In addition to the general exemptions from the need to obtain a Human Resources Skills Development Canada ("HRSDC") confirmation, additional exemptions arise from the North American Free Trade Agreement ("NAFTA"). These benefits augment rather than superseded the general provisions contained in the Immigration and Refugee Protection Act ("IRPA") and Immigration and Refugee Protection Regulations ("IRPR"). The nonimmigrant benefits under the NAFTA are organized into four categories: (a) Business Visitors, (b) Intracompany Transferees, (c) Professionals, and (d) Traders & Investors.
NAFTA Business Visitors
Citizens of the United States and Mexico are entitled to seek entry to Canada as business visitors, pursuant to the NAFTA. However, citizens of non-NAFTA countries who are permanently residing or working temporarily in the United States or Mexico are not eligible for benefits under the NAFTA.
NAFTA visitors must be seeking temporary entry to Canada. Temporary entry means that the alien must have no intention of remaining in Canada permanently. This is consistent with the nonimmigrant intent requirement for all visitors to Canada.
The intent of the business visitor provision is to facilitate the entry to Canada of the short-term business visitor who has no intention of entering the Canadian labor market. Therefore, the purpose of the alien's entry must be international in scope. In other words, the alien must be entering Canada on behalf of a business enterprise located in either the United States or Mexico. If he or she simply wishes to work for a Canadian employer, or under contract to a Canadian company, the business visitor category is not appropriate.
The NAFTA describes a business visitor as "...a business person seeking to engage in a business activity set out in Appendix 1603.A.1, without requiring that person to obtain a work permit, provided that the business person otherwise complies with existing immigration measures applicable to temporary entry…". As the NAFTA does not supersede any existing provisions of the Act or Regulations, business visitors entering pursuant to the NAFTA must still comply with all of the general requirements for visitors.
The business visitor exemptions contained in the NAFTA are based on the six stages of the business cycle: Research and Design, Growth, Manufacture and Production, Marketing, Sales, Distribution, and After-Sales Service. There is also a category for general service. The list of business visitor exemptions is reproduced here. However, the most notable exemptions are as follows:
- Technical, scientific and statistical researchers conducting independent research or research for an enterprise located in the territory of another Party.
- Harvester owner supervising a harvesting crew admitted under applicable law.
- Market researchers and analysts conducting independent research or analysis or research or analysis for an enterprise located in the territory of another Party.
- Trade fair and promotional personnel attending a trade convention.
- Sales representatives and agents taking orders or negotiating contracts for goods or services for an enterprise located in the territory of another Party, but not delivering goods or providing services.
- Transportation operators transporting good or passengers to the territory of a Party from the territory of another party or loading and transporting goods or passengers from the territory of a party, with no unloading in that territory, to the territory of another party.
- United States customs brokers performing brokerage duties relating to the export of goods from the territory of Canada to or through the territory of the United States.
- Installers, repair and maintenance personnel, and supervisors, possessing special knowledge essential to the seller's contractual obligation, performing service or training workers to perform services pursuant to a warranty or other service contract incidental to the sale of commercial or industrial equipment or machinery, including computer software, purchased from an enterprise located outside the territory of the Party into which temporary entry is sought, during the life of the warranty or service agreement. Installation includes only setting-up and testing the commercial or industrial equipment or machinery, or computer software. It does not include operating in a productive capacity the equipment or machinery, or computer software. The entry must relate to an obligation to provide the after-sales service in respect of non-Canadian goods, stemming from the original sales agreement. However, "incidental" does not mean that a warranty or service agreement must have the same date as the sales agreement. The life of the initial warranty or service agreement may be extended provided that the sales agreement, or initial warranty or service agreement contained a provision allowing for the extension. "Specialized knowledge", in the context of after-sales service, is considered to be a high degree of knowledge, which can only be imparted to an already-skilled person through extensive training.
- Professionals engaging in a business activity at a professional level in a profession set out in Appendix 1603.D.1 to Annex 1603 of the NAFTA.
- Management and supervisory personnel engaging in a commercial transaction for an enterprise located in the territory of another Party.
- Financial services personnel (insurers, bankers, or investment) engaging in commercial transactions for an enterprise located in the territory of another Party.
- Public relations and advertising personnel consulting with business associates, or attending or participating in conventions.
The nonimmigrant category for NAFTA professionals is granted to United States and Mexican citizens who are seeking admission to Canada to perform pre-arranged services on behalf of a Canadian entity at a professional level. Only professions which appear in Appendix 1603.D.1 to Annex 1603 of the NAFTA are eligible for this status.
An alien seeking admission as a NAFTA professional must satisfy the minimum credential requirements for the proposed occupation. These credential requirements also appear in Appendix 1603.D.1. In addition to satisfying the minimum credential requirements contained in Appendix 1603.D.1, aliens who are granted entry to Canada as professionals must, before commencing their employment, obtain the necessary professional license, certification, accreditation or registration applicable to the practice of their profession in Canada.
