On May 9, 2016, the Ontario Immigrant Nominee Program (“OINP”) announced that the Province of Ontario had received a sufficient number of OINP applications to meet its 2016 federal allocation.  As a result, it has placed a temporary pause on the intake of applications under what it refers to as “select, high-volume” OINP streams.  However, it claims that other lower-volume OINP streams continue to be available.

The OINP announcement confirms the following facts:

As previously mentioned, when the Ontario Immigrant Nominee Program (“OINP”) announced the termination of its Investor Stream on October 29, 2015, it promised that it would create new Entrepreneur and Corporate Streams to replace it.  On December 18, 2015, the OINP published complete eligibility criteria and application guidelines for these new business streams.  Details of both are provided below.

The Corporate Stream

Overview

The Corporate Stream is intended to support established international corporations looking to expand into Ontario or buy an existing business.  The OINP is currently accepting applications under this stream.

An eligible corporation begins the process by submitting an application under the Corporate Stream.  If the application is approved, the corporation will be required to sign a Performance Agreement, which outlines its commitments to invest and create jobs in Ontario.  Key staff will then be issued temporary work permit support letters, which they can use to obtain work permits.

Once the key staff have arrived in Ontario, the corporation has up to 20 months from the date that they arrive to implement the business plan, actively manage the business, and meet all of the commitments outlined in the Performance Agreement.  All permanent full-time jobs that have been created must have been continuously filled for at least 10 months, prior to the corporation’s submission of its Final Report.

The applicant corporation is responsible for filing a Final Report with the OINP between 18 and 20 months after the key staff have arrived in Ontario with their valid work permits.  The Final Report must be submitted to the OINP in order to initiate the nomination process.

If the corporation is successful in meeting the commitments outlined in its Performance Agreement, the key staff will be eligible to apply for nomination.  If nominated by the OINP, these key staff members may apply for permanent residence under the Provincial Nominee Class.

Eligibility Requirements

Corporate/Investment Requirements

To be eligible under the Corporate Stream, the corporation must meet the following requirements:

• The corporation must have already been established for at least 36 months at the time of the application.
• The corporation must invest a minimum of $5 million CAD in a new or existing Ontario business.  The investment funds must have been obtained from lawful sources.
• The proposed investment activity must be of significant economic benefit to Ontario.
• If the corporation is purchasing an existing Ontario business, the following additional criteria apply: (1) the acquired business must have been in continuous operation by the same owner for the preceding 60 months, (2) the purchase must completely transfer ownership from the previous owner(s) to the corporation, (3) the Ontario business must not have been previously owned/operated by a current or former OINP business stream nominee, (4) the proposed business plan must intend to grow the business (buy and hold business plans with no intent to grow the business are not permitted), (5) the corporation must maintain, at a minimum, the current wage levels and employment terms of existing staff, (6)  the corporation must preserve all existing permanent full-time jobs, and (7) the corporation must also satisfy the job creation requirement (see below).
• The corporation must create 5 full-time, permanent positions for Canadian citizens or permanent residents for each key staff member nominated.  Positions must be paid or at above the prevailing wage for that position.  A full time position means a position that consists of at least 1,560 hours of paid employment in a 12 month period.  However, the following are not considered permanent, full-time employees even if the employee works 1,560 hours in a 12 month period:  (1) seasonal or part-time employees, (2) subcontactors or agency workers, or (3) employees who do not work on the corporation’s premises (i.e. employees who work from home or who telecommute).
• There must be a clear structural linkage between the parent corporation and the proposed new business in Ontario (i.e. subsidiary, branch, or affiliate of the parent).
• The business must intend to make a profit through the sale of goods and/or services.
• Primary income sources must be from active (earned) income, not passive (unearned) income.
• The proposed business must comply with Canadian legal requirements and all regulatory industry and licencing requirements, which govern its legitimate operation.
• The proposed business must comply with all provincial labour laws, including employment standards, health and safety, and labour relations legislation.
• The proposed business must be considered a permanent business in Ontario.
• The corporation must submit a business plan with its application, prepared in accordance with the OINP’s requirements.

Please note that additional criteria and due diligence requirements apply where the proposed business is a land development or leasehold company.  However, this is outside the scope of the present article.

Ineligible Business Types

As the OINP will not process applications for proposed businesses that are likely to have little or no long term economic benefit.  Therefore, the proposed Ontario business may not be:

• Existing Franchises in Ontario (new foreign franchises expanding into Ontario are permitted) [Greater Toronto Area ("GTA") only];
• Gas Stations [GTA only];
• Tire Recycling;
• Scrap Metal Recycling;
• Pawnbrokers;
• Bed and Breakfasts [GTA only];
• Holding Companies;
• Laundromats;
• Automated Car Wash Operations;
• Payday loan and related businesses; and
• Businesses which have been previously owned / operated by current or former OINP business stream nominees

Key Staff Requirements

Applicant corporations may request up to 5 key staff members who will establish the business in Ontario and who are seeking a provincial nomination to permanently relocate to the province.  All key staff must meet Stage 1 requirements at the time of the application in order for the complete application to be approved.  Key staff must also meet additional nomination requirements once the business has met commitments outlines in the Performance Agreement (Stage 2) in order to be considered eligible for provincial nomination.

Stage 1 Key Staff Requirements

• Key staff must be essential to the establishment and operation of the proposed business.
• Key staff must be in a senior, executive, managerial, or specialized knowledge capacity (National Occupational Classification (“NOC”) level 0 or A) in the applicant corporation’s existing business.
• Only one key staff in NOC A can be proposed.
• The key staff must have at least 36 months of experience in the last 60 months, in same position that they will hold in the proposed Ontario business, with the applicant corporation.  They must have been continuously working for the applicant corporation in that position during the 12 months prior to the submission of the application.
• Key staff must not have an immediate family relationship with any member of the corporation’s Executive Board, Board of Directors, or a shareholder owing more than 10% equity in the applicant corporation. Immediate family members include: spouse, mother, father, sister, brother, grandparents, and the spouse’s immediate family members.
• Key staff must not hold any equity in the applicant corporation, except where it was obtained as part of the remuneration in accordance with his or her employment contract, in which case the equity must be less than 10% of the applicant corporation’s business.
• The position to be assumed in the proposed Ontario business must be a permanent, full-time position and must meet prevailing wage levels.

Stage 2 Key Staff Requirements

After the corporation has met its Performance Agreement commitments, key staff will be required to meet the following additional requirements in order to be nominated for permanent residence:

• Key staff must be in a position for which they were approved by the OINP and carrying out the approved job duties.
• Key staff must physically reside in Ontario for at least 75% of each year (9 months out of the year) that they are in Ontario under a temporary work permit.
• Key staff must have a language proficiency equivalent to the Canadian Language Benchmark (“CLB”) Level 5.

The Entrepreneur Stream

Overview

The Entrepreneur Stream is designed to support individuals from countries who are looking to implement a new business idea or buy an existing business in the Province of Ontario.  However, unlike the Corporate Stream, individual entrepreneurs may not immediately submit an application under the Entrepreneur Stream. This is because the Entrepreneur Stream is subject to an Expression of Interest (“EOI”) System, which is similar to the Government of Canada’s Express Entry System.

Prospective entrepreneurs may submit an EOI to indicate their interest in being considered by the OINP they but will not be permitted to apply under the Entrepreneur Stream unless they receive an Invitation to Apply (“ITA”).  If the entrepreneur receives an ITA from the OINP, he or she can submit a complete application under the Entrepreneur Stream.

Under the EOI System, applicants are selected based on the number of ranking points that they receive, rather than when they file their application.  As a result, an applicant who submits an EOI after another applicant but who has a higher number of ranking points will receive an ITA before that other applicant.

Once an entrepreneur has received an ITA, has filed a complete application, and has been approved, he or she then signs a Performance Agreement with the OINP.  This Performance Agreement outlines the commitments that the entrepreneur has made to invest and create jobs in Ontario.  The OINP will then issue a temporary work permit support letter that the entrepreneur can use to apply for a temporary work permit, which will allow him or her to establish the proposed business in Ontario.

The entrepreneur must arrive in Ontario using their temporary work permit within 12 months from the date of their letter of confirmation.  Upon arrival, the entrepreneur will have up to 20 months from that date to implement the business plan and satisfy all of the commitments contained in the Performance Agreement.

The required permanent full-time jobs must be filled within 10 months from the date of the entrepreneur’s arrival in Canada they must remain filled for at least 10 months prior to the submission of the Final Report.  The entrepreneur will be responsible for filing a Final Report to the OINP between 18 and 20 months after he or she has arrived in Canada.  This Final Report must be submitted to the OINP in order to initiate the nomination process.

If the entrepreneur is successful in meeting the commitments described in the Performance Agreement, he or she will receive a Confirmation of Nomination, which may be used to apply for permanent residence.

Eligibility Requirements

Minimum Eligibility Requirements

There are 5 factors that have minimum eligibility requirements for the entrepreneur and, if applicable, his or her business partner:

• Experience – Applicants must have at least 36 months of full-time business experience in the last 60 months, with the last 12 months in either active general business administration or in an area of expertise related to the proposed business opportunity.  This experience must be as a business owner or senior manager.
• Net Worth - If the proposed business will be located in the GTA, the entrepreneur must have a minimum net worth of $1,500,000.00.  If the proposed business will be located outside the GTA, the entrepreneur must have a minimum net worth of $800,000.00.  If the proposed business will be in the Information and Communications Technology/Digital Communications Sector (regardless of where the  business is established in Ontario), the entrepreneur must have a net worth of $800,000.00.
• Personal Investment Funds – If the proposed business will be located in the GTA, the entrepreneur must make a minimum personal investment of $1,000,000.00 and have a minimum equity ownership of $33.3%.  If the proposed business will be located outside the GTA, the entrepreneur must make a minimum personal investment of $500,000.00 and have a minimum equity ownership of 33.3%.  If the proposed business will be in the Information and Communications Technology/Digital Communications Sector (regardless of where the  business is established in Ontario), the entrepreneur must make a minimum personal investment of $500,000.00 and have a minimum equity ownership of 33.3%.
• Job Creation – The entrepreneur must commit to creating at least 2 permanent full-time jobs for Canadian citizens or permanent residents.  Positions must be paid or at above the prevailing wage for that position.  A full-time position means a position that consists of at least 1,560 hours of paid employment in a 12 month period.  However, the following are not considered permanent, full-time employees even if the employee works 1,560 hours in a 12 month period:  (1) seasonal or part-time employees, (2) subcontractors or agency workers, or (3) employees who do not work on the corporation’s premises (i.e. employees who work from home or who telecommute).
• Exploratory Visit – If the entrepreneur purchases an existing business, he or she must make at least one business-related visit to Ontario with the 12 months preceding the submission of the application.

The entrepreneur must meet the minimum requirements for all of the above factors in order to be eligible to apply under the Entrepreneur Stream.  If the entrepreneur is applying with a business partner who is also seeking nomination, the business partner must also meet all of the minimum requirements for each factor described above.  For example, if the proposed business is located in the GTA, both the entrepreneur and the business partner must each investment $1,000,000.00 (a total of $2,000,000.00) and each create at least 2 permanent full time jobs (a total of 4).

General Requirements for the Proposed Business

In addition to the above minimum requirements, the proposed business must meet the following general requirements:

• The business must intend to make a profit through the sale of goods and/or services.
• Primary income sources must be from active (earned) income, not passive (unearned) income.
• The proposed business must comply with Canadian legal requirements and all regulatory industry and licencing requirements, which govern its legitimate operation.
• The proposed business must comply with all Ontario labour laws, including employment standards, health and safety, and labour relations legislation.
• The proposed business must be considered a permanent business in Ontario.
• Any third party investors must be a Schedule I or Schedule II bank or an institutional investor.

If the entrepreneur is purchasing an existing Ontario business, the following additional criteria apply:

• The Ontario business must have been in continuous operation by the same owner for the preceding 60 months
• The purchase must completely transfer ownership of the Ontario business from the previous owner(s) to the entrepreneur, the business partner, and/or third party investor(s).
• The Ontario business must not have been previously owned/operated by a current or former OINP business stream nominee.
• The entrepreneur must preserve all existing permanent full-time jobs and create 2 additional permanent full-time jobs.
• The entrepreneur must maintain, at a minimum, the current wage levels and employment terms of existing staff.
• The proposed business plan must demonstrate that the entrepreneur intends to grow the business.  Buy and hold business plans with no intent to grow the business are not permitted in the Entrepreneur Stream.

As with the Corporate Stream, the OINP will not process applications for proposed businesses that are likely to have little or no long term economic benefit.  Therefore, the proposed Ontario business may not be:

• Existing Franchises in Ontario (new foreign franchises expanding into Ontario are permitted) [Greater Toronto Area ("GTA") only];
• Gas Stations [GTA only];
• Tire Recycling;
• Scrap Metal Recycling;
• Pawnbrokers;
• Bed and Breakfasts [GTA only];
• Holding Companies;
• Laundromats;
• Automated Car Wash Operations;
• Payday loan and related businesses; and
• Businesses which have been previously owned / operated by current or former OINP business stream nominees

Nomination Requirements

The entrepreneur will be required to satisfy additional nomination requirements in order to be nominated by the OINP, once he or she has established the Ontario business and met the commitments described in the Performance Agreement.  The entrepreneur does not need to satisfy these criteria at the time of the initial application filing but must do so when applying for nomination after the business has been established.  The nomination criteria are as follows:

• The entrepreneur must have a language proficiency equal to CLB Level 5 or equivalent.
• The entrepreneur must be physically residing in Ontario for at least 75% of each year (9 months out of the year) that they are in Ontario establishing his or her business under a temporary work permit.

EOI Scoring Factors and Breakdown of Ranking Points

When a proposed entrepreneur submits an EOI, he or she will receive a total ranking score.  These ranking points may be earned in three categories: (1) experience, (2) investment, and (3) human capital; the maximum score available is 160 points.  These three categories are briefly described below.

Experience Factors

The maximum number of points awarded for experience factors is 50 points.

Applicants may claim points based on past business ownership or senior management experience during the last 60 months.  If an applicant has both business ownership experience and senior management experience during the past 60 months, he or she must use only 1 of these 2 types of experiences in the EOI.

The maximum number of points awarded for experience as a business owner is 25 points.  A business owner must have owned at least 33.3% of the business during the period claimed. A business owner must also have played an active role, meaning that he or she was personally involved in the day-to-day operations of the business and had direct involvement in decision making.

The maximum number of points awarded for experience as a senior manager is 20 points.  A senior manager’s role must have included senior decision-making responsibilities in areas such as operations, sales, finance, marketing, distribution, human resources, research and development, etc.

Entrepreneurs may also claim additional points based on past specific experiences in a high growth business and/or export trade business:

• High Growth Business - Experience in a business that experienced at least a 20% increase in revenue in 2 consecutive years.  Applicants will receive 15 points for this specific experience.
• Export Trade Business – Experience in a business exporting at least 20% of goods/services to a foreign market.  Applicants will receive 25 points for this specific experience.

Investment Factors

The maximum number of points awarded for investment factors is 90 points.  Applicants may claim points for net worth, investment amount, job creation, exploratory visits, key sectors, and NOC classification of the jobs that the proposed Ontario business will create:

• Net Worth – Applicants may claim points based on total net worth, up to a maximum of 15 points.  Personal net worth must be legally obtained and verifiable.
• Investment Amount – Applicants may claim points based on the total personal investment amount that will be made into the proposed Ontario business, up to a maximum of: (1) 20 points for a proposed Ontario business located within the GTA, or (2) 25 points for a proposed Ontario business located outside the GTA or in the Information and Communications Technology/Digital Communications Sector.  However, the following are not considered eligible investments: (1) cash, cash equivalents, and working capital (i.e. uncommitted funds) held by the Ontario business, and (2) wage payments made to the entrepreneur and his or her family members.
• Job Creation – Applicants may claim points based on the total number of permanent full time jobs that the proposed Ontario business will create for Canadian citizens or permanent residents, up to a maximum of 20 points.
• Exploratory Visits – Applicants may claim points based on any business-related visits to Ontario within the 1 year period preceding the submission of the EOI, up to a maximum of 5 points.  However, there is no mandatory requirement for any exploratory visits unless the entrepreneur is purchasing an existing business.
• Key Sectors Targeted – Applicants may claim points depending on whether the proposed Ontario business is in a key sector, as determined by the Government of Ontario, up to a maximum of 10 points.  However, there is no mandatory requirement that the proposed Ontario business be on one of these key sectors.  Key sectors currently defined as economic priorities for Ontario are: (1) aerospace, (2) automotive. (3) financial services, (4) food and beverage manufacturing, (5) information and communications technology, (6) life sciences, (7) mining, (8) tourism investment, and (9) water technology.
• NOC 0, A, or B Jobs – Applicants may claim points based on the NOC 0, A, or B jobs that the proposed Ontario business will create for Canadian citizens or permanent residents, up to a maximum of 15 points.  However, there is no mandatory requirement that the 2 newly created jobs actually be in NOC 0, A, or B.

Human Capital Factors

The maximum number of points that may be awarded for human capital factors is 20 points.  Applicants may claim points based on their level of education and official language ability:

• Level of Education – Applicants may claim points based on their highest level of post-secondary education completed, up to a maximum of 5 points.  However, there is no minimum education requirement to be considered for the Entrepreneur Stream.  Post-secondary education refers to full-time studies from a licenced post-secondary institution that leads to a credential that is the equivalent to a Canadian degree, diploma, or certificate.  If an entrepreneur receives an ITA, and claiming to have completed 6 months or more of post-secondary education, they will be required to provide evidence of this education when they submit their complete application, including their Educational Credential Assessment results.
• Official Language Ability -Applicants may claim points based on their proficiency in English or French, up to a maximum of 15 points.   Although there is no minimum mandatory language requirement to be considered for the Entrepreneur Stream at the EOI stage, language proficiency equal to CLB Level 5 will be required at the time that they apply to be nominated by the OINP.

Background

As was previously mentioned, Jason Kenney, Minister of Employment and Social Development, and Chris Alexander, Minister of Citizenship and Immigration, announced changes to Canada’s Temporary Foreign Worker (“TFW”) program on June 20, 2014.  Among these changes was a proposal to impose fines of up to $100,000 on employers who violated the TFW program.  The names of employers who were fined, and the amount of the fine, would also be published on the public list of violators.

At the end of September 2014, Employment and Social Development Canada (“ESDC”) published a discussion paper, which proposed to implement a system of Administrative Monetary Penalties (“AMPs”) for violations of the TFW program.  It also proposed to increase the maximum ban for employers who violate the TFW program from two years to ten years (a permanent ban was also being considered).

