The word “Temporary Foreign Worker” seems to be a dirty word these days. Marred in scandal, the Temporary Foreign Worker Program (TFWP) can’t seem to make it a week without making headlines in the newspapers. Many complain that qualified Canadians are being locked out of jobs in favour of “low-wage” foreign workers. Many Canadian employers, however — particularly those in the engineering and construction industries — are suffering from ongoing labour shortages and, despite their best efforts, are unable to recruit qualified candidates to get the help they need.
In this guide, we will briefly:
1) Outline what options are available to Canadian engineering and construction firms seeking to hire or retain international candidates.
2) Provide a brief overview of the recent changes to the TFWP as they relate to Labour Market Impact Assessments (LMIA) and how they affect engineering and construction firms specifically.
3) Explain the importance of using knowledgeable and skilled professionals when preparing technical submissions to Employment and Social Development Canada (ESDC) and/or Citizenship and Immigration Canada (CIC).
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SECTION 1: OPTIONS
Before you can understand the different options available, it is first necessary to understand Labour Market Impact Assessments (LMIA), which up until June 20th, 2014 were known as Labour Market Opinions (LMO). By default, most Canadian work permits cannot be issued unless a positive LMIA has been issued to the employer by Employment and Social Development Canada (ESDC). The employer must file an application to ESDC explaining the nature of the job, as well as providing documentary evidence showing the efforts undertaken by the employer to recruit and/or train Canadians for the positions being applied for.
Most temporary foreign workers will need a positive LMIA. When assessing LMIA applications, ESDC first evaluates the objective data pertaining to the position being requested, such as job market statistics, unemployment rates in the local area and prevailing wages for the area in which the position is located. In total, ESDC now assesses over 20 different objective points of data in the assessment of a LMIA application. ESDC then evaluates the “subjective” information contained in the employer’s application, such as the proof of recruitment, the rationale for providing the offer of employment to a foreign national as well as assessing the contents of the Employer Transition Plan.
After assessing both the objective and subjective data against internal processing criteria, ESDC will only issue a positive LMIA if they believe that an offer of employment made to foreign workers will have a positive impact on the Canadian labour market by either:
1) Filling a labour shortage
2) Direct job creation for Canadians or retention of Canadian workers
3) Transfer of skills/knowledge to Canadians
Therefore, the employer must not only hit a home run with a very technical application known to be scrutinized at a microscopic level, but also satisfy the assessment criteria of the objective data, something often unknown and out of control of the employers.
In short, a positive Labour Market Impact Assessment is the authorization granted to a Canadian company that allows them to make an offer of employment to an international candidate. Unless exempt, international candidates cannot secure a Canadian work permit without a positive LMIA.
Canadian work permits are issued by Citizenship and Immigration Canada at either a Canadian visa office overseas, an inland processing centre, or at a Canadian Port of Entry. Canadian work permits can be broken down into three basic groups:
LMIA – Required
|Employer, Location and Occupation Specific||Employer, Location and Occupation Specific|
GROUP 1 – LMIA-Required
By default, a Canadian work permit is LMIA-Required unless an exemption is granted (discussed below). LMIA-Required work permits carry the following restrictions:
1) Employer Specific
2) Location Specific
3) Occupation Specific
This means that if Frank has a LMIA-Required work permit which lists his occupation as a Civil Engineer for ABC Engineering Inc. at their project in Fort. McMurray, he can only work in that role, for that company, at that location. If Frank is also a welder and is offered part-time work on the weekends, he cannot legally undertake that role, even if it’s for the same company at the same project site, unless a separate LMIA has been issued to cover Frank as a welder.
GROUP 2 – LMIA-Exempt
There are a number of Canadian work permits that can be issued without the need for a LMIA. Many of these exemptions exist in the depths of the Canadian immigration legislation, but for the purposes of this guide, these are the most relevant:
1) NAFTA Professionals (North American Free Trade Agreement)
2) ICT (Intra-Company Transferee)
3) Francophone Significant Benefit Program
Although these work permits are issued without the need for a LMIA, they still carry the same restrictions as a LMIA-Required work permit, namely that they are:
1) Employer Specific
2) Location Specific
3) Occupation Specific
Canada and the United States have a bilateral agreement that allows the free movement of certain professionals between the two countries for the purposes of work. In order to apply for a NAFTA work permit, applicants must have an offer of employment in a position listed on the “NAFTA Professional List,” located here. Applicants must also possess the “Minimum Education Requirements” as listed in the right-hand part of the table.