Applications for work permits for NAFTA professionals may be adjudicated either at a port of entry or at a consular post anywhere in the world. Work permits for NAFTA professionals are granted for a maximum period of one year at a time. However, while the alien must continue to establish that his or her entry is temporary, there is no limit on the number of extensions that are available under this category.
The NAFTA defines an intracompany transferee as "...a business person employed by an enterprise who seeks to render services to that enterprise or a subsidiary or affiliate thereof, in a capacity that is managerial, executive or involves specialized knowledge, provided that the business person otherwise complies with existing immigration measures applicable to temporary entry." The requirements for this exemption are virtually identical to the general exemption for intracompany transferees in s. 205 of the IRPR, the Canada-Chile Free Trade Agreement, and L-1 categories under U.S. immigration law. Eligibility as an intracompany transferee requires evidence of the following:
- A qualifying relationship must exist between the Canadian company and the company located abroad. The qualifying organization must be actively "doing business" in both Canada and the treaty country. The term "doing business" means the regular, systematic and continuous provision of goods and/or services by a parent, branch, subsidiary or affiliate in Canada, the United States or Mexico, as the case may be, and does not include the mere presence of an agent or office in Canada or the United States or Mexico. The Canadian company must be a parent, subsidiary, or affiliate of the company located abroad. "Parent" is defined as a firm, corporation, or other legal entity that has subsidiaries. "Branch" is defined as an operating division or office of the same organization housed in a different location. "Subsidiary" is defined as a firm, corporation or other legal entity of which a parent owns, directly or indirectly, more than half of the entity and controls the entity; or owns, directly or indirectly, 50% of a 50-50 joint venture and has equal control and veto power over the entity; or owns, directly or indirectly, less than half of the entity, but in fact controls the entity. "Affiliate" is defined as: (a) one of two subsidiaries both of which are owned by the same parent or individual, or (b) one of two legal entities owned and controlled by the same group of individuals, each individual owning and controlling approximately the same share or proportion of each entity.
- The alien must have at least one continuous year of employment with the company located abroad within the three-year period preceding the application for a work permit.
- The prior employment abroad and proposed employment in Canada must be in a managerial, executive, or specialized knowledge capacity. The definition of "executive capacity" requires the executive to primarily direct the management of the organization or a major component or function thereof, establish goals or policies relating thereto; exercise wide latitude in discretionary decision-making; and receive only general supervision from higher level executives, the board of directors or the shareholders of the company. The definition of "managerial capacity" requires the manager to manage the organization, or a department, subdivision, function, or component of the organization; supervise and control the work of other supervisory, professional or managerial employees, or manage an essential function within the organization, or a department or subdivision of the organization; to have the authority to hire and fire or recommend those and other personnel actions (such as promotion and leave authorization); if no other employee is directly supervised, to function at a senior level within the organization hierarchy or with respect to the function managed; and to exercise discretion over the day-to-day operations of the activity or function for which the employee has the authority. "Specialized knowledge" is defined as special knowledge possessed by an individual of the petitioning organization's product, service, research, equipment, techniques, management, or other interests and its application in international markets, or an advanced level of knowledge or expertise in the organization's processes and procedures.
The total period of stay for a person employed in an executive or managerial capacity may not exceed seven years. The total period of stay for a person employed in a specialized knowledge capacity may not exceed five years. These limits are identical to those imposed upon L-1A and L-1B nonimmigrants under U.S. immigration law.
Applications for work permits as an intracompany transferees under the NAFTA may be adjudicated either at a port of entry or at a consular post anywhere in the world. Such work permits may be granted for a maximum initial period of up to three years. However, individuals admitted to Canada to open a new office or to be employed in a new office may only be granted an initial period of up to one year. The foreign national may apply for incremental extensions of two years at a time, up to the maximum stay of seven years in the case of managers or executives or five years in the case of specialized knowledge workers.
Treaty Traders and Investors
According to the NAFTA, a trader/investor is defined as a businessperson seeking to:
- Carry on substantial trade in goods or services principally between the territory of the Party of which the business person is a citizen and the territory of the Party into which entry is sought, or
- Establish, develop, administer or provide advice or key technical services to the operation of an investment to which the business person or the business person's enterprise has committed, or is in the process of committing, a substantial amount of capital,
in a capacity that is supervisory, executive or involves essential skills, provided that the businessperson otherwise complies with existing immigration measures applicable to temporary entry.
This definition actually differs from the E category under U.S. law to the extent that E-1 and E-2 principal traders and investors are not required to show that they will be employed in an executive, supervisory, or essential skills capacity. They simply have to show that they will develop and direct the treaty business as principal investors or traders.