On June 12, 2015, the Minister of Citizenship and Immigration published amendments (the “Amendments”) to the Immigration and Refugee Protection Regulations (“IRPR”), which were intended to implement these proposed changes.  These Amendments will now come into force on December 1, 2015.

Overview

According to R209.94, the purpose of AMPs is to encourage compliance with the provisions of the Immigration and Refugee Protection Act (“IRPA”) and the IRPR, and not to punish.  According to R209.95(1), an employer who fails to comply with one of the conditions listed in Schedule 2, Table 1, if the failure to do so is not justified under the IRPR, commits a violation and:

1. Is liable to an administrative monetary penalty of an amount that is determined in accordance with R209.98 [see Schedule 2, Table 2] or if it is determined under that section that there is no penalty, is issued a warning informing the employer that there is no administrative monetary penalty for the violation but that the violation will be considered in the calculation of the total number of points under R209.991(1)(a)(i) [see Schedule 2, Tables 4 and 5] for any subsequent violation; and
2. If applicable, is ineligible to employ a foreign national for whom a work permit is required for the period determined in accordance with R209.99 [Schedule 2, Table 3].

Calculation of AMPs

The AMPs will be determined by the Minister of Employment and Social Development (“ESDC”) or a Citizenship and Immigration Canada (“CIC”) officer based on:

1. The type of violation;
2. Whether the employer is an individual, small business, or large business;
3. The employer’s history of violations that occurred on or after December 1, 2015; and
4. The severity of the violation according to a system of points.

AMPs are cumulative, and separate AMPs will be imposed for each violation.

According to R209.93, the term “small business” is defined as any business, including its affiliates, that has fewer than 100 employees or less than $5 million in annual gross revenues at the time a request for an assessment is received, or if no such request is made, at the time a copy of an offer of employment for a work permit application is provided to the Minister.  The term “large business” is defined as any business that does not meet the definition of “small business.”

According to R209.991, the total number of points in respect of each violation is determined by adding the points resulting from the employer’s compliance history [Schedule 2, Table 4] to the points resulting from the severity of the violation [Schedule 2, Table 5].  However, where the employer has made an acceptable voluntary disclosure, the total number of calculated points may be reduced as follows:

1. If the total number is four or more, four points will be subtracted from the total; or
2. If the total number is less than four, the value will be replaced with a value of zero.

The voluntary disclosure made by an employer with respect to the commission of a violation by the employer is considered acceptable if:

1. The disclosure is complete; and
2. At the time the voluntary disclosure is made, the employer’s compliance is not being reviewed and no enforcement action related to an offence under IRPA is being undertaken against the employer.

However, a CIC officer or the Minister of ESDC may still conclude that the voluntary disclosure is not acceptable after considering

1. The severity of the impact of the violation on the foreign national;
2. In the case of an LMIA-exempt work permit, the severity of the impact of the violation on the Canadian economy, or in the case of an LMIA-based work permit, the severity of the impact of the violation on the Canadian labour market;
3. Whether the disclosure was made in a timely manner;
4. The number of times an acceptable voluntary disclosure is made by the employer; and
5. The nature of the condition with which the employer failed to comply.

The maximum AMP is $100,000 per violation and the total that can be imposed is capped at $1 million on a single notice of final determination.  In addition, the total AMPs imposed on a single employer cannot exceed $1 million in the one-year period preceding the date of the final determination.

There is no limitation on the collections period for AMPs.  A new Labour Market Impact Assessment (“LMIA”) or work permit application will not be accepted if the employer has not paid an outstanding AMP or is not complying with a payment agreement (if it has entered into one).

Rules Applicable to Violations

As violations are calculated based on the number of violations that have occurred, the following rules will determine when certain conduct will be treated as a separate violation:

1. A violation of a condition that affects more than one foreign national constitutes a separate violation for each foreign national affected [R209.96 (1)].
2. A violation of any one of the following conditions constitutes a separate violation:
• To provide the foreign national with employment in the same occupation as the occupation that is set out in the foreign national’s offer of employment;
• To provide the foreign national with wages that are substantially the same as — but not less favourable than — those set out in the foreign national’s offer of employment; and
• To provide the foreign national with working conditions that are substantially the same as — but not less favourable than — those set out in the foreign national’s offer of employment [R209.96(2)]
3. For employers who employ foreign nationals as live-in caregivers, a violation of either one of the following conditions constitutes a separate violation:
• To ensure that the foreign national resides in a private household in Canada,
• To ensure that the foreign national provides child care, senior home support care or care of a disabled person in that household without supervision [R209.96(3)].
4. A violation of the condition of making reasonable efforts to provide a workplace that is free of abuse within the meaning of R72.1(7)(a) [physical abuse, sexual abuse, psychological abuse, and financial abuse] constitutes a separate violation [R209.96(4)].

Assessment Procedure

If it is assessed during an inspection that a violation has been committed because the employer failed to comply with a condition and that failure was not justified under the IRPR, a preliminary finding must be issued to the employer.  A notice of preliminary finding may be corrected or cancelled before a final determination is made.

After the notice of preliminary finding is issued, employers will be provided the opportunity to make written submissions regarding the information in the notice within 30 days after it is received.  An employer may be granted an extension to this opportunity to respond if the Minister of ESDC or the CIC officer is satisfied that there is a reasonable explanation for requesting a longer period.

The Minister of ESDC or a CIC officer shall issue a notice of final determination if it is determined that a violation was committed because the employer failed to comply with a condition and that failure was not justified.  This determination is final and binding except for judicial review.

Ineligibility to Participate in the TFWP

Employer violations may also result in a ban from future participation in the TFW program.  As of December 1, 2015, the maximum period of ineligibility will change from two years to a permanent ban in the most serious cases. 

According to R209.99(1), the period of ineligibility for a violation is the period set out in Column 2, 3 or 4 of Schedule 2, Table 3.  If a ban is imposed, the duration of the ineligibility can vary from one year to a permanent bar, depending on the circumstances.  According to R209.99(2), the ban begins on the day that the determination is made in respect of the employer.

Publication of Employer’s Information

According to R209.997(1), if the Minister of ESDC or a CIC officer makes a determination under R209.996 that a violation has occurred, the employer’s details will be added to the public list of violators, except where the employer has received only a warning and no AMP has been imposed.  The public list will include the following information:

1. The employer’s name;
2. The employer’s address;
3. The criteria or conditions with which the employer failed to comply;
4. The day on which the determination was made;
5. The eligibility status of the employer; and
6. If applicable:
• The AMP amount, and
• The ineligibility period of the employer.

Conclusion

In light of the increased penalties that will become effective on December 1, 2015, it is critical that employers ensure their compliance with all conditions imposed upon them, in connection with any LMIA-based or LMIA-exempt work permit, and that they continue to comply with these conditions for the duration of the TFWs work permit in Canada.

SCHEDULE 2

VIOLATIONS

TABLE 1
EMPLOYER CONDITIONS

TABLE 2
ADMINISTRATIVE MONETARY PENALTY AMOUNTS

TABLE 3
PERIOD OF INELIGIBILITY

TABLE 4
COMPLIANCE HISTORY

TABLE 5
SEVERITY OF THE VIOLATION

Introduction

Foreign-based franchisors may wonder how difficult it would be to expand their businesses into the United States.  Although ensuring compliance with local franchising laws is essential, it is not the only challenge that foreign-based franchisors will face when attempting to establish a presence in the United States.

For example, most foreign-based franchisors will not have the same level of brand recognition in the United States as they will have in their own countries.  For this reason, it may be much more difficult to find potential franchisees in the target country.

One possible solution is for the foreign-based franchisor to initially sell its U.S. franchises to citizens of its home country, or citizens of other countries where it may already have an established presence.  This solution offers significant advantages because many of the potential franchisees from these countries will be familiar with the franchisor’s brand name and business operations abroad.  However, it also creates an additional layer of complexity for franchisors, who will now need to advise their foreign franchisees on applicable U.S. immigration laws.

Fortunately, in most cases, a foreign franchisee will be eligible to own and operate a franchised business under the E-2 treaty investor category.  A summary of key E-2 eligibility requirements is provided below.

E-2 Treaty Investor Status Available to Specific Nationalities Only

The basis for E-2 treaty investor category lies in treaties that are intended to enhance and facilitate economic and commercial interaction between the United States and the treaty country.  Many countries (including Canada) already have an eligible treaty in force with the United States; a complete list of these eligible countries appears here.

Provided that the foreign franchisor’s home country, or other country where the franchisor has an established presence, has an eligible treaty with the United States, its citizens will be eligible to seek an E-2 visa.  However, E-2 eligibility does not extend to permanent residents of those eligible treaty countries.

The Foreign Franchisee Must Make a Qualifying Investment in the United States

In order to qualify for an E-2 visa, the foreign franchisee must have made a qualifying investment in the treaty business.  To establish this qualifying investment, the following must be established:

1. The foreign franchisee must be in possession and control over the capital invested. In other words, he or she must have acquired the investment funds by legitimate means (savings, gift, inheritance, contest, etc.) and have control/possession over the invested funds.
2. Capital in the process of being invested or that has been invested must be irrevocably committed to the enterprise. Therefore, a significant portion of the investment must already have been spent in furtherance of the franchised business before an E-2 visa will be issued.
3. The qualifying investment must be at risk in the commercial sense with the objective of generating a profit. In other words, the investment must come from the foreign franchisee’s personal capital or, if a loan is obtained, it must not be secured on the assets of the franchised business.

