties of an executive or manager and that doing so would result in the employer and the foreign national being found in non-compliance.

In summary, the revised guidance severely limits a foreign national's ability to move from a specialized knowledge ICT to an executive/managerial ICT and vice versa.

Location of Employment [R205(a)]

The revised guidance now states the following regarding the applicant's location of employment:

• If the work of the foreign national can be completed remotely, a reasonable explanation of why the foreign national must be in Canada would be required. A time difference between Canada and the foreign national's location would not be a justifiable reason for a transfer.
• Foreign nationals transferring to establish a new qualifying enterprise should provide evidence to corroborate the need for them to relocate to Canada to manage the Canadian business operation, which will operate independently of the foreign company.
• Specialized knowledge workers must be clearly employed by, and under the direct and continuous supervision of the Canadian enterprise. If the Canadian enterprise will be placing the foreign national at a location owned or controlled by a third party, the foreign national's day-to-day activities must be controlled by the Canadian enterprise submitting the offer and not the third-party business.

Commercial physical premises [R205(a)]

The revised guidance now makes clear that ICTs must work at the physical commercial premises where business operations are conducted in Canada. It seems clear that ICTs will not be permitted to work on a remote basis. However, it is not clear how this change will affect ICTs who will be engaged in hybrid work, since they would be expected to work from home at least part of the time.

The revised guidance also states that business operations with no physical commercial premises (i.e., businesses operating from non-commercial/residential locations, co-shared premises, virtual businesses using a mailing address in commercial locations such as malls) are not eligible to transfer ICTs to Canada. However, it still confirms that there may be circumstances (i.e., a foreign national applying for a start-up ICT work permit) where the business location may be held in the legal representative's office until the ICT arrives in Canada to establish the business.

Prevailing wage requirements [R205(a) and R204(a)]

ICT applications under R205(a)

As mentioned above, specialized knowledge workers who seek ICT work permits under R205(a) are subject to a mandatory wage floor; this requirement has been in place since June 9, 2014. The revised guidance continues to impose a mandatory wage floor on such workers. Although it still does not directly impose a mandatory wage floor on executive or managerial workers, the section that describes the officer's review of the Offer of Employment at least suggests that this will occur.

The revised guidance states that, when officers are reviewing the Offer of Employment that the proposed employer has submitted through the Employer Portal, they should do the following:

Officers should confirm that wages are reasonable for the occupation. To prevent wage suppression, wages should not be lower than the prevailing wage for the occupation in the location of work. The prevailing wage for the specific occupation and region of work is found on the Job Bank Compare Wages page.

Additional allowances provided outside of wages are not to be included when assessing if wages meet the prevailing wage. For example, housing or travel allowances.

Note: There is no requirement that the foreign national be paid by the Canadian enterprise or in CAD. However, wages in the offer must be consistent with the Canadian prevailing wage, regardless of currency used. Evidence that the employee is not being paid the prevailing wage may be an indication that they are working at a NOC level below expectation for the ICT.

On its face, this requirement is not limited to the review of specialized knowledge ICT work permit applications. Therefore, it is certainly arguable that it also applies to executive and managerial employees. However, such an interpretation would be inconsistent with other sections of the revised guidance.

The wage guidance described above, in the context of an officer's review of the Offer of Employment, is essentially a restatement of the mandatory wage floor. If officers were truly meant to impose a mandatory wage floor on executive and managerial employees as well, the revised guidance would have specifically stated that the mandatory wage floor applies to all ICT work permits under R205(a). And yet, the revised guidance still discusses the mandatory wage floor only in the context of specialized knowledge ICT cases. Hopefully, IRCC will publish updated guidance soon, to clarify this internal inconsistency.

ICT applications under R204(a)

The previous guidance relating to ICT applications under R204(a) did not include a mandatory wage floor, even for specialized knowledge workers. However, it did state that the proposed wage could be taken into account as a factor in the officer's overall assessment of a specialized knowledge ICT application.

The revised guidance still makes no reference to a mandatory wage floor in the case of ICT applications under R204(a). Even the section that discusses the officer's review of the relevant Offer of Employment makes clear that a mandatory wage assessment is not required for ICT work permits under R204(a). This clearly suggests that officers should not be applying a mandatory wage floor to such cases, even if they are permitted to consider wage (among other factors) when assessing specialized knowledge.

Unfortunately, the revised guidance then includes language that is essentially a restatement of the mandatory wage floor. This clearly represents another internal inconsistency in the revised guidance. Hopefully, IRCC will publish updated guidance soon to clarify this internal inconsistency.

At least the revised guidance for ICT cases under R204(a) is a bit clearer in terms of whether wages are to be considered in executive or managerial cases. It clearly states that wages are relevant as an important indicator of specialized knowledge, not executive or managerial capacity.

Length of stay [R204(a) and R205(a)]

The revised guidance now specifically states that the initial maximum period of admission for an ICT is three years. After that, two-year renewals are permitted. Executives and managers are limited to a total period of seven years and specialized knowledge workers are limited to a total period of five years. These limits apply to ICT applications under both R204(a) and R205(a).

Of course, the above limits are not new. Under the previous guidance, ICT applicants were given an initial period of three years. When applying inland for an extension of stay, they were eligible to extend their stay by two years at a time. In addition, executives and managers were limited to a total stay of seven years and specialized knowledge workers were limited to a total stay of five years.

Nevertheless, visa-exempt foreign nationals who were permitted to apply for their ICT work permits at the time of entry to Canada often received renewals for up to three years. This is likely because such adjudications were considered renewals rather than extensions. It remains to be seen whether Canada Border Services Agency officers will continue to grant three-year renewals to visa-exempt ICTs who apply for their ICT work permits at the time of entry.

Conclusion

The revised guidance imposes significant limitations on the ICT work permit category, in particular ICT work permits under R205(a), which do not arise from international free trade agreements. These recent changes should be a cause of great concern for foreign companies, many of whom rely on the ICT work permit category to transfer key personnel to their new or existing Canadian operations.

For more information on this topic, please contact the author, Henry J. Chang.