For the purposes of this guide, the following occupations can be found on the NAFTA list:
3) Land Surveyor
For example, if Sarah is a US Citizen, holds a B.Eng and is offered a full-time position with Allstar Engineering Inc. in Calgary, Alberta, she simply needs to bring her credentials, signed offer of employment and passport to a Canadian Port of Entry (land crossing, airport) and her work permit will be issued on the spot.
The Intra-Company Transferee provisions were created to allow international companies to temporarily transfer qualified employees to Canada. In order to qualify under these provisions, applicants must:
- Be currently employed by a multi-national company and seeking entry to work in Canada in a parent, subsidiary, branch, or affiliate of that enterprise.
- Be transferring to a position in an Executive, Senior Managerial, or Specialized Knowledge capacity.
- Have been employed continuously by the company that plans to transfer him or her, outside Canada in a similar full-time position for at lease one year in the three-year period immediately preceding the date of initial application.
For example, Ron has been employed for the past seven years as the Senior Construction Manager of A1 Construction Inc., a large multinational civil contracting company with a head office in Perth, Australia. A1 Construction also has a Canadian subsidiary based in Vancouver, BC, and is wanting to transfer Ron to Vancouver to begin overseeing the company’s new projects in Northern British Columbia. In this example, Ron is fully qualified to transfer to Canada under the ICT provisions and have his work permit issued without the need for a LMIA.
Francophone Significant Benefit Program:
The Francophone Significant Benefit Program (FSBP) was created to attract more Francophones to parts of Canada outside of Quebec. In order to be issued a work permit under this program, applicants must:
1) Have a full-time offer of employment from a Canadian company located outside Quebec in any NOC O, A, or B skill-level position.
2) Must be able to satisfy an officer that their habitual language of daily use of French. This can be done either through interview or through the submission of language test results (minimum of TEF Level 7).
If applicants meet these two requirements, they are eligible to have a work permit issued without the need for a positive LMIA from ESDC. The great thing about this program is that the job offer itself does not have to require French language ability. Initial work permits are issued for two years and can be renewed at inland CIC offices.
GROUP 3 – Open Work Permits
“Open Work Permits” are unrestricted. Holders may work for any employer, in any occupation, anywhere across Canada. Holders may hold more than one job and there are no requirements to report a change in employment to CIC.
There are dozens of different open work permits available, but most relevant to this guide are the following:
2) Post-Graduation Work Permit
International Experience Canada Work Permits:
Canada has bilateral agreements with numerous countries around the world which allows individuals, generally aged 18–35, to come to Canada and gain work experience. These agreements are administered jointly by International Experience Canada and Citizenship and Immigration Canada. Each country has different programs, but generally there are two main programs for most countries:
- Working Holiday
- Young Professionals
Working Holiday work permits are granted from anywhere between six months and two years, depending upon the applicant’s country of origin. Applicants from many countries are permitted to participate in IEC programs more than once, often allowing them to work in Canada for up to four years continuously without the need for a LMIA.
Young Professionals work permits are issued when an applicant possesses an offer of employment in Canada related to their post-secondary studies in their home country. The offer of employment is submitted to IEC for review. Upon approval, these too are issued without the need for a LMIA.
Post-Graduation Work Permits:
Students graduating from qualifying post-secondary programs across Canada are eligible to receive a work permit for the same duration as their studies, up to a maximum of three years. For engineering and construction firms, young international graduates present themselves as a mobile asset as they can work freely and are able to move in and amongst the organization without any hassle from CIC.
In general, a Canadian work permit cannot be issued to an international candidate (temporary foreign worker) without a positive Labour Market Impact Assessment having been issued to the employer. However, there are several exemptions from this requirement, such as NAFTA Professionals, Intra-Company Transferee provisions and the Francophone Significant Benefit Program. Nevertheless, LMIA-Required and LMIA-Exempt work permits carry with them the restrictions of being employer, location and occupation-specific. Any changes to the employment situation listed on the work permit necessitates that new applications are made to ESDC and CIC.
