Key Personnel

“Key personnel” is defined in CETA as (a) business visitors for investment purposes; (b) investors; and (c) ICTs. The following provisions apply to all key personnel:

Negative list: Key personnel are allowed to enter and remain in Canada temporarily subject to the reservations and exceptions listed in Annex 10-B.

Canada has not yet included any reservations or restrictions. Some EU states have included reservations and exceptions for key personnel and short-term business visitors by not recognizing one of the facilitated mobility categories created by CETA, or by requiring additional requirements such as an economic needs test for some work permit categories, or the work permit exemption for the short-term business visitor category. It does not appear that Canada will assess CETA applications from citizens of those EU states any differently.

  • No limitations or cap on applications: There are no limitations on the total number of key personnel who will be allowed temporary entry to Canada, in the form of a numerical restriction or an economic needs test.
  • Work permit exemption for business visitors for investment purposes: Business visitors entering Canada for investment purposes will be admitted temporarily without a work permit or any other similar prior approval.
  • LMIA-exemption for temporary employment: CETA allows for temporary employment of ICTs and investors in Canada on LMIA-exempt work permits.

Business Visitors for Investment Purposes

A “business visitor for investment purposes” is defined in CETA as an employee in a managerial or specialist position with responsibility for setting up an enterprise in Canada, but who will not engage in direct transactions with the general public and will not receive remuneration from a source located in Canada. Business visitors for investment purposes are permitted to work in Canada without a work permit, unlike ICTs and investors.

IRCC’s PDIs about CETA instruct officers to assess applicants under the general business visitor provisions in subsection 186(a) of IRPR first, and to only refer to the business visitor provisions in CETA when an applicant will be performing activities in Canada not contemplated by IRPR.

Additional details pertaining to business visitors for investment purposes:

  • Place of application: Business visitors for investment purposes may apply for admission to Canada at the port of entry if they are exempt from the requirement to obtain a TRV. Otherwise, they must submit their application to a Canadian visa office abroad.
  • Application fees: There is no cost to apply for admission to Canada as a business visitor at the port of entry. Applicants who require a TRV to enter Canada, however, are required to pay a processing fee when they apply for their visa before entering Canada.
  • Permissible length of stay: The maximum duration for business visitors for investment purposes is 90 days in a six-month period. This limitation only applies to applicants who do not qualify under the general business visitor rules in sections 186(a) or 187 of IRPR.
  • Entry/re-entry: Under CETA, business visitors may enter Canada multiple times in relation to the same project during a 90-day period every six months. It is recommended that applicants who will be making a number of regular trips to Canada ask to be documented on a visitor record to facilitate their subsequent entries.

Intra-Corporate Transferees

Eligibility as an ICT is based on the definition of ICT in CETA, and requires the applicant to:

  • have been employed by, or a partner in, an enterprise based in an EU member state for at least one year;
  • be temporarily transferred to a related enterprise (a subsidiary, branch or parent company) in Canada; and
  • qualify as one of the following categories – senior personnel, a specialist or a graduate trainee.

Additional eligibility criteria for each ICT category available under CETA (senior personnel, specialist, graduate trainee) are summarized below.

An “intra-corporate transferee” defined in the ICT provisions of Chapter 10 do not differ greatly from the requirements for the ICT work permit categories already available under the International Mobility Program (subsections 204(a) and 205(a) of IRPR). The biggest difference is the inclusion of a subcategory for graduate trainees. CETA also creates a new open work permit categories for spouses of ICTs.

  • Place of application: ICTs may apply for a work permit at the port of entry if they do not require a TRV. If they do, their initial application must be submitted to a Canadian visa office abroad. Extension applications can be made within Canada if an applicant satisfies the conditions in section 199 of IRPR.
  • Permissible length of stay: Senior personnel and specialists can be admitted to Canada initially for the lesser of three years or the length of the contract. CETA contemplates a possible discretionary extension of up to 18 months, for a maximum possible duration of four-and-a-half years. Graduate trainees are permitted to remain in Canada for the lesser of one year or the length of the contract. Graduate trainee work permits cannot be extended.
  • LMIA exemption: ICTs require a work permit, but are exempt from the LMIA requirement under subsection 204(a) of IRPR and LMIA exemption code T44. LMIA exemption code T45 applies to the open work permits available to spouses of ICTs.

Categories of Intra-Corporate Transferees

Senior Personnel

The rules for senior personnel under CETA mirror the “executive capacity” definition in NAFTA and the rules governing senior manager intra-company transferees in section 205(a) of IRPR and LMIA exemption code C12. CETA defines “senior personnel” as natural persons working in a senior position within an enterprise who:

  1. primarily direct the management or the enterprise itself, or a department or sub-division of the enterprise; and
  2. exercise wide latitude in decision making, which may include having the authority to personally hire and terminate or make other personnel decisions (such as promotion or leave authorizations); and
    1. receive only general supervision or direction from more senior executives, the board of directors, or shareholders or their equivalent; or
    2. supervise and control the work of other supervisory, professional or managerial employees and exercise discretionary authority over day-to-day operations.

Specialists

The rules for specialists under CETA generally mirror the provisions governing “specialized knowledge” personnel under NAFTA. They are, however, less stringent than the test that applies to specialized knowledge workers under the C12 LMIA exemption. CETA defines “specialists” as employees of an enterprise who possess:

  1. uncommon knowledge of the enterprise's products or services and their application in international markets; or
  2. an advanced level of expertise or knowledge of the enterprise's processes and procedures such as its production, research equipment, techniques, or management.

In assessing an applicant’s expertise or knowledge, officers must consider whether the applicant’s abilities are unusual and different from those generally found in a particular industry and that cannot be easily transferred to another person in the short-term. A specialist’s abilities should have been obtained through specific academic qualifications or extensive experience with the enterprise.

The threshold for ICT specialists under CETA is lower than the test used to assess ICTs with specialized knowledge under section 205(a) of IRPR (LMIA-exemption code C12), because an applicant under CETA is not required to have both a high degree of proprietary knowledge and advanced expertise.

Graduate Trainees

The graduate trainee category is available to individuals who:

  1. hold a university degree; and
  2. are temporarily transferred to an enterprise in Canada for career development purposes, or to obtain training in business techniques or methods.

Spouses of Intra-Corporate Transferees

Spouses of CETA ICTs (except ICTs from the UK and Denmark) are eligible for an open work permit for the same duration as their spouse’s work permit. No similar rule is found in NAFTA, but is consistent with language in more recent FTAs like the Canada-Korea FTA (CKFTA). Unlike the CKFTA, however, CETA does not specifically authorize spousal work permits for non-ICT work permit categories.

Spouses of ICTs (and holders of other CETA work permits) may also qualify for an open work permit as the spouse of a skilled worker (under LMIA exemption code C41). IRCC’s PDIs indicate that spouses of ICTs should be processed under whichever spousal work permit category is most favourable.

Investors

The investor provisions in CETA are similar to those in section 6 of NAFTA.

CETA defines an “investor” as someone who:

  1. will establish, develop, or administer the operation of an investment in a capacity that is supervisory or executive;
  2. is the investor; or
  3. is employed by the enterprise that has committed or is in the process of committing a substantial amount of capital.

By definition, investors include both individuals who themselves have invested, or are in the process of investing in the operation of a foreign entity in Canada, or key employees of enterprises who have invested or are in the process of investing in the operation of a foreign entity within Canada.

Unlike NAFTA and CKFTA, the CETA definition of investor does not include applicants who will “provide advice or key technical services to the operation” of an investment or applicants with only “essential skills”.

  • Place of application: By regulation, investors may apply for a work permit at the port of entry if they are exempt from the requirement to obtain a TRV. However, due to the complexity of investor work permit applications, IRCC recommends that these be submitted to a visa office for adjudication prior to entry. An investor who makes their application at the port of entry risks refusal, or may be turned away and counselled to apply at a visa office. Extension applications can be made from within Canada if an applicant satisfies the conditions in section 199 of IRPR.
  • Permissible length of stay: Investors are eligible for an initial work permit of one year, with possible extensions at the discretion of the officer assessing the application.
  • LMIA exemption: Investors require a work permit, but are exempt from the LMIA requirement under subsection 204(a) of IRPR and LMIA exemption code T46.

Persons applying for investor status under NAFTA are required to complete an Application for Trader/Investor status (IMM 5321) in addition to the other work permit application forms required for a visa office work permit application. At the time of writing, IMM5321 had not yet been updated to refer to CETA, but it is nevertheless recommended that it be used and adapted as necessary.

Criteria for Investors

IRCC’s PDIs instruct that CETA investor applications should be assessed using the investor guidelines found in NAFTA. This guidance is modelled on IRCC’s instructions for NAFTA investors:

  • Citizenship/Nationality: Not only must an investor be a citizen of an EU member state, the enterprise in Canada to which the applicant is coming must also have EU nationality. This means a majority of the individual or corporate owners of the entity established in Canada must hold citizenship in an EU member state. The applicant should have a controlling interest in the enterprise. A letter attesting to ownership from a corporate secretary or lawyer may be used to determine nationality. Nationality is indicated by ownership, not place of incorporation of an enterprise.
  • Investment: CETA does not define “investment”. IRCC’s operational guidance on NAFTA is instructive. Tor relevant parts from IRCC’s operational guidance are reproduced below (see here, at section 6.3 for discussion of assessing investments under NAFTA.: 
    • Investment involves placing funds or other capital assets at risk in the commercial sense in the hope of generating a profit or a return on the funds risked. If the funds are not subject to partial or total loss if investment fortunes reverse, it is not an investment which can be used to support investor status.
    • The applicant must be close to the start of actual business operations, not merely in the stage of signing contracts (which may be broken) or scouting for suitable locations and property. The investment funds must be irrevocably committed to the business.
    • Whether an investment has or will be made, the applicant must demonstrate prior or present possession and control of the funds or other capital assets.
    • Officers should assess the nature of the transaction to determine whether a particular financial arrangement may be considered an investment for the purpose of investor status. Following are some factors which may be considered in making a determination:
  • Funds: Mere possession of uncommitted funds in a bank account would not qualify, whereas, a reasonable amount of cash held in what is clearly a business bank account or similar fund used for routine business operations may be counted as investment funds.
  • Indebtedness:Mortgage debt or commercial loans secured by the enterprise’s assets cannot count toward the investment as there is no requisite element of risk. Loans secured by the applicant’s own personal assets, such as a second mortgage on a home, or unsecured loans, such as a loan on the applicant’s personal signature, may be included since the applicant risks the funds in the event of business failure.
  • Lease/rent payments: Payments in the form of leases or rents for property or equipment may be calculated toward the investment in an amount limited to the funds devoted to that item in any one month. However, the market value of the leased equipment is not representative of the investment and neither is the annual rental cost (unless it has been paid in advance) as these rents are generally paid from the current earnings of the business.
  • Goods/equipment as investment: The amount spent for purchase of equipment and for inventory on hand may be calculated in the investment total. The value of goods or equipment transferred to Canada (such as factory machinery shipped to Canada to start or enlarge a plant) is considered an investment provided the applicant can demonstrate that the goods or machinery will be put, or are being put, to use in an ongoing commercial enterprise.
  • Substantial Amount of Capital: CETA does not set a threshold for what constitutes a “substantial amount of capital”. Again, IRCC’s operational guidance on NAFTA is instructive (see here, at section 6.3, for the discussion of assessing investments under NAFTA):
    • There is no minimum dollar figure established for meeting the requirement of “substantial” investment. Substantiality is normally determined by using a “proportionality test” in which the amount invested is weighed against one of the following factors:
  • the total value of the particular enterprise in question (determining proportion is a largely straightforward calculation involving the weighing of evidence of the actual value of an established business, i.e., purchase price or tax valuation, against the evidence of the amount invested by the applicant); or
  • the amount normally considered necessary to establish a viable enterprise of the nature contemplated. (This may be a less straightforward calculation. Officers will have to base the decision on reliable information on the Canadian business scene to determine whether the amount of the intended investment is reasonable for the type of business involved. Letters from chambers of commerce or statistics from trade associations may be reliable for this purpose.)
    • Only the amount already invested or irrevocably committed for investment can be considered in determining substantiality.
    • The investment must be significantly proportional to the total investment. The total investment is the cost of an established business or money needed to establish a business. In businesses requiring smaller amounts of total investment, the investor must contribute a very high percentage of the total investment, whereas in businesses of larger total investment, the percentage of the investment may be much less.
    • The enterprise must be a real and active commercial or entrepreneurial undertaking which operates to produce some service or commodity for profit. It cannot be a paper organization or an idle, speculative investment held for potential appreciation in value. For instance, passive investment in developed or undeveloped real estate or stocks does not qualify. (Evidence that an applicant intends and has the ability to invest additional funds in the future in an enterprise may demonstrate that the business is, or will be, a viable commercial enterprise. A plan for future investment, expansion, and/or development is significant in meeting this criterion.)
    • The objective of investor status is to promote productive investment in Canada. Therefore, an applicant is not entitled to this status if the investment, even if substantial, will return only enough income to provide a living for the applicant and family.
    • There are various ways to assist in determining whether an enterprise is marginal, in the sense of only providing a livelihood for the applicant. For instance, an applicant may show that the investment will expand job opportunities locally or that it is adequate to ensure that the applicant’s primary function will not be that of a skilled or unskilled labourer. If the applicant has substantial income from other sources and does not rely on the investment enterprise to provide a living, the investment may be one of risk and not one of providing a mere livelihood.

