July 11, 2014

Announced in late June, the Canadian Temporary Foreign Worker Program (TFWP) has undergone a massive overhaul aimed not only to provide increased job opportunities to Canadian citizens, but also to ensure that Canadian companies who employ foreign nationals remain compliant with the current immigration regulations. Most significant of these changes includes a division of the TFWP, new standards for low- and high-wage positions alike, and new criteria to be met for Intra-Company Transfer applicants within the Specialized Knowledge application stream.

Temporary Foreign Worker Program Re-Organized 

In efforts to further differentiate between various work permit application streams, the Temporary Foreign Worker Program has been re-organized into two distinct programs:

• The Temporary Foreign Worker Program (TFWP) will now only include work permit applications issued through the new Labour Market Impact Assessment (LMIA) process. The TFWP will be run by Employment and Social Development Canada (ESDC)

• The newly-branded International Mobility Program (IMP) will include all other work permit streams that are exempt from the aforementioned LMIA process, and will be run by Citizenship and Immigration Canada (CIC).

Although many of the overall mechanisms within the TFWP and IMP remain the same, several of the changes to each program will significantly impact companies that sponsor foreign workers in either application stream.

What’s Changed? 

Temporary Foreign Worker Program

Most of the changes to the TFWP affect low-skill/low-wage positions; however, employers should take note of all of the following changes to ensure they remain compliant. Unless otherwise noted, these changes are effective immediately.

LMIA Process Replaces LMO Process
The traditional Labour Market Opinion (LMO) process has been rebranded as the Labour Market Impact Assessment (LMIA) process. Although the new application process steps themselves will closely resemble the former LMO process, ESDC has confirmed that the qualifications and assessment standards for the LMIA will be more rigorous and closely monitored by immigration authority.

Employee Skill Level Now Determined by Provincial/Territorial Wage Levels
The main low/high position differentiation will now be based on low-wage vs. high-wage positions (i.e. job positions that earn below and above the Provincial/Territorial Median Wage, respectively), rather than low-skill vs. high-skill National Occupation Classification (NOC) job positions. High-wage positions will include, but are not limited to, managerial, professional, scientific, skilled trades, and technical posts.

Cap Placed on Percentage of Low-Wage Foreign Employees
Previously, the TFWP has not imposed any sort of limitation on the number of foreign employees that a Canadian company could sponsor. However, ESDC has now implemented a transitional plan to cap the low-wage foreign workers at 10% by July 2016:

• Effective immediately – Employers will be capped at a low-wage population of 30% company’s workforce, OR the current population of low-wage foreign nationals (whichever is lower). Note: Temporary Foreign Workers who are employed by companies whose low-wage population currently exceed the 30% cap will be permitted to remain in Canada and work until the end of their current work permit validity.

• As of July 1, 2015 – Low-wage foreign employee population will be capped at 20% of the company’s workforce.

• As of July 1, 2016 – Low-wage foreign employee population will be capped at 10% of the company’s workforce.

Shorter Validity for Low-Wage LMIA Work Permit and Possible Continuation of Final Time Cap
All low-wage LMIA work permits will be issued with a one-year validity with the option for annual LMIA-based renewals; however, it remains unclear whether the four-year overall time cap will remain in place.

• Transition Plans Required for TFWP High-Wage Foreign Employees
Although many of the changes to the TFWP are directed at the low-wage LMIA applicants, sponsoring companies will be required to file transition plans for all high-wage applications. These transition plans must outline the company’s plan to transition the position to a Canadian citizen or permanent resident, to transition the company’s current temporary foreign workers to permanent residence status in Canada, and/or specific plans to train and recruit Canadian citizens.Successfully carrying out these transition plans will be crucial for future positive LMIA rulings from ESDC.

Fast-Track Processing for Certain Favorable Conditions: High-Demand Position, High-Wage, and Short Duration Assignment
Applications fulfilling at least one of the following qualifications are eligible, but not guaranteed to receive, for fast-track LMIA decisions issued within 10 days of filing:

• Skilled Trade;

• Wages within the top 10% of the Canadian workforce; or

• Short-term assignments of 120 days or less (please note, work permit renewals falling into this category will be granted only in exceptional circumstances).

New Job Match Service Introduced for Pairing Canadian Citizens/Permanent Residents with Job Opportunities
ESDC and CIC have rolled out an application portal and job matching service for Canadian citizens and permanent residents to apply for open positions directly through the LMIA Job Bank database. Not only will this grant Canadians with easier access to open positions, but employers will be required to track and report on the number of Canadians who apply for each job, were granted interviews, and why each applicant was not hired as part of the LMIA application process for their foreign employee.

LMIA-Exemption for Recent Foreign Graduates Repealed
In the past, employers were able to bypass the LMIA process for foreign graduates of Canadian post-secondary schools whose Post-Graduate Work Permits (PGWPs) were expiring. However, as of June 5, 2014, ESDC has revoked the LMIA-exemption for this population which will greatly increase the processing times, supporting documentation, and government fees.