The Foreign Franchisor’s Investment Must be Substantial

The foreign franchisee’s qualifying investment in the treaty business must also be considered substantial.  The official position of the United States Department of State (“DOS”) is that there is no set minimum dollar amount that will be considered “substantial” for the purposes of E-2 eligibility.  Instead, U.S. consular officers apply what is known as the proportionality test.

The proportionality test is a comparison between two figures:

1. The amount of qualifying funds invested; and
2. The cost of an established business or, if a newly created business, the cost of establishing such a business.

The lower the cost of the business, the higher the percentage the qualifying investment must be.

The question of whether a proposed investment will be considered substantial is very discretionary matter.  According to the current version of the Foreign Affairs Manual (“FAM”), investments of 100% or higher would normally automatically qualify for a small business of $100,000.00 or less.  At the other extreme, an investment of $10 million in a $100 million business would likely qualify, based on the sheer magnitude of the investment itself.

The examples provided in the current FAM are not very illustrative.  However, a prior version of the FAM did include the following specific examples of acceptable proportionality:

1. In the case of a $50,000.00 investment, an investment approaching 90-100% would easily meet the test;
2. A business costing $100,000.00 might require an investment of 75-100% to meet the test;
3. A business costing $500,000.00 would demand generally upwards of a 60% investment, with a $375,000.00 investment clearly meeting the test;
4. In the case of a million-dollar business, a lesser percentage might be needed, but a 50-60% investment would qualify;
5. A business requiring $10 million to purchase or establish would require a much lower percentage—a $3 million investment might suffice in view of the sheer magnitude of the dollar amount invested; and
6. An investment of $10 million in a $100 million business would qualify based on the sheer magnitude of the investment itself.

The above examples were later deleted from the FAM because too many consular officers were interpreting them as bright line tests.  Nevertheless, they can still be useful as examples of acceptable proportionality.

Despite the official DOS position that there is no minimum dollar amount, in practice, many U.S. consular posts still apply an unofficial minimum dollar threshold, in addition to the proportionality test.  This threshold will vary depending on the particular consular post.

For E-2 visa applications filed at U.S. consular posts located in Canada, a proposed investment of $75,000.00 or higher (preferably closer to $100,000.00) is normally sufficient to satisfy the unofficial minimum dollar threshold.  An investment as low as $50,000.00 may be acceptable in specific cases, but the chances of a denial will be much greater at this level of investment.

Franchised Business Must Not be a Marginal Enterprise

In order to qualify for an E-2 treaty investor visa, it must be established that the franchised business is not a “marginal enterprise.”  This term is defined as an enterprise that does not have a present or future capacity to generate more than enough income to provide a minimal living for the treaty investor and his dependents.  In the case of future capacity (i.e. new business), this should be realizable within five years from the date that the foreign franchisee commences business operations in the United States.  Typically, the foreign franchisor will need to demonstrate that the franchised business will support several U.S. employees and still earn sufficient net income to support the foreign franchisor and his or her dependents, within the first five years of business.

Foreign Franchisee Must Develop and Direct the Treaty Business

An E-2 treaty investor must be seeking entry solely to develop and direct the treaty business.  The ability to develop and direct can normally be established by owning at least 50% of the treaty business (if the applicant retains full rights of control over that portion of the business and has not assigned them to another), by possessing operational control through a managerial position or other corporate device, or by other means.

Most franchisees will own 100% of their franchised business.  However, franchise agreements often contain restrictions on how the franchisee can operate the business.  If these restrictions are too onerous, it is possible that a consular officer could conclude that operational control has been transferred to the franchisor by contract.  If this occurs, the foreign franchisee will no longer have the ability to develop and direct the treaty business.

The above issue was previously considered in the precedent decision of Matter of Kung, 17 I&N Dec. 260 (Comm’r 1978).  In that case, the Commissioner concluded that a franchisee could still qualify for E-2 status if he or she retained sufficient control over the management of the business, including the ability:

1. To hire and fire employees;
2. To set wage scales; and
3. To set the hours of the business.

The franchise agreement considered in Matter of Kung was actually quite restrictive.  Nevertheless, Commissioner concluded that the franchisee retained sufficient control over the treaty business.

In light of Matter of Kung, most franchisees should be able to demonstrate their ability to develop and direct the franchised business.

Hiring Foreign Employees

If a foreign franchisee is found to be eligible for an E-2 treaty investor visa as a principal investor, he or she may also hire foreign employees (if they hold the same nationality) who will be employed in an executive, supervisory, or essential skills capacity.  This allows the foreign franchisee to send key employees to the United States in order to assist in the operation of the franchised business.

Executive or supervisory duties grant the employee ultimate control and responsibility for the enterprise’s overall operation or a major component thereof.  An executive position provides the employee great authority to determine the policies and direction of the enterprise.  A supervisory position grants the employee supervisory responsibility for a significant proportion of an enterprise’s operations and does not generally involve the direct supervision of low-level employees (i.e. first line supervisors will not qualify).

Essential skills workers are employees who have special qualifications that make the service to be rendered essential to the efficient operation of the treaty enterprise. In other words, it must be established that the employee possesses specialized skills and that those skills are needed by the treaty enterprise. It must also be established that the treaty investor has a long-term need for the employee’s essential skills. Otherwise, the consular officer will expect the essential skills worker to eventually be replaced by a U.S. worker (typically within two years).

Duration of E-2 Visas

The maximum validity period for an E-2 visa will depend upon reciprocity with the foreign national’s country of nationality.  The maximum validity period for each country is shown in the reciprocity tables published by DOS; these reciprocity tables are available online.  In many cases, the maximum duration of an E-2 visa will be five years at a time.

During the validity period of an E-2 visa, the visa holder may freely enter the United States Status in connection of the treaty business.  They may also remain continuously in the United States for a maximum period of two years at a time.

There is no maximum limit on the number of years that an E-2 treaty investor may hold such status.  As long as they remain eligible, E-2 treaty investors may continue to renew their E-2 visas indefinitely.

The long-term nature of the E-2 category ensures that foreign franchisees who establish franchised businesses in the United States will be allowed to continue operating these businesses for an extended period.

Conclusion

For the above reasons, foreign-based franchisors who are interested in expanding their businesses into the United States may wish to consider selling at least some of their U.S. locations to citizens of other eligible treaty countries, especially those countries where the company’s brand is already well established.  This will help to simplify the task of finding potential franchisees and may help to accelerate the company’s expansion into the United States.

On January 12, 2014, I previously reported that Citizenship and Immigration Canada (“CIC”) had published a Notice of Intent in the Canada Gazette. This Notice of Intent indicated CIC’s intention to introduce an Electronic Travel Authorization (“eTA”) Program in Canada.

The eTA program is a result of the Canada-United States Perimeter Security and Economic Competitiveness Action Plan (the “Action Plan”).  The Action Plan requires Canada and the United States to establish a common approach to screening visa-exempt foreign nationals, in order to identify threats before they arrive in the North American perimeter.  The eTA Program will be similar to the Electronic System for Travel Authorization (“ESTA”) Program, which currently applies to foreign nationals who enter the United States under the Visa Waiver Program.

On April 1, 2015, CIC published regulations (the “eTA Regulations”) in the Canada Gazette.  These eTA Regulations will come into force at 12:00 p.m. Eastern time, on August 1, 2015.

At that time, the online application will be available and eTA processing will begin.  However, in order to minimize impacts on the travelling public, travelers will be exempted from the eTA requirement until March 15, 2016.  In other words, CIC will begin accepting online eTA applications on August 1, 2015, but travelers will not actually be barred from entering Canada until March 15, 2016.

The normal procedure to apply for an eTA will be through the online application form.  However, persons with physical or mental disabilities will be allowed to submit an application by another means that is made available for that purpose, such as a paper application form.

As the eTA Program is only intended to apply to visa-exempt applicants, a foreign national who holds a temporary resident visa is not required to also obtain an eTA.  Further, in order to reduce the duplication of information to be provided by visa-exempt foreign nationals, the eTA Regulations consider a visa-exempt foreign national’s application for a work permit or a study permit to constitute an application for an eTA.   As a result, visa-exempt applicants who apply for a work permit or study permit will not need to obtain an eTA.

Applicants will pay a $7.00 CAD processing fee electronically in connection with their online eTA application.  In circumstances where another application process is used, the fee will be paid when they submit their application.  Visa-exempt foreign national who are applying for a work permit or study permit will be exempted from this fee.

An eTA will be valid for five years from the day on which it is issued or until the applicant’s passport or travel document expires, whichever comes first.  The eTA Regulations also provide an officer with the ability to cancel an eTA that was issued to a foreign national if the officer determines that the foreign national is inadmissible or if the foreign national became subject to a declaration made by the Minister under the Immigration and Refugee Protection Act.

