Applicants who have, or may have, a dual intent to seek status as a worker and then eventually as a permanent resident, must satisfy the officer that they have the ability and willingness to leave Canada at the end of the temporary period authorized under R183.
Types of applicants:
Permanent resident applicants
If a permanent resident applicant has met the definition of “entrepreneur” or “self-employed” (R97 to R101) and has been selected, they may be issued a work permit if there are compelling and urgent reasons to authorize the entry of the person before processing is complete. They must demonstrate that their admission to Canada to begin establishing or operating their business would generate significant economic, social or cultural benefits or opportunities for Canadian citizens or permanent residents pursuant to R205(a). It is expected that it would be a rare applicant who could satisfy an officer that their entry into Canada would provide a significant benefit before their eligibility for permanent residence has been assessed. It should be noted that any ‘early admission’ entrepreneurs must also satisfy the officer that they meet the requirements of A22(2), that they ‘will leave Canada by the end of the period authorized for their stay’, if their permanent residence application is ultimately refused. A work permit should not be granted to remedy concerns relating to processing times, particularly if serious questions such as source of funds remain outstanding.
Note: Special considerations apply when the application for a work permit comes from a foreign national who is being considered by a provincial or territorial government for nomination as a permanent resident. Provinces and territories sometimes identify foreign nationals as potential nominees, based on their intention to undertake business activities in their province or territory, and request they be issued a work permit to undertake entrepreneurial activity prior to the actual nomination of the foreign national. This is because they wish to see the potential nominee initiate their business plan as a demonstration of genuineness of intention, before actually nominating the person.
Note: Special consideration is also applicable to entrepreneurs and self-employed individuals destined to Quebec, where a Certificate of Selection for Quebec (CSQ) has been issued, but the foreign national is not yet a permanent resident. While Quebec does not have a Provincial/Territorial Nominee Program, special consideration is applicable on the basis of the Canada-Quebec Accord.
Temporary resident applicants
For applicants who do not intend to reside permanently in Canada, R205(a) may be difficult to satisfy if the profits and economic spin-offs generated by the enterprise do not remain in the Canadian economy. However, there will be situations where the business or the intended period of work is genuinely temporary, i.e., the applicant intends to leave Canada after starting a business, and either close the business (it being seasonal), or hire a Canadian to operate it. Significant benefit must still be demonstrated. However, benefit to a self-employed worker's Canadian clients may also be considered in this case, particularly if the worker is providing a unique service. If the applicant intends to start or buy a business where their own temporary status may be indefinite (i.e., permanent), officers should encourage the person to apply for permanent residence. There may also be self-employed workers who can demonstrate significant social or cultural benefits who intend to work in Canada for only a temporary period.
Work permit duration
The initial work permit can be issued for a maximum of two years, and subsequently extensions are possible only if a proof of selection by a province or territory is provided. It is expected that the province or territory will decide during this two-year period whether or not to nominate the person (see Agreements).
Note: It is not necessary that the application for permanent residence of the foreign national be received by CIC for the work permit to be issued. The letter from the province or territory is sufficient to trigger this Labour Market Impact Assessment (LMIA) exemption.
Long-term self-employed applicants
Applicants who have repeatedly been issued work permits over several years in the self-employed category should, in addition to satisfying the indicators of general economic stimulus, be able to provide evidence of the following:
- registration of their business as a legal entity in Canada;
- demonstration that the profits of the business remain predominantly in Canada or proof that other significant benefits have accrued to Canada;
- proof that all appropriate federal, provincial/territorial and local tax returns have been filed; and
- proof that they meet the temporary requirement of A22(2)—will leave Canada at the end of the period authorized for their stay.
Factors in considering “significant benefit”
In cases where significant benefit is being argued, officers may wish to consult organizations in Canada who can provide an opinion. For example, if an applicant wishes to be self-employed in the tourism industry, officers should contact the provincial tourism authority to determine whether the activity would be beneficial or actually impinge on Canadian service providers. Other sources of information and advice include local Canadian Chambers of Commerce, and Employment and Social Development Canada (who, while unable to formally confirm self-employment, should have knowledge of the local labour market situation). Examples of indicators of ‘significant benefit’ include: general economic stimulus (such as job creation, development in a regional or remote setting or expansion of export markets for Canadian products and services) and advancement of the Canadian industry (such as technological development, product
Sole or partial ownership
Irrespective of permanent residence requirements, ideally, the issuance of work permits for entrepreneurs should only be considered when the applicant controls at least 50% of the business in question. However, there may be cases where an individual owns a slightly smaller stake and will be coming to work in the business. In these cases, a partial owner with an ownership share of less than 50% would be required to apply for a work permit as an employee (rather than as an entrepreneur) and thus may require an LMIA. An employer-employee relationship must be established to issue an LMIA. A virtual, or having the appearance of an, employer-employee relationship is not a true reflection of a business operation. See the guidelines for assessing employer/employee relationships. ESDC cannot offer a formal LMIA in cases where there is no job offer or wages, but they can provide informal assistance to officers processing these applications, such as supplying information on known employers who have applied for an LMIA in the past, which can help verify whether the business is an existing concern in Canada, if there are existing employees, or whether there are similar businesses already in existence, etc.
Questions to consider in determining whether R205(a) is met (whatever percentage of the business in Canada is owned) are similar to the factors laid out in R203:
- Is the work likely to create a viable business that will benefit Canadian workers or provide economic stimulus?
- Does this worker have a particular background or skills that will improve the viability of the business?
Just because an individual owns shares in a business does NOT mean that they will meet the requirements of R205(a). A work permit may only be issued if significant benefit would result from the work of the applicant in Canada.
If there are multiple owners, generally only one owner would be eligible for a work permit pursuant to R205(a), unless exceptional circumstances can be demonstrated. Any further work permit applicants require a LMIA. While CIC does not want to discourage investment in Canada, these guidelines are intended to prevent transfer of minority shares solely for the purpose of obtaining a work permit.
- Date Modified: