Comprehensive Guide on Canada’s New Intra-Company Transfer Work Requirements.

Canada’s Intra-Company Transfer (ICT) work permit program has been essential for global companies to transfer key employees to Canada. It has facilitated the growth of foreign businesses within Canada by allowing executives, managers, and specialized knowledge workers to transfer seamlessly. However, recent changes announced by Immigration, Refugees and Citizenship Canada (IRCC) on October 3, 2024, have introduced a new layer of complexity, creating challenges for businesses and applicants alike. This article delves into these changes, outlines their impact, and provides practical suggestions for navigating the updated ICT requirements.

Key Changes to ICT Work Permit Requirements

1. Requirement for a Multinational Status

For the first time, the updated ICT guidelines require companies to qualify as “multinational” entities. This was not the case before the changes. To qualify for the ICT program, a business must already be a multinational corporation (MNC). This means the business must have active, money-making operations in at least two countries before setting up an operation in Canada. A business cannot use the ICT program to become an MNC by opening its first international office in Canada. If a business wants to start a new Canadian branch, it must show that it already operates in two countries before using the ICT program to bring workers to Canada.

This requirement restricts smaller businesses that have yet to expand internationally, thereby limiting the ICT program as an entry point for new market ventures. Meeting this criterion may be straightforward for larger global corporations; however, this restriction adds a significant hurdle for startups, potentially forcing them to use other pathways, such as the C11 Entrepreneur Work Permit, C10 or the Labour Market Impact Assessment (LMIA).

2. Physical Presence and Commercial Premises Requirement

In the context of a post-pandemic, remote-working world, IRCC has clarified the need for transferees to demonstrate why their physical presence in Canada is essential to their role. This update challenges companies to justify a Canada-based position, particularly for roles that could be performed remotely.

Furthermore, the Canadian entity must maintain commercial, physical premises in Canada. This requirement is particularly relevant to startups or smaller foreign entities setting up new operations in Canada. IRCC’s rationale here is to ensure that the Canadian branch functions as an actual, active business site rather than a mere satellite presence that could be handled remotely.

3. Prevailing Wage Requirement for Managerial ICT Positions

Alongside the wage requirements for specialized knowledge roles, IRCC now mandates that managerial ICT positions meet a prevailing wage standard. This policy aims to align the salaries of foreign executives with Canadian wage standards, preventing wage suppression in Canada.

Under this requirement, executives relocating to Canada must receive compensation at the median wage for their specific NOC code, typically ranging from $85,000 to $150,000 CAD. This places additional financial demands on companies, particularly small and medium-sized enterprises, as they must allocate significant resources to meet operational costs and competitive executive salaries.

4. Significant Benefit to Canada Requirement

Another fundamental change to the ICT program is the introduction of a “significant benefit” criterion. Under the new ICT guidelines, applicants can no longer assume that their presence in Canada will be viewed as an implied significant benefit. Instead, companies must now provide documented evidence detailing the specific benefits their operations will bring to Canada. 

This added requirement raises the bar for ICT applications, especially for smaller businesses. Companies must provide substantial evidence that their presence and activities in Canada contribute meaningfully to the country. For many businesses, this means outlining how their work will positively impact the Canadian economy or society, which may require extra documentation and strategic planning. This change could also limit companies’ use of ICT permits without a strong, demonstrable benefit to Canada.

5. Updated Requirements for Specialized Knowledge ICTs

The new guidelines have raised the bar for qualifying under the specialized knowledge category for ICTs. While the previous minimum was one year, foreign workers (TFWs) are now generally expected to have at least two years of work experience with their foreign company before being transferred to Canada. The concept of “significant experience” is emphasized, with officers instructed to consider a two-year minimum as a standard, depending on the industry or sector. Only in rare cases will less than two years of experience suffice, and then only if the worker demonstrates a high level of “advanced proprietary knowledge.”

Additionally, applicants in this category must hold a high-skill position, classified under TEER 0, 1, or 2 in Canada’s National Occupation Classification (NOC) system. Those in lower TEER categories (TEER 3, 4, or 5) are subject to greater scrutiny, as they are generally considered unlikely to possess the specialized knowledge required for an ICT work permit. These changes mean that applicants will need to provide more comprehensive proof of their skills, experience, and job level to qualify under the specialized knowledge ICT category.

6. Conditions for ICT Work Permit Extensions

IRCC has clarified specific criteria for renewing ICT work permits for executives and managers already working in Canada. To qualify for an extension, the Canadian business must demonstrate that its size and structure justify the need for an executive or senior managerial role. Executives under TEER 0 must oversee major functions of the organization, set goals and policies, make key discretionary decisions, and report to higher-level executives or the board. Managers under TEER 1 are expected to lead departments, manage key functions or professional staff, and hold authority over personnel decisions.

This update signals that only well-established Canadian companies (in the ICT situation) with a clear need for senior leadership positions qualify for ICT permit extensions, which may limit options for smaller or less structured companies. Additionally, managers and executives who do not oversee professional staff or are involved in direct production or service delivery roles may be excluded from ICT work permit renewal eligibility.