According to the new R7.1(3), the following individuals will be exempt from the requirement to obtain an eTA before applying for admission to Canada:

• Her Majesty in right of Canada and any member of the Royal Family
• A national of the United States;
• A foreign national referred to in R190(2)(a) [a foreign national who holds hold a passport that contains a diplomatic acceptance, a consular acceptance or an official acceptance issued by the Chief of Protocol for the Department of Foreign Affairs and International Trade on behalf of the Government of Canada and are a properly accredited diplomat, consular officer, representative or official of a country other than Canada, of the United Nations or any of its agencies, or of any international organization of which Canada is a member];
• A foreign national seeking to enter and remain in Canada solely: (i) as a member of a crew of a means of transportation that may be used for transportation by air or to become a member of such a crew, or (ii) to transit through Canada after working, or to work, as a member of a crew of a means of transportation that may be used for transportation by air, if they possess a ticket for departure from Canada within 24 hours after their arrival in Canada;
• A citizen of France who is a resident of St. Pierre and Miquelon who seeks to enter Canada directly from St. Pierre and Miquelon; and
• A foreign national referred to in R190(3)(b) [a foreign national who seeks to transit through Canada as a passenger on a flight stopping in Canada for the sole purpose of refuelling and: (i) they are in possession of the documents required in order to enter the United States and their flight is bound for that country, or (ii) they were lawfully admitted to the United States and their flight originated in that country], R190(3)(b.1) [a foreign national who seeks to transit through Canada as a passenger on a flight that, owing to an emergency or other unforeseen circumstances, makes an unscheduled stop in Canada], R190(3)(c) [a foreign national who seeks to transit through Canada as a passenger on a flight if the foreign national: (i) is transported by a commercial transporter and there is a memorandum of understanding in effect between the Minister and the commercial transporter concerning the transit of passengers through Canada without a Canadian visa, (ii) holds a passport or travel document that was issued by the country of which the foreign national is a citizen or national and that country is listed in the memorandum of understanding, and (iii) is in possession of any visa required to enter the country of destination], R190(3)(d) [a foreign national who seeks to carry out official duties as a member of the armed forces of a country that is a designated state for the purposes of the Visiting Forces Act, unless they have been designated under that Act as a civilian component of those armed forces], R190(3)(f) [a foreign national who seeks to re-enter Canada following a visit solely to the United States or St. Pierre and Miquelon, if they: (i) held a study permit or a work permit that was issued before they left Canada on such a visit or were authorized to enter and remain in Canada as a temporary resident, and; (ii) return to Canada by the end of the period initially authorized for their stay or any extension to it], R190(3)(g) [a foreign national who seeks to conduct inspections of the flight operation procedures or cabin safety of a commercial air carrier operating international flights, if they are a civil aviation inspector of a national aeronautical authority and possess valid documentation to that effect], or 190(3)(h) [a foreign national who seeks to participate as an accredited representative or as an adviser to an aviation accident or incident investigation conducted under the Canadian Transportation Accident Investigation and Safety Board Act, if they possess valid documentation to that effect].

This final list of eTA exemptions differs from the proposed list initially contained in the Notice of Intent as follows:

• A new temporary resident visa exemption [R190(3)(b.1)] and corresponding eTA exemption has been added for foreign nationals who arrive on-board flights that stop in Canada unexpectedly owing to an emergency or other unforeseen circumstances.
• A new eTA exemption has been added for foreign nationals transiting through Canada under Government of Canada transit programs (i.e. the Transit Without Visa Program and the China Transit Program) and who are currently visa-exempt under R190(3)(c).

In response to stakeholder requests to leverage the eTA to liberalize visa requirements, the eTA Regulations also eliminate the requirement that nationals from Lithuania or Poland obtain a temporary resident visa if they do not hold a machine-readable passport that contains a contactless integrated circuit chip.  As a result, Lithuania and Poland have now been added to the list of visa-exempt countries that appear in R190(1)(a); they will instead be subject to eTA requirements.

The eTA Regulations also eliminate R190(3)(e), which provided a visa-exemption to foreign nationals seeking to enter Canada from the United States for a U.S. immigrant visa interview, if they could establish that they would be re-admitted to the United States.

Introduction

On December 16, 2014, Citizenship and Immigration Minister Chris Alexander (the “Minister”) announced that Canada will unveil its Immigrant Investor Venture Capital Pilot Program (the “IIVC”) at the end of January 2015.  The IIVC is designed to attract experienced business immigrants who will actively invest in the Canadian economy and will be available to approximately 50 investors and their families (presumably each year).  Although full details of the IIVC have not been announced yet, what is known so far is summarized below.

Eligibility

The eligibility criteria under the IIVC are designed to attract investors with skills and abilities that will help them integrate into the Canadian economy and society.  These criteria will include the following:

• Proven language proficiency in English or French;
• Either: (1) a Canadian post-secondary degree, diploma or certificate; or (2) a foreign educational credential plus an Canadian educational equivalency assessment from a designated organization;
• A legally obtained net worth of at least $10 million CAD derived from lawful, profit-making business activities, which will be verified by a designated due diligence service provider (only applicants selected for processing under the IIVC will be required to obtain a due diligence report); and
• A non-guaranteed investment in the amount of $2 million CAD, paid into the IIVC fund for a period of 15 years (the funds will be invested in Canadian-based start-ups having high growth potential).

Overview of the Application Process

Citizenship and Immigration Canada (“CIC”) will accept up to a maximum of 500 applications within a specified period.  Applications will be selected randomly for processing until approximately 50 approved applications are finalized.  Applications that are not selected will be returned once the cap has been reached.

CIC claims that selected applicants should receive a decision on their applications within approximately six months of submitting all required documentation.  A similar time frame has also been suggested for applicants who are selected under the new Express Entry system.  However, it remains to be seen whether CIC will actually meet this processing standard once it begins processing IIVC and Express Entry applications.

Analysis of the IIVC

The opening of a new program for immigrant investors is good news, especially since the Canadian Government stopped accepting applications under the previous Immigrant Investor Program on July 1, 2012 (it later terminated the entire program).  However, the IIVC is a pilot program (such programs have a maximum duration of 5 years) and it will be limited to 50 applicants (presumably each year).

In addition, the IIVC must be considered in light of investor programs offered by other countries.  Unless a particular investor is predisposed to choosing Canada, he or she is unlikely to apply under the IIVC unless its eligibility criteria are more generous than those applied by the investor programs of those other countries.

For example, the EB-5 Immigrant Investor Program (the “EB-5 Program”) currently offered by the United States requires only an investment of only $1 million USD in a qualifying business, with no specific net worth requirement.  In addition, applicants who choose to invest in an approved EB-5 Regional Center can invest as little as $500,000 USD (although they will also need to fall within the definition of “accredited investor” in order to comply with U.S. securities laws.

The EB-5 Program does impose additional restrictions that will probably not apply under the IIVC.  For example:

• In most cases the EB-5 Program requires the direct creation of 10 full-time jobs for U.S. citizens, permanent residents, or other lawfully permitted immigrants.  However, in Targeted Employment Areas (most EB-5 Regional Centers are established in such areas), it is possible to demonstrate the indirect creation of these jobs resulting from the investment itself.
• EB-5 Program applicants are given conditional permanent resident status for 2 years and must apply to remove their condition after that date.  However, once the condition has been removed, EB-5 immigrants are permitted to sell their interest in the EB-5 investment (the IIVC will impose a 15-year investment obligation).

Conclusion

Although the IIVC certainly has potential, it remains to be seen whether the program will be popular with foreign investors, in light of the investor options currently offered by other countries.

Introduction

On December 1, 2014, Citizenship and Immigration Canada (“CIC”) published Ministerial Instructions relating to its proposed Express Entry System (“Express Entry”).  Express Entry will come into effect on January 1, 2015, at 12:00 noon EST, and will apply to the following categories:

1. The Federal Skilled Worker (“FSW”) Class;
2. The Canadian Experience Class (“CEC”);
3. The Federal Skilled Trades (“FST”) Class; and
4. Members of the Provincial Nominee Class who fall within the Express Entry Stream of a Provincial Nominee Program (“PNP”).

In summary, Express Entry will apply to all FSW, CEC, and FST applications filed on or after January 1, 2015.  However, it will not apply to any existing PNP streams.  Instead, each province will have the option of establishing a new Express Entry Stream under its existing PNP.

Overview

Potential candidates will be permitted to submit an online Express Entry profile (i.e. an “Expression of Interest”).  At this time, they will be asked to provide information about their: (a) skills, (b) work experience, (c) language ability, (d) education, and (e) other relevant factors.  However, if a candidate is unable to submit an Expression of Interest online, due to a physical or mental disability, it may be submitted by another means made available by CIC for that purpose.

Candidates who meet the applicable eligibility requirements of at least one of the classes described above (i.e. FSW, CEC, FST, or PNP Express Entry stream) will be accepted into a special pool of candidates (the “Express Entry Pool”).  However, acceptance into the Express Entry Pool does not guarantee that a particular candidate will be issued an Invitation to Apply (“ITA”) for permanent residence.  Instead, candidates in the Express Entry Pool will be ranked against each other using a point-based system called the Comprehensive Ranking System; these points will be awarded using the information contained in each candidate’s Expression of Interest.  The candidates with the highest ranking will be periodically selected from the Express Entry Pool.

Candidates may not receive an ITA unless they satisfy the following requirements:

1. They must satisfy the eligibility requirements of at least one of the classes described above (i.e. FSW, CEC, FST, or PNP Express Entry stream).
2. They must have a positive Labour Market Impact Assessment (“LMIA”), if they are working in Canada under a work permit issued pursuant to: (1) an international agreement between Canada and one or more foreign countries (such as a work permit based on the NAFTA or similar free trade agreements), or (2) a federal-provincial agreement (such as a work permit based on a PNP Nomination Certificate).  This language was particularly troubling because appeared to preclude the issuance of an ITA to certain foreign workers who would not otherwise require an LMIA, unless their Canadian employer obtained one on their behalf.  However, CIC later confirmed that it only intended to clarify that a temporary foreign worker in Canada under an LMIA-exempt work permit would not earn any Express Entry ranking points for arranged employment.
3. Within 30 days from the date that they submit their Expression of Interest, they must register with the Job Bank maintained by Employment and Social Development Canada (“ESDC”), if they do not have a qualifying offer of arranged employment or are not named in a Nomination Certificate issued under a PNP Express Entry stream at the end of that period.