Criteria for Bringing an Employee to Canada

CETA does not have specific requirements for bringing employees to Canada under the investor category, but IRCC’s PDIs offer guidance for making this assessment for investor applications under NAFTA (See here, at section 6.4 for IRCC’s guidance on bringing an employee to Canada under NAFTA). These guidelines are instructive for interpreting the investor provisions of CETA and suggest that the criteria below will apply to employers and employees.

Criteria applicable to the employer

The nationality requirement must be satisfied to bring an employee to Canada in investor status such that:

  • the prospective employer in Canada must be a citizen of an EU member state  who is maintaining investor status in Canada; or
  • if the prospective employer is an enterprise, majority ownership of the enterprise must be held by citizens of an EU member state who, if not residing in an EU member state, are maintaining investor status in Canada.

A citizen of an EU member state who is a permanent resident of Canada will not qualify to bring an employee into Canada under investor status.

Shares of an enterprise owned by a citizen of an EU member state who is a permanent resident of Canada cannot be considered in determining majority ownership to qualify the enterprise for bringing in an employee as an investor.

Criteria applicable to the employee

The applicant must be a citizen of an EU member state who will serve in a supervisory or executive capacity. IRCC”s guidance for making this assessment in the context of a NAFTA investor states that:

The supervisory or executive element of the position is a primary function. The supervisor is primarily responsible for directing, controlling and guiding subordinate employees and does not routinely engage in hands-on activities. (A first line supervisor would not, as a general rule, qualify). An executive or manager is in a position in the organization with significant policy authority.

Indicators of supervisory or executive or managerial capacity are:

  • Position title
  • Place in the organizational structure
  • Job duties
  • Degree of ultimate control and responsibility over operations
  • Number and skill levels of immediately subordinate employees over whom supervision is exercised
  • Level of pay
  • Qualifying executive or supervisory experience

The size of the Canadian office will dictate which indicators are more relevant.

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