A year after Immigration, Refugees and Citizenship Canada (IRCC) announced major changes to intracompany transfer (ICT) work permits, employers are still adjusting to stricter rules and higher documentation standards. These changes mean that companies must now provide more detailed evidence when transferring employees to Canada and practices that were previously accepted may now lead to refusals.
What Is an Intracompany Transfer?
This program allows international companies to temporarily move certain employees to a related business in Canada. These employees can be:
- Executives or senior managers
- Workers with specialized knowledge
Unlike most work permits, ICTs do not require a Labour Market Impact Assessment (LMIA), which is usually needed to hire foreign workers.
Some ICTs are supported by trade agreements like The Canada-United States-Mexico Agreement (CUSMA) or Canada-European Union Comprehensive Economic and Trade Agreement (CETA), depending on the employee's nationality and employer. However, the general ICT category, which applies regardless of citizenship, is the most affected by the new rules.
Key Changes
1. Multinational Corporation (MNC) Requirement
The foreign entity must already be a multinational corporation (MNC), defined as a company with business operations in at least one country other than its home country and generating revenue beyond its borders.
The ICT category cannot be used by a business to become an MNC by establishing its first foreign operation in Canada. A new separate, stricter category has been created for companies establishing a new Canadian entity.
2. Specialized Knowledge Scrutiny
There is increased scrutiny on whether the applicant's knowledge is truly proprietary and specialized. Employers must show that the employee's expertise is unique and uncommon in the industry.
IRCC expects a strong case showing the employee has advanced proprietary knowledge and expertise, especially if they have worked less than two years for the foreign company.
3. Temporary Assignment and Position Availability
The applicant's position in the foreign enterprise must remain available for them to return to at the end of their assignment in Canada. Although the specific methods for verifying this new requirement have not yet been detailed, it reinforces the temporary nature of the intracompany transfer (ICT) category.
4. Employer-Employee Relationship
A clear employer-employee relationship with the Canadian entity is required. The Canadian company must direct the day-to-day activities of the transferred worker, preventing "parachuting in" of employees without a real connection to the Canadian business. While being on local payroll is not mandatory, the employment relationship must be well documented.
5. Location of Employment
If the work of the foreign national can be completed remotely, employers must explain why the employee needs to be in Canada, as time zone differences alone are insufficient grounds. Executives do not need to be in Canada full-time but must hold a position and lead the Canadian enterprise daily.
Specialized knowledge workers must be directly employed and supervised by the Canadian enterprise, even if working at a third-party site in which case daily activities must be controlled by the Canadian employer.
Summary
The updates for intracompany transfers reflect both the introduction of new rules and stricter enforcement of existing ones. Employers should carefully review the updated guidelines and prepare thorough documentation to support these work permit applications.
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