Citizenship and Immigration Canada (CIC) recently updated its Foreign Worker Manual, which provides guidance to CIC and Canada Border Services Agency officers who adjudicate work permit applications. The updated version includes revisions to sections that describe the C12 (Section 5.31) and North American Free Trade Agreement (NAFTA; appendix G, Sections 4.1 and 4.3) intra-company transferee exemptions from the labour market opinion requirement.

Both the C12 and NAFTA intra-company transferee exemptions apply to executives, managers and specialised knowledge workers who are transferring from one entity to another within the same multinational organisation. The two intra-company transferee exemptions are essentially identical. However, the NAFTA exemption applies to citizens of the United States and Mexico only, while the C12 exemption applies to all nationalities.

The first change is a positive one. It clarifies that a foreign national must have worked outside Canada for a related entity of the Canadian employer for at least one year within the three years preceding the date of the initial work permit application. This was intended to address cases where a foreign national had already been working in Canada for at least three years.

Before the clarification, there was some uncertainty as to whether such a foreign national could seek an extension of his or her intra-company transferee work permit after the first three years, despite the fact that the maximum period of stay is seven years for executives/managers and five years for specialised knowledge workers. If the relevant three-year period preceded the date of foreign national's current application rather than the date of the initial application, it would be impossible for any intra-company transferee to reach the maximum periods of stay allowed under these exemptions. The revision adopts the most logical interpretation.

The second change is illogical and serves no purpose other than to inconvenience Canadian employers. The updated version of the Foreign Worker Manual now states that a foreign national must be currently employed by the multinational organisation that plans to transfer him or her to Canada.

CIC may be taking the position that a foreign national should not be considered an intra-company transferee unless he or she is actually transferring from the related foreign entity (ie, employed by the related entity immediately before the transfer). However, this is an overly mechanical interpretation and violates established principles of NAFTA reciprocity.

Before the revision, a foreign national was required to work outside Canada with the related entity only for at least one year within the three years preceding the work permit application. In other words, a foreign national could have worked for the related foreign entity for one year during the previous three years, but then have worked for an unrelated company during the year immediately before transferring to the Canadian employer. As long as the foreign national had at least one year of employment abroad with the related foreign entity during the three years before the application, he or she could still qualify as an intra-company transferee.

This has also been the longstanding position of the United States Citizenship and Immigration Services and United States Customs and Border Protection when adjudicating intra-company transferee applications (known in the United States as L-1 petitions) filed on behalf of Canadian citizens. It is clear that the revision to the NAFTA intra-company transferee guidelines violates principles of reciprocity, since the US government does not impose such a restriction on Canadians who apply as intra-company transferees in the United States. Although principles of reciprocity do not necessarily apply to the C12 exemption, given that it was modelled on the NAFTA exemption, it seems illogical to impose this requirement on C12 intra-company transferees also.

Until this problem is resolved, multinational organisations can still satisfy the requirement by re-hiring a foreign national abroad immediately before his or her transfer to the Canadian employer. However, this is an added inconvenience for such employers and serves no logical purpose.

For further information on this topic please contact Henry J Chang at Blaney McMurtry LLP by telephone (+1 416 593 1221), fax (+1 416 593 5437) or email (