Crucial Updates to Canada’s C11 Application Process

Crucial Updates to Canada’s C11 Application Process

In November 2022, the IRCC published a new policy regarding the C11 Significant Benefit work permit program, in which it has modified and clarified the program.

The IRCC clearly stated that there are 2 categories of C11 work permits:

(a) permanent – for business candidates who have already received a letter of support from any of the Canadian provinces under entrepreneur streams or those who are seeking a work permit under the SUV program to come to Canada to launch their start-up operations;

(b) temporary – all other entrepreneurs & self-employed individuals seeking entry to Canada to do business on a temporary basis. In the video below, we will focus on the 2nd category, i.e. temporary, because most of the entrepreneurs entering Canada would not have a Provincial support letter or a letter from designated organizations under the SUV program.

From the IRCC website:

There are 2 categories of foreign nationals who seek entry to Canada as business owners. Those who only seek entry for a temporary, usually seasonal, purpose to run their existing business (usually self-employed people) and those who seek entry to start or run their business to meet the requirements for provincial nomination or selection as an entrepreneur (including Quebec) or for the federal Start-up Business Class.

The IRCC introduced new rules for the C11 temporary category; some are good, and others are not.

So, What’s New?

1. IRCC clarified that even self-employed individuals could apply for C11

Prior to this rule, it was not clear if self-employed individuals could apply for C11 since job creation for Canadians was one of the most important considerations for C11. Now it is clear that even self-employed individuals (owner-operators) who intend to work in their small businesses as employees may qualify for the program. There is no longer a need to set ambitious goals and turn your business into an enterprise. See the definition of self-employed & entrepreneurs provided in the government’s policy:

  • Self-employed: A person who works for themselves as a business owner and rarely hires people outside their family members. While many are business owners, they typically carry out employee responsibilities.
  • Entrepreneur: A person who organizes and operates a business or businesses, taking on greater than normal financial risks to do so. They hire employees other than their family members to carry out the activities of the business.

Important: Work experience gained as a self-employed person or as an entrepreneur does not qualify for experience in the Canadian Experience Class of Express Entry.

2. Eligibility Rules: temporary nature of intent became the new focus of the C11 application

The IRCC made it clear that for this program, a self-employed person or an entrepreneur must include evidence that the work in Canada is of a temporary or seasonal nature and that they have plans to leave Canada within a specified period of time.

For seasonal businesses or where applicants intend to spend most of their time outside of Canada, there seems to be no problem. For example, if self-employed individuals come to Canada to work during certain seasons (for example, to operate a boat renting business during the spring and summer months) will meet this requirement.

For year-round businesses (such as automotive repair shops, hair-dressing salons, etc.), it would require more evidence that the foreign national only intends to remain in Canada temporarily. Applicants for year-round businesses should now include a transition plan on how they will hire someone to manage their business after the start-up of the business.

  • From IRCC: Foreign nationals should not become de facto permanent residents simply because they are self-employed in their own businesses. If the foreign national has been in Canada for several years and appears to have primarily established their life here, officers should request additional evidence of ties to their home country and plans for departing Canada at some point.
  • Dual intent remains the same: Although applicants may have a dual intent to seek status as temporary workers and, eventually, as permanent residents, they must always satisfy the officer that they will leave Canada at the end of the temporary period authorized under section R185. The applicant must be able to demonstrate that their work in Canada will be of a temporary nature, that they maintain the capacity and willingness to leave Canada, and that they maintain stronger ties to their residence outside of Canada.

A. Documents

The IRCC clarified the list of documents that applicants now must provide in the C11 applications. Before, these documents were suggested as optional, “could include,” but now the IRCC is using the wording of “must provide” that makes these documents mandatory:

  • an indication of the temporary nature of their stay to satisfy an officer that they will leave Canada and are not attempting to become de facto permanent residents.
  • letters of support from related organizations, such as local or regional economic development organizations or chambers of commerce

B. Clarified what is “significant benefit” & how it will be assessed

IRCC has also attempted to guide us on what it considers a “significant benefit” and how officers will determine it. The IRCC added several additional considerations for officers when assessing the C11 applications now, including the following:

Before the changes:

  • Is the work likely to create a viable business that will benefit Canadian or permanent resident workers or provide economic stimulus?
  • Does the applicant have a particular background or skills that will improve the viability of the business?
  • Is there a business plan that clearly shows that the applicant has taken steps to initiate their business?
  • Has the applicant taken some measures to put the business plan in action (showing evidence of having the financial ability to begin the business and pay expenditures, renting space, having a staffing plan, obtaining a business number, showing ownership documents or agreements, etc.)?

New (added to the list)

  • Does the applicant have the language abilities needed to operate the business?
  • Is the business of a temporary nature (for example, seasonal businesses)?
  • Is the foreign national establishing a long-term business that will require their presence indeterminately (for example, an auto mechanic shop)?
  • What are any spin-off benefits from the self-employment of the applicant?

Examples the IRCC is giving re: “significant benefit”

For example, a convenience store located on Yonge Street in Toronto that hires 2 extra people would not make any real difference to any local economy, and 2 extra jobs is not significant.

But if that same convenience store is established in a small rural area where the nearest grocery store is 20 kilometres away, then it may be a benefit as it would hire from a much smaller pool of local people where jobs may be scarce, and it could enhance the economies of other businesses around it by attracting people to the area.

Or, to use a franchise example, is it the only Tim Hortons in the town, attracting people from a much broader area? Or is it 1 of many in a small radius in a city where the coffeeshop would not have a significant impact?

C. No minimum investment amount

The IRCC has clearly stated that the program has no minimum investment amount. The focus is now not on the investment amount or how many employees the business creates – but on the impact that the business will make on the local community and regional economy.

From the IRCC website:

When officers review the significant benefits of the proposed business, it is not necessarily the type of business (sole proprietorship, franchise, corporation, etc.) that makes it a significant benefit or even how much is spent on it. Instead, it is how it provides opportunities for Canadians or permanent residents or a benefit to a local or regional economy.

What has not changed?

  • Ownership rules (50% at least), and
  • Ability to apply for permanent residence

Conclusion

Here are our tips for you based on the recent updates to the C11 program.

Eligibility: This program is perfect for those who:

  • (a) do not plan to spend significant time in Canada but instead, come to Canada temporarily to establish a business;
  • (b) those who intend to establish businesses in remote areas;
  • (c) those who offer unique service or product that is likely to benefit Canadians.

Evidence, evidence, evidence: 

  • Include evidence about your language skills and how you plan to improve your business in Canada;
  • Evidence regarding the impact of your business rather than your investment amount and job creation;
  • Collect letters of support from local and regional organizations;
  • Provide strong evidence about the ties to the home country;
  • Provide evidence regarding the exit plan for your business.