If someone receives an ITA, they will have sixty days to submit an online application for permanent residence.  CIC expects to process the majority of complete applications (meaning those with all the necessary supporting documents) in six months or less.

Candidates accepted into the Express Entry Pool may remain in the pool for up to twelve months, starting on the date that their Expression of Interest was submitted.  If they do not receive an ITA during this period, they will be removed from the pool.  However, they may submit a new Expression of Interest; if they still satisfy the criteria, they can re-enter the Express Entry Pool.

If a candidate declines the invitation within the sixty-day period, the remaining portion of the original one-year period of their inclusion in the Express Entry Pool will continue.  However, if the candidate does not decline the invitation within the sixty-day period and does not make an application for permanent residence within that period, the Expression of Interest will end, regardless of the portion of the one-year period that remains.

Mandatory Submission of Educational Credential Assessments and Language Proficiency Results

Candidates will be required to provide the results of an assessment of their proficiency in English or French (issued by a designated language testing organization or institution) at the time that they submit their Expression of Interest.  Language proficiency assessments are valid for a period of two years from the date that they are issued.

In addition, candidates who are relying on foreign education will be required to provide the results of a valid educational credential equivalency assessment (issued by a designated credential evaluation organization or institution) at the time that they submit their Expression of Interest.  Educational credential assessments are valid for a period of five years from the date that they are issued.

The Comprehensive Ranking System

The ranking of candidates who are included in the Express Entry Pool will be based on the total number of points assigned to each candidate, using the information provided in their Expression of Interest and in accordance with the Comprehensive Ranking System, which considers the following factors:

1. Core human capital factors;
2. Accompanying spouse or common-law partner factors;
3. Skill transferability factors; and
4. Factors relating to a provincial nomination or a qualifying offer of arranged employment.

Maximum Points Allocations

The total number of points that may be assigned under the Comprehensive Ranking System is 1200 points.  These points will be allocated as follows:

1. Where a candidate has no accompanying spouse or common-law partner: (i) a maximum of 500 points for core human capital factors, (ii) a maximum of 100 points for skill transferrability factors, and (iii) a maximum of 600 points for either a provincial nomination or a qualifying offer of arranged employment; and
2. Where a candidate has an accompanying spouse or common-law partner: (i) a maximum of 460 points for the core human capital factors, (ii) a maximum of 40 points for accompanying spouse or common-law partner factors, (iii) a maximum of 100 points for skill transferability factors, and (iv) a maximum of 600 points for either a provincial nomination or a qualifying offer of arranged employment.

Core Human Capital Factors

Age

For a candidate who has no accompanying spouse or common-law partner, points for age are assigned as follows:

1. 0 points, if the candidate is 17 years of age or less;
2. 99 points, if the candidate is 18 years of age;
3. 105 points, if the candidate is 19 years of age;
4. 110 points, if the candidate is 20 to 29 years of age;
5. 105 points, if the candidate is 30 years of age;
6. 99 points, if the candidate is 31 years of age;
7. 94 points, if the candidate is 32 years of age;
8. 88 points, if the candidate is 33 years of age;
9. 83 points, if the candidate is 34 years of age;
10. 77 points, if the candidate is 35 years of age;
11. 72 points, if the candidate is 36 years of age;
12. 66 points, if the candidate is 37 years of age;
13. 61 points, if the candidate is 38 years of age;
14. 55 points, if the candidate is 39 years of age;
15. 50 points, if the candidate is 40 years of age;
16. 39 points, if the candidate is 41 years of age;
17. 28 points, if the candidate is 42 years of age;
18. 17 points, if the candidate is 43 years of age;
19. 6 points, if the candidate is 44 years of age; and
20. 0 points, if the candidate is 45 years of age or more.

For a candidate who has an accompanying spouse or common-law partner, points for age are assigned as follows:

1. 0 points, if the candidate is 17 years of age or less;
2. 90 points, if the candidate is 18 years of age;
3. 95 points, if the candidate is 19 years of age;
4. 100 points, if the candidate is 20 to 29 years of age;
5. 95 points, if the candidate is 30 years of age;
6. 90 points, if the candidate is 31 years of age;
7. 85 points, if the candidate is 32 years of age;
8. 80 points, if the candidate is 33 years of age;
9. 75 points, if the candidate is 34 years of age;
10. 70 points, if the candidate is 35 years of age;
11. 65 points, if the candidate is 36 years of age;
12. 60 points, if the candidate is 37 years of age;
13. 55 points, if the candidate is 38 years of age;
14. 50 points, if the candidate is 39 years of age;
15. 45 points, if the candidate is 40 years of age;
16. 35 points, if the candidate is 41 years of age;
17. 25 points, if the candidate is 42 years of age;
18. 15 points, if the candidate is 43 years of age;
19. 5 points, if the candidate is 44 years of age; and
20. 0 points, if the candidate is 45 years of age or more.

Level of Education

For a candidate who has no accompanying spouse or common-law partner, points for level of education are assigned as follows:

1. 0 points, if the candidate has less than a secondary school credential,
2. 30 points, if the candidate has a secondary school credential,
3. 90 points, if the candidate has a one-year post-secondary program credential,
4. 98 points, if the candidate has a two-year post-secondary program credential,
5. 120 points, if the candidate has a post-secondary program credential of three years or more,
6. 128 points, if the candidate has two or more post-secondary program credentials and at least one of them was issued at the completion of a post-secondary program of three years or more,
7. 135 points, if the candidate has a university-level credential at the master’s level or at the level of an entry-to-practice professional degree for an occupation listed in the National Occupational Classification (“NOC”) matrix at Skill level A for which licensing by a provincial regulatory body is required, and
8. 150 points, if the candidate has a university-level credential at the doctoral level.

For a candidate who has an accompanying spouse or common-law partner, points for level of education are assigned as follows:

1. 0 points, if the candidate has less than a secondary school credential;
2. 28 points, if the candidate has a secondary school credential;
3. 84 points, if the candidate has a one-year post-secondary program credential;
4. 91 points, if the candidate has a two-year post-secondary program credential;
5. 112 points, if the candidate has a post-secondary program credential of three years or more;
6. 119 points, if the candidate has two or more post-secondary program credentials and at least one of them was issued at the completion of a post-secondary program of three years or more;
7. 126 points, if the candidate has a university-level credential at the master’s level or an entry-to-practice professional degree for an occupation listed in the NOC matrix at Skill level A for which licensing by a provincial regulatory body is required; and
8. 140 points, if the candidate has a university-level credential at the doctoral level.

Education points will be assigned based on the highest level of education obtained.  However, in order for a candidate to be assigned points for education, the following must apply:

1. Their educational credentials must be Canadian educational credentials; or
2. They must have a valid educational credential equivalency assessment issued by a designated credential evaluation organization or institution.

Official Language Proficiency

Overview

Points will be assigned to candidates for proficiency in their first official language and for proficiency in their second official language.  As a result, they must indicate which of Canada’s two official languages (English or French) is their primary language and which is their secondary language.  In order to receive points for language, candidates must also have their proficiency assessed by a designated language testing organization or institution.

First Official Language

Points will be assigned for each language skill area (reading, writing, listening, and speaking) of the candidate’s first official language.  The calculation of points will be based on their benchmark level, as assessed under the Canadian Language Benchmarks or the Niveaux de compétence linguistique canadiens.

For a candidate who has no accompanying spouse or common-law partner, points will be assigned for each language skill area as follows:

1. 0 points for being assessed at less than level 4;
2. 6 points for being assessed at level 4 or 5;
3. 9 points for being assessed at level 6;
4. 17 points for being assessed at level 7;
5. 23 points for being assessed at level 8;
6. 31 points for being assessed at level 9; and
7. 34 points for being assessed at level 10 or higher.

The maximum number of points that may be assigned for all four language skill areas, taken together, in the candidate’s first official language is 136 points.

For a candidate who has an accompanying spouse or common-law partner, points will be assigned for each language skill area as follows:

1. 0 points for being assessed at less than level 4;
2. 6 points for being assessed at level 4 or 5;
3. 8 points for being assessed at level 6;
4. 16 points for being assessed at level 7;
5. 22 points for being assessed at level 8;
6. 29 points for being assessed at level 9; and
7. 32 points for being assessed at level 10 or higher.

The maximum number of points that may be assigned for all four language skill areas, taken together, in the candidate’s first official language is 128 points.

Second Official Language

Points will also be assigned for each language skill area (reading, writing, listening, and speaking) of the candidate’s second official language.  The calculation of points will again be based on their benchmark level, as assessed under the Canadian Language Benchmarks or the Niveaux de compétence linguistique canadiens.

Points will be assigned for each language skill area as follows:

1. 0 points for being assessed at level 4 or less;
2. 1 point for being assessed at level 5 or 6;
3. 3 points for being assessed at level 7 or 8; and
4. 6 points for being assessed at level 9 or higher.

For a candidate who has no accompanying spouse or common-law partner, the maximum number of points that may be assigned for all of the language skill areas, taken together, in the second official language is 24 points.  For a candidate who has an accompanying spouse or common-law partner, the maximum number of points that may be assigned for all of the language skill areas, taken together, in the second official language is 22 points.

