AN ALTERNATE LOOK AT THE NEW RULES CONCERNING OWNER-OPERATOR WORK PERMIT - WITH / WITHOUT AN LMIA
April 19, 2021
Written By: Afshin Yazdani (LL.B, LL.M, OBA) – Barrister, Solicitor and Founder of YLG – Yazdani Law Group
In April this year, the IRCC (Immigration, Refugees and Citizenship Canada), announced its move to abolish the special Temporary Foreign Worker Program (TFWP) for the Owner-Operator category, which allows foreign businessmen/women to gain entry to the country through a work permit by either establishing or purchasing a current business in Canada.
Essentially there were two gateways to obtaining such work permits namely, through the standard procedure of the TFWP, with the exception of an LMIA (Labour Market Impact Assessment) or through the International Mobility Program.
As part of the new rule, which took effect on April 1, the eligibility criterion for an Owner-Operator work permit, will now be assessed on the same basis as other TFWP applicants, subjecting a candidate in this category to undergo an LMIA – where an employer has to take every effort to hire a local Canadian citizen or permanent resident prior to filing for an LMIA request from the IRCC. This includes advertising the position on at least three various recruitment platforms and online resources such as the Government of Canada’s Job Bank, to provide proof that every recruiting effort taken was extensive and covered many potential applicants from Canada, before granting a work permit to an international applicant.
Since then, the new rule has been looked upon negatively by many immigrant practitioners, citing that the process will now be that much more arduous in order to obtain an Owner-Operator work permit under the TFWP stream.
However, as an accomplished immigrant lawyer, with over 10 years of international experience, it is in my expert opinion that there are various, positive approaches and alternatives to view these new rules, which I intend to elaborate on, in this article.
As stated above there are two main streams for an Owner-Operator work permit to be granted namely, through the TFWP or under the International Mobility Program. When comparing these two streams, even before the new rules took effect, the International Mobility Program – Exemption Code C11 was always the faster and a much easier process, mainly because this method did not require a positive LMIA to obtain an Owner-Operator work permit.
It is important to understand that the new changes applies only to Owner-Operator TFWP – LMIA applications stream, and not under the International Mobility Program or LMIA Exemption Code 11.
Ultimately, the core purpose of the Owner-Operator work permit is to simplify the procedure and to attract more business people to the country and make the transition process smooth, easy and quick, and not more difficult as most regard it to be. If for example, a business owner of high net worth, had to undergo a laborious process of obtaining a work permit, they would most likely be dissuaded from investing and in all likelihood look into other countries for investment opportunities. These streams have been specifically designed to avoid that.
The LMIA exemptions work permits are listed in sections 204 to 208 of the Immigration and Refugee Protection Regulations (IRPR), categorized within six sub-categories: (a) R204- International Agreements; (b) R205- Canadian Interests; (c) R206 – No Other Means of Support; (d) R207- Permanent Residence Applicants in Canada; and (e) R207.1 – Vulnerable Workers; (f) R208 – Humanitarian Reasons.
The C11 category falls under section R205(a), titled “Canadian Interest”, which states “A work permit may be issued under section 200 to a foreign national who intends to perform work that: a) would create or maintain significant social, cultural or economic benefits or opportunities for Canadian citizens or permanent residents.”
Deeper analysis into this section R205 shows a further five sub-categories, namely Significant Benefit; Reciprocal Employment; Research; Competitiveness and Public Policy; and Charitable or Religious Work.
Section R205(a) allows self employees and entrepreneurs to apply for a Canadian work permit without having a positive LMIA. The LMIA exemption for Owner-Operator work permit codified under code C11, specifically states that this stream is applicable for “entrepreneurs or self-employed individuals”.
To qualify for an Owner-Operator work permit under C11, a foreign national candidate must demonstrate the following:
- own at least 50% of a Canadian business or holds a minimum of 50.1% of the shares of the business;
- operating the business in Canada will generate significant economic, social or cultural benefits for Canada, or will provide opportunities for Canadians or permanent residents, such as employment or a unique service;
- has a viable business plan that will benefit Canada and the Canadian population;
- is the best candidate for the job, and has a skill set or experience that will improve the feasibility of the business;
- created a comprehensive business plan, identifying all aspects prior to entering Canada such as financing, leasing office space, and business number, contacting parallel businesses, signing agreements with Canadian suppliers, etc.;
- has filed an Offer of Employer (Employer Compliance) application with the IRCC through the Employer Portal and received an Employment Number.
With this stream, emphasis is placed on foreign nationals owning at least 50.1% shares of a Canadian business. In the case, where an individual owns less than 50% of a Canadian business, the LMIA stream would be a more viable option.
To initiate the process the respective candidate must simply received an employment number from the Employer Portal, which usually takes few minutes to process.
To conclude, notwithstanding the new policy making the process of applying for an Owner-Operator work permit applications “under the LMIA route” more laborious and difficult, I believe the International Mobility stream option is a far better approach with a more simplified procedure.