A recent update to Citizenship and Immigration Canada’s (“CIC”) Foreign Worker Manual, the handbook to which CIC and Canada Border Services Agency (“CBSA”) officer refer for guidance when assessing applications for work authorization, has changed the way in which intra-company transferees work permit applications are to be adjudicated.

As previously reported, Canada’s Temporary Foreign Worker Program (“TFWP”) allows for the transfer of senior managers and specialized knowledge workers from a foreign entity to a related affiliate, branch, parent or subsidiary in Canada. This exemption from the requirement to obtain a Labour Market Opinion (“LMO”) provides one of the quickest and most convenient methods for certain categories of foreign workers to obtain work authorization for Canada. In order to qualify under the intra-company category, a business enterprise must be or will be doing business in both Canada and the foreign country. In addition, the applicant must have been employed continuously by the foreign enterprise for at least one year within the three-year period immediately preceding the date of application and must either be: (i) an executive or senior manager transferring to Canada for a temporary period or (ii) possess specialized knowledge of a company’s products or services and its application in international markets or an advanced level of knowledge or expertise in the company’s processes or procedures.

Prior to this clarification, a foreign worker need only have worked for the related entity outside of Canada for a period of one year in the three year period immediately preceding the date of application for the work permit. The impetus for this change was made to prevent inconsistent interpretation by officers at ports of entry and visa offices abroad. Specifically, Section C of Annex 1603 of the North American Free Trade Agreement (“NAFTA”) provides that an intra-company transferee is “a business person employed by an enterprise”. CIC’s interpretation of this provision requires that the applicant be currently employed by the enterprise that intends to transfer the intra-company transferee. CIC’s justification is that if the applicant is not a current employee of the foreign entity, there can be no transfer; rather, it would constitute a direct hire by the Canadian entity. NAFTA further provides that “a Party may require the business person to have been employed continuously by the enterprise for one year within the three-year period immediately preceding the date of the application for admission”. CIC has interpreted this as an additional requirement. In other words, under the new guidance, the applicant must: (i) be “a business person employed by an enterprise” and; (ii) have at least one year of work experience in past three years with the foreign entity that intends to transfer the employee to qualify as an intra-company transferee.

The fact that an employee may accumulate the one year of work experience during the preceding three years, as opposed to one the year immediately preceding the date of application still provides some flexibility in comparison to other countries’ intra-company transferee provisions, but nevertheless poses a serious inconvenience to multinational employers who must rehire the individual prior to transferring them to the Canadian entity.