That said, CIC makes available several different types of unrestricted, open work permits such as the Working Holiday and the Post-Graduation Work Permit. Highly prized, these work permits provide the holders and their employers a much higher level of flexibility in terms of mobility.
SECTION 2: RECENT CHANGES
June 20th, 2014 marked the much-anticipated overhaul of the Temporary Foreign Worker Program. Amidst numerous, significant changes to the program, these are the most notable:
1) Secondary segmentation between High-Wage and Low-Wage Workers
2) Introduction of a 10-day Speed of Service for in-demand skilled trades positions and workers earning salaries in the top 10% of their province.
3) Increased application fee from $275 per position to $1,000 per position.
High-Wage vs. Low-Wage
Job positions remain segmented in Canada by their NOC Skill Level. Positions in levels 0, A and B are considered “Higher-Skilled,” whereas positions in levels C and D are considered “Lower-Skilled.” The TFWP program is therefore still split into two streams:
1) Stream for Higher-Skilled Occupations
2) Stream for Lower-Skilled Occupations
Each stream has its own application requirements, such as differences in advertising and job contracts. However, ESDC has now implemented a second level of segmentation to further differentiate between workers: High-Wage and Low-Wage.
High-Wage Workers are defined as those who are working in positions where the regionally-specific prevailing wage rate is at or above the provincial/territorial median wage rate, found here.
For example, and very relevant to engineering and construction companies, are the following two NOC Codes:
1) NOC 7521 – Heavy Equipment Operator
2) NOC 8412 – Oil and Gas Well Drilling and Related Workers
Heavy Equipment Operators for the Kootenay Region of British Columbia have a prevailing wage rate of $28.00/hr. As this figure is above the provincial median wage rate of $21.79, Heavy Equipment Operators in the Kootenay Region of BC are considered “High-Wage Workers,” regardless of the fact that the position itself is considered “Lower-Skilled.”
Conversely, there are some positions that are categorized as “Higher-Skilled,” based on their NOC Code but are now considered “Low-Wage” in some areas. For example, Administrative Assistants in the Vancouver Island and Coast Region of British Columbia have a prevailing wage rate of $20.51/hr. As this figure is below the provincial median wage rate of $21.79, Administrative Assistants in the Vancouver Island and Coast Region of BC are considered, “Low-Wage Workers,” regardless of the fact that the position itself is classified as, “Higher-Skilled.”
So what does this all mean for employers? How does this affect me?
1) If the position being offered to the temporary foreign worker is now classified as “High-Wage,” employers are required to submit a comprehensive Employer Transition Plan. This plan requires employers to provide a detailed outline of five additional activities that are above and beyond the minimum necessary advertising requirements. Employers must not only propose these activities to ESDC as part of the application, but also carry them out and report back to ESDC with the results of their efforts. ESDC will then perform a comparison between what was proposed and the actual result. This comparison will be evaluated if the employer seeks to re-apply for similar LMIAs in the future or is the subject of an ESDC audit.
2) If the position being offered to the temporary foreign worker is now classified as “Low-Wage,” employers are now subject to caps on the amount of low-wage workers who may be employed per worksite as the result of LMIAs being issued. For companies with more than 10 employees, this is currently set at 30% of the total workforce. This figure will decrease again to 20% in July, 2015 and finally settle at 10% by July, 2016.
10-Day Speed of Service
Employers can expect an expedited 10-day processing time of their LMIA applications when the following requirements are met:
1) The position being requested is located on the list of qualifying occupations, found here.
2) The position has a prevailing wage rate that is at or above the provincial/territorial median wage rate.
For example, NOC 7271 – Carpenters is on the list of qualifying occupations. The prevailing wage rate for Carpenters in the Edmonton Region of Alberta is set at $26.00, whereas the provincial median wage rate is $24.23. Therefore, under these conditions, employers can expect a 10-day processing time of their LMIA application.