In order to qualify as treaty traders or investors, the treaty business must have United States or Mexican nationality. In order to establish this, at least fifty percent of owners of the treaty business must be citizens of the treaty country under which the alien is seeking status. Joint ventures and partnerships are limited to two parties. The place of incorporation of an enterprise is not relevant to determining nationality.
The term "trade" means the exchange, purchase, or sale of goods and/or services. "Goods" are tangible commodities or merchandise having intrinsic value, excluding money, securities and negotiable instruments. "Services" are economic activities whose outputs are other than tangible goods. Such activities include, but are not limited to, international banking, insurance, transportation, communications and data processing, advertising, accounting, design and engineering, management consulting and tourism.
In order to qualify as a treaty trader, substantial trade must be present. "Substantial trade" is determined by the volume of trade conducted as well as the monetary value of the transactions. Proof of numerous transactions, although each may be small in value, might establish the requisite continuing course of international trade.
The international trade must also be principally between Canada and either the United States or Mexico. This is established by demonstrating that at least fifty percent of treaty business' international trade is between Canada and one of the treaty countries.
Treaty Investors must be seeking temporary entry solely to develop and direct the operations of an enterprise, in which they have invested, or are actively in the process of investing, a substantial amount of capital. To meet the "develop and direct" requirement, the applicant should have controlling interest in the treaty enterprise.
The concept of investment connotes the placing of funds or other capital assets at risk, in the hope of generating a profit or return on the funds risked. Consequently, investor status cannot be granted to non-profit organizations.
The investment funds must be irrevocably committed to the business. Mere intent to invest or prospective investment arrangements without a current commitment of funds will not be sufficient. The alien must also demonstrate prior or present possession and control of the funds or other capital assets.
There is no minimum dollar figure established for meeting the substantiality requirement. Substantiality is normally determined by using a proportionality test in which the amount invested is weighed against one of the following factors:
The objective of investor status is to promote productive investment in Canada. Therefore, an applicant is not entitled to treaty investor status if the investment, even if substantial, will return only enough income to provide a living for the applicant and his or her family. Under U.S. immigration law, this is known as a marginal business, which cannot qualify for treaty investor status.
- The total value of the particular enterprise in question (usually applied in the case of a purchased business); or
- The amount normally considered necessary to establish a viable enterprise of the nature contemplated (usually applied in the case of a new business).
Principal traders or investors may request treaty status for executive, supervisory or essential skills personnel provided that the principal trader or investor has treaty status or would qualify for such status if they were in Canada. The employee must also have the same treaty citizenship as the principal investor or trader.
The supervisory or executive element of the position must be a principal and primary function. A supervisor is a manager whose primary responsibilities involve the directing, controlling and guiding of subordinate employees and who does not routinely engage in hands-on activities. An executive is in a primary position in the organization with significant policy authority.
"Essential skills" are special qualifications that are vital to the effectiveness of the firm's Canadian operations and are over and above the qualifications required of an ordinary skilled worker. There is no requirement that an "essential" employee have any employment history with the treaty enterprise, except where the needed skills can only be obtained by that employment. Canadian law recognizes two types of exceptions to the essential skills standard:
- Highly trained and specially qualified technicians needed to train or supervise personnel in manufacturing, maintenance and repair functions may obtain treaty status, even though they may also perform some manual duties, provided that the firm cannot obtain the services of a qualified Canadian technician. However, it is expected that the Canadian firm will, within a reasonable period of time, locate and train a Canadian to replace this essential skills worker.
- Employees who are needed in the start-up of a treaty investment (but apparently not a treaty trader enterprise), because of their familiarity with the overseas operation rather than their specialized skills, may obtain treaty status. It is designed to assist new enterprises to establish themselves and to allow them a reasonable time to train Canadians. The granting of investor status to an employee in this situation will not normally exceed one year.
Applications for treaty trader or treaty investor status should be made to a Canadian consulate abroad. Technically, the IRPR permits a citizen of the United States or Mexico to apply at either a consulate or at the port of entry. However, due to the complexity of the application and reasons of client service, program consistency, and reciprocity, an application for a work permit as a treaty trader or treaty investor should be submitted at a Canadian consulate abroad. A person who wishes to submit such an application at the port of entry will be counselled to submit the application at a consulate. Because of reciprocal treatment offered to Canadians, Mexican citizens who are granted temporary resident status can also apply for trader or investor status from within Canada.
There is no time limit on how long aliens can remain in Canada as traders or investors. Temporary entry may be extended as long as the qualifying requirements for entry as a trader and investor continue to be met. A treaty investor or treaty trader work permit issued at the time of entry can have a maximum duration of one year. Extensions may be granted for up to two years at a time.