Canadian Work Experience

Points will be assigned to candidates for Canadian work experience, which is defined as work experience that:

1. Is acquired by a candidate in Canada in one or more occupations listed in Skill Type 0 Management Occupations or Skill Level A or B of the National Occupational Classification matrix;
2. Consists of continuous full-time work experience or the full-time equivalent for part-time work experience; and
3. Is acquired within the 10-year period preceding the day on which points are assigned to the candidate.

Full-time employment means employment of at least 30 hours per week.  A period of work experience that exceeds full-time work in one occupation, or simultaneous periods of work experience in more than one full-time occupation, will be evaluated as a single period of full-time work experience in a single occupation.

Any period of employment during which the candidate was engaged in full-time study, engaged in self-employment, or engaged in unauthorized work may not be counted when calculating the period of work experience.  The candidate must also have had temporary resident status during their period of work experience and any period of full-time study or training.

The candidate must specify in their Expression of Interest the four-digit code in the NOC that corresponds to each of the occupations they have engaged in while accumulating their Canadian work experience.  They must also have performed the actions described in the lead statement for the occupation as set out in the occupational descriptions of the NOC, as well as a substantial number of the main duties described therein (including all essential duties).

For a candidate who has no accompanying spouse or common-law partner, points will be assigned for Canadian work experience as follows:

1. 0 points, for no Canadian work experience or less than one year of such experience;
2. 40 points, for one year of Canadian work experience;
3. 53 points, for two years of Canadian work experience;
4. 64 points, for three years of Canadian work experience;
5. 72 points, for four years of Canadian work experience; and
6. 80 points, for five or more years of Canadian work experience.

For a candidate who has an accompanying spouse or common-law partner, points will be assigned for Canadian work experience as follows:

1. 0 points, for no Canadian work experience or less than one year of such experience;
2. 35 points, for one year of Canadian work experience;
3. 46 points, for two years of Canadian work experience;
4. 56 points for three years of Canadian work experience;
5. 63 points, for four years of Canadian work experience; and
6. 70 points, for five or more years of Canadian work experience.

Accompanying Spouse or Common-law Partner

Points will also be assigned based on accompanying spouse or common-law partner factors, which consist of the following: (a) level of education, (b) official language proficiency; and (c) Canadian work experience.  Each of these factors is described below.

Level of Education

In order for a candidate to be assigned points for education of the accompanying spouse or common-law partner (if applicable), the following must apply:

1. Their educational credentials must be Canadian educational credentials; or
2. They must have a valid educational credential equivalency assessment issued by a designated credential evaluation organization or institution.

Points will be assigned for the level of education of the accompanying spouse or common law partner as follows:

1. 0 points, if the accompanying spouse or common-law partner has less than a secondary school credential;
2. 2 points, if the accompanying spouse or common-law partner has a secondary school credential;
3. 6 points, if the accompanying spouse or common-law partner has a one-year post-secondary program credential;
4. 7 points, if the accompanying spouse or common-law partner has a two-year post-secondary program credential;
5. 8 points, if the accompanying spouse or common-law partner has a post-secondary program credential of three years or more;
6. 9 points, if the accompanying spouse or common-law partner has two or more post-secondary program credentials and at least one of them was issued at the completion of a post-secondary program of three years or more;
7. 10 points, if the accompanying spouse or common-law partner has a university-level credential at the master’s level or at the level of an entry-to-practice professional degree for an occupation listed in the NOC matrix at Skill level A for which licensing by a provincial regulatory body is required; and
8. 10 points, if the accompanying spouse or common-law partner has a university-level credential at the doctoral level.

Official Language Proficiency

Points will be assigned for each language skill area (reading, writing, listening, and speaking) for the first official language (but not the second official language) of the accompanying spouse or common law partner.  The candidate must specify which official language is to be considered the first official language of the spouse or common-law partner.

The language proficiency of the accompanying spouse or common-law partner must be assessed by a designed organization or institution.  Points assigned for proficiency in English will be based on the results assessed according to the benchmarks set out in Canadian Language Benchmarks and the points assigned for proficiency in the French language are to be based on the results assessed according to the benchmarks set out in the Niveaux de compétence linguistique canadiens.

Points will be assigned to the candidate for the proficiency of their accompanying spouse or common-law partner, in each language skill area (reading, writing, listening and speaking), as follows:

1. 0 points for being assessed at level 4 or less;
2. 1 point for being assessed at level 5 or 6;
3. 3 points for being assessed at level 7 or 8; and
4. 5 points for being assessed at level 9 or higher.

The maximum number of points that may be assigned for all of the language skill areas, taken together, is 20 points.

Canadian Work Experience

Points will be assigned to the candidate, based on the Canadian work experience of the accompanying spouse or common-law partner, as follows:

1. 0 points, if the accompanying spouse or common-law partner has no Canadian work experience or less than one year of such experience;
2. 5 points, if the accompanying spouse or common-law partner has one year of Canadian work experience;
3. 7 points, if the accompanying spouse or common-law partner has two years of Canadian work experience;
4. 8 points, if the accompanying spouse or common-law partner has three years of Canadian work experience;
5. 9 points, if the accompanying spouse or common-law partner has four years of Canadian work experience; and
6. 10 points, if the accompanying spouse or common-law partner has five or more years of Canadian work experience.

In order for the candidate to be assigned points for the Canadian work experience of their accompanying spouse or common-law partner, the Expression of Interest must include the four-digit code in the NOC that corresponds to each of the occupations that the accompanying spouse or common-law partner has engaged in while accumulating their Canadian work experience.  The spouse or common-law partner also must have performed the actions described in the lead statement for the occupation as set out in the occupational descriptions of the NOC, as well as a substantial number of the main duties (including all essential duties).

Skill Transferability Factors

Combination of Level of Education and Official Language Proficiency

The points are to be assigned for a combination of a candidate’s level of education and language proficiency (in their first official language) as follows:

1. 0 points, if the candidate has a secondary school credential, regardless of their proficiency in their first official language;
2. 13 points, if the candidate has a post-secondary program credential of one or more years and is assessed overall in their first official language at level 7 on all language skill areas, with one or more areas assessed at less than level 9;
3. 25 points, if the candidate has a post-secondary program credential of one or more years and is assessed in their first official language at level 9 or higher on all language skill areas;
4. 25 points, if the candidate has two or more post-secondary program credentials, one of which was issued on completion of a post-secondary program of three years or more, and is assessed overall in their first official language at level 7 on all language skill areas, with one or more areas assessed at less than level 9; and
5. 50 points, if the candidate has two or more post-secondary program credentials, one of which was issued on completion of a post-secondary program of three years or more, and is assessed in their first official language at level 9 or higher on all language skill areas.

Points are to be assigned based on the highest level of post-secondary education obtained.

Combination of Level of Education and Canadian Work Experience

Points are to be assigned for a combination of a candidate’s level of education and Canadian work experience as follows:

1. 0 points, if the candidate has a secondary school credential, regardless of their Canadian work experience;
2. 13 points, if the candidate has a post-secondary program credential of one year or more and one year of Canadian work experience;
3. 25 points, if the candidate has a post-secondary program credential of one year or more and two or more years of Canadian work experience;
4. 25 points, if the candidate has two or more post-secondary program credentials, one of which was issued on completion of a post-secondary program of three years or more, and one year of Canadian work experience; and
5. 50 points, if the candidate has two or more post-secondary program credentials, one of which was issued on completion of a post-secondary program of three years or more, and two or more years of Canadian work experience.

The above points are to be assigned based on the highest level of post-secondary education obtained.

The points assigned for: (a) education plus language, and (b) education plus Canadian work experience may be combined.  However, the total number of points earned for these two factors combined may not exceed 50 points.

Combination of Foreign Work Experience and Official Language Proficiency

Points are to be assigned for a combination of a candidate’s foreign work experience and language proficiency (in their first official language) as follows:

1. 0 points, if the candidate has no foreign work experience, regardless of their proficiency in their first official language;
2. 13 points, if the candidate has one or two years of foreign work experience and is assessed overall in their first official language at level 7 on all language skill areas, with one or more areas assessed at less than level 9;
3. 25 points, if the candidate has one or two years of foreign work experience and is assessed in their first official language at level 9 or higher on all language skill areas ;
4. 25 points, if the candidate has three years of foreign work experience and is assessed overall in their first official language at level 7 on all language skill areas, with one or more areas assessed at less than level 9; and
5. 50 points, if the candidate has three years of foreign work experience and is assessed in their first official language at level 9 or higher on all language skill areas.

In order for the candidate to be assigned points for foreign work experience, the Expression of Interest must include the four-digit code in the NOC that corresponds to each of the occupations that the candidate has engaged in while accumulating their foreign work experience.  The candidate must also have performed the actions described in the lead statement for the occupation as set out in the occupational descriptions of the NOC, as well as a substantial number of the main duties (including all essential duties).

Combination of Canadian Work Experience and Foreign Work Experience

Points are to be assigned for a combination of a candidate’s Canadian work experience and foreign work experience as follows:

1. 0 points, if the candidate has no foreign work experience, regardless of their Canadian work experience;
2. 13 points, if the candidate has one or two years of foreign work experience and one year of Canadian work experience;
3. 25 points, if the candidate has one or two years of foreign work experience and two or more years of Canadian work experience;
4. 25 points, if the candidate has three or more years of foreign work experience and one year of Canadian work experience; and
5. 50 points, if the candidate has three or more years of foreign work experience and two or more years of Canadian work experience.

The points assigned for: (a) foreign work experience plus language, and (b) Canadian work experience plus foreign work experience may be combined.  However, the total number of points earned for these two factors combined may not exceed 50 points.