Changes Do Not Apply to FTA Country Nationals

The recent changes to Canada’s ICT program apply only to those applying under the general ICT category. This means the new rules impact nationals from countries that do not have a Free Trade Agreement (FTA) with Canada. However, for nationals of an FTA country—such as Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Panama, Peru, Colombia, Honduras, Korea, Jordan, Israel, the United States, the UK, Ukraine, Iceland, Liechtenstein, Norway, Switzerland or any EU member country—these changes do not affect their eligibility under the ICT program. Nationals from FTA countries can continue to apply under the terms set by their respective agreements, which remain unchanged by these new ICT guidelines.

Implications of the ICT Changes for Startups and Small Businesses

The updates to the ICT guidelines have a disproportionate impact on startups and small businesses. The changes signal a shift toward prioritizing larger, established multinational corporations with the resources and international footprint to comply with IRCC’s stringent requirements.

Early-stage companies that are not yet multinational but view Canada as a strategic expansion point must adjust their plans, explore alternative work permits, or consider scaling their business operations in additional countries before establishing a presence in Canada.

The following are some key challenges startups may face under the new ICT guidelines:

• Increased Financial and Administrative Burden: Small businesses with limited resources may struggle to meet the enhanced documentation requirements and multinational criteria, placing additional financial strain on their operations.
• Limited Access to the Canadian Market: By requiring a pre-existing multinational status, the ICT program no longer serves as a straightforward entry point for companies wishing to test or expand their business models in Canada.
• Increased Likelihood of Application Refusals: Given the heightened scrutiny and documentation standards, startups with less formalized structures may experience higher refusal rates, hindering their ability to leverage the ICT pathway effectively.

ICT Alternative Work Permits for Companies

For companies that no longer meet the revised ICT criteria, several alternative work permit options may provide a viable path to Canadian market entry:

• C11 Entrepreneur Work Permit: The C11 permit is an alternative for foreign entrepreneurs who wish to establish or purchase a business in Canada. It is particularly useful for applicants who may not qualify under the ICT but have a viable business plan and the means to execute it in Canada.
• Labour Market Impact Assessment (LMIA): Companies can apply for an LMIA to hire foreign nationals if they can demonstrate that hiring a non-Canadian is essential and that no qualified Canadians are available for the role. The LMIA is often more time-consuming and documentation-intensive than ICT but can be a reliable alternative for smaller firms.
• Global Talent Stream (GTS): Part of the Global Skills Strategy, the GTS is a fast-tracked work permit option for companies hiring specialized foreign workers in industries like tech, engineering, and finance. The GTS can be suitable for companies with highly specialized roles that meet program-specific requirements.

Recommendations for Navigating the Updated ICT Program

The revised ICT guidelines make it clear that companies need to be well-prepared to meet stringent documentation and eligibility requirements. Here are some best practices to help businesses adapt:

1. Invest in Comprehensive Documentation

Under the new guidelines, assumptions and implied benefits are no longer sufficient. Every claim must be supported by robust documentation. This includes providing detailed evidence of the economic, social, or cultural benefits that the foreign worker’s role will bring to Canada and thorough documentation of the employee’s specialized knowledge, work experience, and the Canadian business’s operations. Each statement and claim should be carefully documented to avoid issues during the assessment process. 

2. Alternative Work Permits or Operational Expansion for Start-ups and Owner-Operated Businesses

Start-ups and owner-operated businesses aiming to expand into Canada should consider alternative work permits or focus on establishing an active, operational business in Canada before applying for an ICT. The ICT program now requires applicants to be part of an established multinational corporation, so companies that are yet to be multinational cannot use ICT to set up new operations in Canada. However, the regulations allow business owners to join their active Canadian businesses if they meet the qualifying relationship with the home company. To qualify as “actively engaged in business,” the Canadian operation must generate sustainable revenue, profits, or other benefits from its activities, such as selling products, providing services, having employees, or maintaining commercial premises.

Conclusion

For companies large and small, understanding the updated ICT requirements and considering alternative pathways will be key to effectively leveraging Canada’s immigration system. With the right strategy, companies can still make the most of the ICT program, contributing to the Canadian economy while growing their global operations.

These updates serve as a reminder that Canada’s immigration landscape is continually evolving. 

Companies seeking to expand into Canada should remain informed of policy changes and work closely with immigration professionals to ensure their strategy aligns with Canada’s regulatory framework and economic priorities.

How Sobirovs Law Firm Can Help

With Canada’s recent changes to the ICT program, businesses face a more complex path to establishing a presence in the Canadian market. Sobirovs Law Firm is uniquely positioned to guide companies through these new realities, providing strategic expertise to navigate the heightened eligibility standards and documentation requirements.

From developing a robust application that demonstrates significant benefits to Canada to exploring alternative pathways such as the C11 Entrepreneur Work Permit or Global Talent Stream, our experienced immigration lawyers ensure that every angle is covered. Our team’s in-depth knowledge of Canada’s immigration policies helps companies of all sizes align their expansion plans with Canada’s regulatory framework, ensuring compliance while maximizing their chances of success. Partner with Sobirovs Law Firm to adapt confidently and strategically to Canada’s evolving business immigration landscape, enabling your business to grow and thrive in this competitive market.

Talk to our senior business immigration lawyer today in a 1-hour Strategy Meeting!