Employers can expect a 10-day Speed of Service on their LMIA applications if the prevailing wage rate for the position is in the top 10% of wages earned by Canadians in the province/territory where the job is located. The chart showing the cutoffs for each province can be found here.
For example, the prevailing wage rate for a Engineering Manager in the Calgary Region of Alberta is $49.98, whereas the top 10% cutoff level for Alberta is set at $48.08. In this example, employers can expect a 10-day processing time of their LMIA application.
Note: It is irrelevant what the actual salary of the worker will be, it is solely dependent on the prevailing wage rate for the area.
Increased Application Fee
The application fee to apply for a Labour Market Impact Assessment has been raised from $275 per position being requested to $1,000 per position being requested.
For example, if an engineering company wishes to apply for a LMIA for 10 Mining Engineers, the amount due at the time of application is $10,000 CAD (10 positions requested x $1,000).
Note: ESDC does not issue refunds because of a negative decision.
How do these changes affect Engineering and Construction companies specifically?
1) The new differentiation between High-Wage and Low-Wage Workers will not cap the amount of certain “Lower-Skilled Positions,” such as Heavy Duty Equipment Operators and Oil and Gas Drillers, which can be present at a worksite.
2) The introduction of the Employer Transition Plan has serious implications for employers who intended on “bluffing” on their LMIA application. ESDC now requires employers to report back on the results of their proposed activities to hire and train Canadians.
3) The 10-Day Speed of Service will facilitate quicker entrance of qualified, skilled tradespeople into Canada to meet the immediate demands of certain projects.
4) The increase in application fees will bring about a more thorough and fair assessment process. Previously when there was no application fee, ESDC suffered a serious backlog of applications and in a rush to process them, often made unfair decisions on the outcome of a LMIA application. With a higher barrier to entry to access the TFWP, ESDC will have more resources to more accurately assess Labour Market Impact Assessment applications.
SECTION 3: FIND KNOWLEDGE AND EXPERIENCE
Engineering and Construction companies seeking to hire or retain international candidates often have more options than they realize. The Canadian immigration legislation and regulations are thick, and many opportunities present themselves in the less visited parts of the law. Furthermore, the level of accuracy demanded by agencies such as ESDC is extremely high. Even the slightest mistake in the contents of a LMIA application can provoke immediate rejection of the file. Therefore, the responsibility of navigating these waters should be left in the hands of skilled and knowledgeable professionals. Here’s why:
1) LMIA applications are technical pieces of business communication. They require not only proof of error-free, ESDC-compliant advertising, but also a careful analysis of the Canadian labour market. It is the responsibility of the employer, or their counsel, to effectively articulate the immediate business challenges of the organization. ESDC officers need to be satisfied that employers have not simply conducted “mock advertising” to satisfy the minimum necessary advertising requirements, but are in a position where making offers to international candidates is a necessary last resort. Being able to accurately communicate this position in an application requires a thorough, contextual understanding of the TFWP as well as familiarization with ESDC’s internal standard of review.
2) The process of hiring or retaining international candidates should be optimized. There are niche parts of the regulations that provide faster, more effective methods of bringing foreign workers to Canada. More often than not, there are exemptions from the need to obtain a LMIA which often results in bringing qualified workers to Canada in a matter of days/weeks rather than months.
3) The opportunity for error is high. If the linchpin of a $250 million dollar project is a specialized crew of workers arriving in Canada on a certain date, mistakes cannot be made. LMIAs and/or work permits should be issued without incident and it is too often the case that a lack of experience and knowledge can be attributed to costly delays in having the proper documentation issued.
4) We have an intimate knowledge of the policies and procedures used by each and every agency: ESDC, CIC and CBSA. We work with these applications and agencies on a daily basis and have seen a wide permutation of outcomes. We know where the roadblocks are, where the danger lies, and when it’s sometimes best to just sit and wait. Like an experienced mountain guide, we know the terrain well and have an ability to manage risk. Our responsibility is to ensure no mistakes are made; our expertise is derived from an ability to make optimal decisions based on the current conditions.
If you’re an engineering or construction company seeking to hire international staff or looking for ways to retain the ones you already have on your team, get in touch with a specialized and experienced professional before making decisions. Often, just a short conversation can set you down the correct path, free of danger and obstacles.