International Mobility Program

As mentioned above, the new IMP will include LMIA-exempt work permit applications such as Intra-Company Transfer (ICT) and applications based on Free Trade Agreements. 

Most significant of these changes are the new Intra-Company Transfer (ICT) guidelines recently published by the CIC:

New Definition of “Specialized Knowledge”
The “Specialized Knowledge” requirement has been strengthened to requiring an employee to hold both proprietary knowledge and an advanced level of expertise, both of which must be considered “unique and uncommon” within the industry. In making this amendment, the CIC hopes that this work permit category will be “by definition… held only by a small number or small percentage of employees of a given firm. Specialized Knowledge workers must therefore demonstrate that they are key personnel, not simply highly skilled.While this new definition will not directly affect ICT applicants from NAFTA and other countries with bilateral entry agreements in place with Canada, border officials are expected to view Specialized Knowledge ICT applications more stringently from these populations as well.

ICT Applicants Must Meet Wage Minimums
All ICT applicants must earn at least the Provincial/Territorial prevailing wage for their specific occupation.

Other changes to LMIA-Exempt work permit applications include:

New Compliance Fee Implemented for Non-LMIA Work Permit Applications
In order to fund future increased IMP inspections and an IMP monitoring system without burdening the Canadian taxpayers, employers will be required to pay a CAD $230 Compliance Fee for all LMIA-exempt work permit applications.

Upcoming CIC Audit of IMP
As part of the newly-designed IMP, CIC has announced their plans to conduct an extensive audit of the current LMIA-exempt work permit application steams to ensure their exemption statuses remain advantageous to the current Canadian workforce. Upon completion of the audit, CIC will determine whether any of the work permit categories should be subject to LMIA restrictions and application processes.

New Enforcement Mechanisms and Increased Penalties for Non-Compliance

Finally, both ESDC and CIC have been granted additional powers to monitor, inspect, and enforce the new regulations.

Additional Inspections and Increased Penalties against Employers for Non-Compliance
In order to enforce these new changes, the Canadian Immigration Authorities (both ESDC and CIC) have been given additional authority to ensure compliance from companies sponsoring temporary foreign workers. The most significant of these new powers include:

• Annual inspections of one in four employers who utilize the TFWP. These inspections will be carried out on both a random basis, and on confidential tips of employers who may be illegally hiring foreign employees. Tips can be made via the newly-established hotline and online system.

• Immigration inspectors will now be able to review and confirm all 21 TFWP requirements. These requirements include, but are not limited to wages, working conditions, occupations, job creation, confirmation that Canadian citizens and permanent residents are being hired and trained by the company.

• By Fall 2014, ESDC authorities will have the ability to obtain records from banks and payroll companies for verification of employer non-compliance.

Sponsoring companies found to be non-compliant in their employment of foreign nationals may not only face significantly increased fines, but their ability to access the LMIA system and TFWP in general may be severely limited or revoked entirely. In the most serious instances of non-compliance, HR and/or Global Mobility team members responsible for overseeing the company’s immigration program may face significant personal fines and imprisonment up to 5 years.

Significant Increase in LMIA Government Fees
In order to fund the larger and more complex TFWP and IMP without burdening the Canadian taxpayers, the ESDC has significantly increased the government fees to nearly all work permit applications as follows (all fees listed in CAD):

• LMIA fee has been increased from $275 to $1000; and

• An additional fee of $100 has been added to all open work permit schemes (e.g. working holiday program, spouses and partners of temporary foreign workers, student exchange programs).

ACTION ITEMS FOR EMPLOYERS 

Employers in Canada who currently sponsor foreign employees through any work permit stream, or who will sponsor foreign employees in the future, should take close note of the above-listed changes to the TFWP and the rollout of the new IMP. These extensive changes will affect nearly all aspects of the corporate immigration process into Canada: new requirements for sponsoring companies, new qualifying criteria for foreign employees, new application fees, additional inspections, and more severe penalties for non-compliance.

As with any change, processing times for all classes of work permit applications will most likely be delayed for the upcoming weeks. CIC, ESDC, and Border Officers will continue to receive training on the new regulations, and will require time to streamline their own adjudication systems.

Want to hear more on these changes from a top immigration attorney in Canada? Please listen to the most recent episode our Pro-Link GLOBAL’s new Podcast series here!

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Caveat Lector | Warning to Reader

This is provided as informational only and does not substitute for actual legal advice based on the specific circumstances of a matter. Readers are reminded that Immigration laws are fluid and can change a moment’s notice without any warning. Please reach out to your local Pro-Link GLOBAL specialist should you require any additional clarification. This alert was prepared by Pro-Link GLOBAL’s Knowledge Management team.

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