Combination of Certificate of Qualification and Official Language Proficiency

Points are to be assigned for a combination of a candidate’s certificate of qualification (in a trade occupation issued by a province) and language proficiency (in their first official language) as follows:

1. 25 points, if the candidate has a certificate of qualification and is assessed overall in their first official language under the Canadian Language Benchmarks or the Niveaux de competence linguistique canadiens at benchmark level 5 or higher on all language skill areas, with one or more areas assessed under level 7; and
2. 50 points, if the candidate has a certificate of qualification and is assessed in their first official language under the Canadian Language Benchmarks or the Niveaux de compétence linguistique canadiens at benchmark level 7 or higher on all language skill areas.

Maximum Overall Points for Skill Transferability Factors

The maximum number of points that may be assigned for all of the skill transferability factors taken together is 100 points.

Provincial Nomination under an Express Entry Stream

A total of 600 points may be assigned to a candidate if he or she is named in a Nomination Certificate issued by a PNP and the nomination has been: (a) verified by the relevant province, and (b) accepted by the candidate.  However, these points will be lost if the Nomination Certificate is revoked by the province that issued it, or if the candidate declines the nomination.  In addition, a candidate who receives 600 points for provincial nomination may not receive points for arranged employment.

Offer of Arranged Employment

A total of 600 points may be assigned to a candidate if they have a qualifying offer of arranged employment.  However, these points will be lost if the offer is revoked or ceases to be a qualifying offer of arranged employment. In addition, a candidate who receives 600 points for arranged employment may not receive points for provincial nomination.

The term “qualifying offer of arranged employment” means:

1. An offer of employment in a Skill Type 0, Skill Level A, or Skill Level B occupation, made by an employer (other than a blacklisted employer or an embassy, high commission or consulate in Canada) for full-time work in Canada that is non-seasonal, permanent, and supported by an LMIA;
2. An offer of employment, in a Skill Level B occupation eligible under the FST, that is made by up to two employers (other than a blacklisted employer or an embassy, high commission or consulate in Canada), for continuous, full-time work in Canada for at least one year and that is supported by an LMIA;
3. An offer of employment in a Skill Type 0, Skill Level A, or Skill Level B occupation, made to a candidate who is working in Canada for the employer listed on their work permit (other than a blacklisted employer or an embassy, high commission or consulate in Canada) for full-time work in Canada that is non-seasonal and permanent, if the work permit was issued on the basis of an LMIA; or
4. An offer of employment in a Skill Level B occupation eligible under the FST, that is made to a candidate by one or both employers listed on their work permit (other than a blacklisted employer or an embassy, high commission or consulate in Canada) for continuous, full-time work in Canada for at least one year in a skilled trade occupation that is in the same minor group set out in the NOC as the occupation specified on their work permit, if the work permit was issued on the basis of an LMIA.

Conclusion

Express Entry will add additional complex layer of bureaucracy to the FSW, CEC, and FST classes.  It will also significantly increase the level of uncertainty for candidates seeking permanent residence under these classes, since it will no longer be possible to reliably predict how long it will take for an applicant to be selected from the Express Entry pool.  Many applicants could be included in the Express Entry Pool only to have their Expressions of Interest cancelled one year later if they are not selected.

The Government of Canada has suggested a processing time of six months or less for candidates who are issued an ITA, which is a significant improvement over current processing times.  However, these improved processing times may not be worth the increased uncertainty that will result from the implementation of Express Entry.

We will be watching to see how these cases are processed once Express Entry begins on January 1, 2015.

As previously reported, on February 6, 2014, Citizenship and Immigration Minister (the “Minister”) Chris Alexander unveiled Bill C-24, the Strengthening Canadian Citizenship Act, which proposed significant amendments to the Canadian Citizenship Act (R.S.C., 1985, c. C-29).  On June 19, 2014, the Bill C-24 received Royal Assent and became law.

Bill C-24 updates the eligibility requirements for Canadian citizenship, strengthens security and fraud provisions, and amends provisions governing the processing of applications and the review of decisions.  The amendments to the eligibility requirements include:

1. Clarifying the meaning of being resident in Canada (physical presence rather than residence);
2. Modifying the period during which a permanent resident must reside in Canada before they may apply for citizenship (four years of physical presence in Canada during the six years preceding the filing of the application);
3. Expediting access to citizenship for persons who are serving in, or have served in, the Canadian Armed Forces;
4. Requiring that an applicant for citizenship demonstrate, in one of Canada’s official languages, knowledge of Canada and of the responsibilities and privileges of citizenship;
5. Specifying the age of which an applicant for citizenship must demonstrate the knowledge referred to above and must demonstrate an adequate knowledge of one of Canada’s official languages (changed from 18-54 to 18-64);
6. Requiring that an applicant meet any applicable requirement under the Income Tax Act (R.S.C., 1985, c. 1 (5th Supp.)) to file a an income tax return for the four taxation years during which they claim to have been resident in Canada;
7. Conferring citizenship on certain individuals and their descendants who may not have acquired citizenship under prior legislation;
8. Extending an exception to the first-generation limit to citizenship by descent to children born to or adopted abroad by parents who were themselves born to or adopted abroad by Crown servants; and
9. Requiring, for a grant of citizenship for an adopted person, that the adoption not have circumvented international adoption law.

The amendments to the security and fraud provisions include:

1. Expanding the prohibition against granting citizenship to include persons who are charged outside Canada for an offence that, if committed in Canada, would constitute an indictable offence under an Act of Parliament or who are serving a sentence outside Canada for such an offence;
2. Expanding the prohibition against granting citizenship to include persons who, while they were permanent residents, engaged in certain actions contrary to the national interest of Canada, and permanently barring those persons from acquiring citizenship;
3. Aligning the grounds related to security and organized criminality on which a person may be denied citizenship with those grounds in the Immigration and Refugee Protection Act (S.C. 2001, c. 27) and extending the period during which a person is barred from acquiring citizenship on that basis;
4. Expanding the prohibition against granting citizenship to include persons who, in the course of their application, misrepresent material facts and prohibiting new applications by those persons for a specified period;
5. Increasing the period during which a person is barred from applying for citizenship after having been convicted of certain offences;
6. Increasing the maximum penalties for offences related to citizenship, including fraud and trafficking in documents of citizenship;
7. Providing for the regulation of citizenship consultants;
8. Establishing a hybrid model for revoking a person’s citizenship in which the Minister will decide the majority of cases and the Federal Court will decide the cases related to inadmissibility based on security grounds, on grounds of violating human or international rights or on grounds of organized criminality;
9. Increasing the period during which a person is barred from applying for citizenship after their citizenship has been revoked;
10. Providing for the revocation of citizenship of dual citizens who, while they were Canadian citizens, engaged in certain actions contrary to the national interest of Canada, and permanently barring these individuals from reacquiring citizenship; and
11. Authorizing regulations to be made respecting the disclosure of information.

The amendments to the provisions governing the processing of applications and the review of decisions include:

1. Requiring that an application must be complete to be accepted for processing;
2. Expanding the grounds and period for the suspension of applications and providing for the circumstances in which applications may be treated as abandoned;
3. Limiting the role of citizenship judges in the decision-making process, subject to the Minister periodically exercising his or her power to continue the period of application of that limitation;
4. Giving the Minister the power to make regulations concerning the making and processing of applications;
5. Providing for the judicial review of any matter under the Act and permitting, in certain circumstances, further appeals to the Federal Court of Appeal; and
6. Transferring to the Minister the discretionary power to grant citizenship in special cases.

Bill C-24 also makes related amendments to the Federal Courts Act (R.S.C., 1985, c. F-7) and the Immigration and Refugee Protection Act.

As previously reported, on May 10, 2013, Citizenship and Immigration Canada (“CIC”) announced a proposed regulatory amendment to the definition of “dependent child.”  Once enacted, it would reduce the upper age limit for dependent children from “under 22” to “under 19” and would remove the exception for children 19 or older who are financially dependent on their parents and are enrolled in full-time studies.  However, it would not eliminate the exception for children who, regardless of age, have depended on their parents for financial support because of a mental or physical condition.

At the time of the initial announcement, CIC had proposed an effective date of January 1, 2014.  However, CIC did not actually announce the effective date of the proposed change until June 23, 2014.  According to this recent announcement, the new definition of dependent child became effective as of August 1, 2014.

Permanent residence applications that were already pending prior to August 1, 2014, will still be subject to the prior definition of dependent child.  However, most permanent residence applications filed on or after August 1, 2014, will be subject to the new definition.

The regulatory amendments contain transitional measures that allow certain applicants under multi-step permanent resident immigration programs, who: (1) were already in the immigration process on August 1, 2014; but (2) who had not yet submitted their application for permanent residence; to have their applications completed based on the previous definition of dependent child.  These transitional measures will apply to certain groups, including the following:

1. Provincial Nominee Program applicants;
2. Applicants who have applied under one of Quebec’s economic programs;
3. Live-in caregivers;
4. Refugees abroad and refugee claimants;
5. Quebec humanitarian cases;
6. Parents or grandparents whose sponsorship applications were received before November 5, 2011; and
7. Privately sponsored refugees whose sponsorship applications were received before October 18, 2012.

In addition, to ensure that children who meet the definition of dependent child at the first stage of a multi-step permanent resident immigration program remain eligible during immigration processing; the child’s age will be “locked in” at the first formal step of the immigration process.  For example, the age of a child whose parent applies to the Provincial Nominee Program will be “locked in” on the date that the application for nomination is made to the province.

The full text of the regulatory amendments appears here.