Canada: The New Canadian Intra-Company Transfer Rules – The Current State Of Affairs

Last Updated: February 6 2015
Article by Benjamin A. Kranc

In June 2014, Citizenship and Immigration Canada (CIC) released Operations Bulletin 575, containing new guidelines with regard to Intra-Company Transfers for personnel with specialized knowledge (ICT-SK). These pronouncements had tremendous impact on the Canadian immigration system, particularly since Intra-Company Transfer provisions are among the most widely-used means by which foreign workers are granted work permits. Some of these guidelines altered well-established concepts upon which employers had relied for many years. (There was no modification to the other branch of the Intra-Company Transfer allowance – the allowance for those with senior managerial or executive level positions.)

Among the new requirements were:

  1. ICT-SKs would now need to meet the median wage requirements for their occupation (based on the National Occupational Classification).

    [The new guidelines relieve officers of this consideration with regard to Free Trade Agreement (FTA) based Intra-Company Transfers (notably NAFTA), but indicates that the issue is still a factor to be considered, even under FTAs.]

    • Previously, there was no such requirement.
  2. ICT-SKs would have to have 'advanced expertise' with the company PLUS 'proprietary knowledge'.

    • Previously, the test was 'advanced experience' OR 'proprietary knowledge'.
  3. The terms 'advanced expertise' and 'proprietary knowledge' were in turn further narrowed.

    'Advanced expertise' was to be 'recent and significant' [and presumably more than just the technical one year minimum].

    • Previously, this requirement was not stipulated.

      The considerations for 'proprietary knowledge' was narrowed, requiring, for instance, that the knowledge be unusual within the host company, and that it be critical to the company.
    • Previously, the term allowed for broader interpretation.
  4. ICT-SKs were to be "clearly employed by, and under the direct and continuous supervision of, the host company".

    • Previously, there was no such requirement, though certain visa posts were starting to unilaterally implement this concept.

Now, with the passing of time, we have seen how some of these guidelines are being implemented in practicality. Certainly, the process is still relatively new, and will continue to evolve (particularly in the current, stricter, Canadian immigration environment), but as of this time, there are a few things we have learned that allow us to navigate the system effectively.

  1. Re: New median wage requirements

    1. We have seen increased scrutiny with regard to this provision. Not only are median wage requirements being expected, but indeed, often higher than median wage, depending on the applicant's seniority. That is, it may be true that the median wage for Occupation X is $Y/hour, but Ms. Smith, the applicant, has 10 years' experience, so presumably she should make much more than just the median wage.
    2. Further, this has been true for both FTA and non-FTA applicants.
  2. Re: New 'advanced expertise' PLUS 'proprietary knowledge' requirement

    1. This is of course a much more difficult standard, but officers are indeed insisting on both elements. It is therefore crucial to provide evidence and/or stipulate in supporting documentation how both aspects of the test are met. Failure to substantiate one factor or the other will likely result in refusal.
  3. Re: Changes to the terms 'advanced expertise' and 'proprietary knowledge'

    1. With regard to the redefinition of the terms themselves:

      1. Firstly, the guidelines say that the greater the time with the company (within the last 5 years), the greater the presumed advanced level. This is creating in the minds of many officers a de facto reality that advanced experience is indeed 2 years or more. This also seems to contradict the very principle of a 1 year requirement already built in to the law for the purpose of establishing sufficient experience. Non-the-less, people with a mere' 1 year of experience may find it more difficult to get consideration.
      2. Secondly, what is 'proprietary knowledge'? Interestingly, CIC has distinguished between proprietary knowledge and advanced proprietary knowledge. In practicality, however, it would seem to all boil down to proprietary or not.

        1. That being said, it should be noted that CIC is accepting arguments of proprietary knowledge that are based on information that is not necessarily patented or otherwise protected. Proprietary is being considered to include internal processes that are not known outside the company. Certainly, the closer to patented, the better, but the lack of a patent does not necessarily stop the viability of the application.
  4. Re: Employees to be "clearly employed by, and under the direct and continuous supervision of, the host company".

    1. This can sometimes be a very difficult standard. For instance, what is 'employed by'? Does this mean that such Intra-Company Transferees needed to be on Canadian payroll? This was indeed the initial understanding of the provision by many in the field. However, it now appears to be accepted that the test being implemented is more about being supervised by, and carrying out activity on behalf of, the Canadian entity. Transfer to Canadian payroll may be more indicative of this, but officers are not insisting on it. Documentation that may assist in this regard can include corporate charts, a job description which clearly evidences that this matter is supervised by and/or carried out on behalf of the company, etc.

Yet again, the rules are still new and still evolving. But with the passage of time, we are learning to adapt, and have seen the rules take on some of the interpretations above. Certainly, those seeking to utilize the Intra-Company Transfer provisions afforded by Canadian law must continue to be very cautious in their considerations under the new guidelines, to avoid frustration or complications.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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