Canada Announces Major Changes to the Intra-Company Transfer (ICT) Program

Effective October 3, 2024, the Immigration, Refugees and Citizenship Canada (IRCC) announced far-reaching changes to the Canadian Intra-Company Transfer (ICT) program under the General Agreement on Trade in Services (GATS) which will significantly curtail the ability of multinational corporations (MNCs) to transfer employees to Canada. Traditionally, the ICT category has been used to great effect by MNCs looking to transfer existing employees from a qualifying company entity outside of Canada to a Canadian affiliate. The IRCC has implemented the changes to the ICT program as part of its wider agenda to scale back temporary resident programs. 

What remains the same

The basic structure of the ICT program remains the same. ICT transferees must have been in continuous employment at the foreign enterprise of an MNC, in a similar position outside Canada, for at least 1 year (full-time) in the previous 3-year period from the date of initial application. Transferees must be transferred in the same capacity as an Executive, Senior Manager, or Specialized Knowledge worker. 

Changes to the ICT Program

1. Definition of a Multinational Corporation (MNC)

To qualify for an ICT, an existing MNC must have revenue-generating operations in at least 2 countries outside of Canada, or before establishing an entity in Canada. Previously, only 1 entity outside of Canada was required for an ICT. The IRCC has further instructed that an enterprise outside of Canada cannot become an MNC by using the ICT work permit category to establish its first foreign enterprise in Canada. Employers should be prepared to continuously demonstrate that the Canadian and foreign entities are revenue-generating.

2. 2-year experience standard for Specialized Knowledge workers

The new ICT policy reiterates the previous rule that a transferee must have been continuously employed in a similar position outside Canada, for at least 1 year in a full-time position within the last 3-year period. However, it further provides that Specialized Knowledge applicants with less than 2 years of experience with the foreign enterprise may only be considered to have advanced proprietary knowledge beneficial to the Canadian enterprise if they demonstrate comprehensive knowledge of a specific facet of the company, which may have been acquired within the short period of employment or through extensive work in the area, that is also accompanied by studies in the appropriate field or years of experience in the associated industry. The IRCC has referred to these instances as “rare” and has further stated that the employer must make the case that the employee possesses a high degree of both advanced proprietary knowledge and advanced expertise.

3. Available Position Abroad

Employers will now be required to demonstrate that the ICT will have an available position to return to when the Canadian assignment is complete.

4. Prevailing Wage Applicable to All Occupations

All occupations including Executives, Senior Managers, and Specialized Knowledge workers must now be paid the prevailing wage for their occupation and work location. Previously, only the wages of Specialized Knowledge workers were required to meet the wage floor.

The IRCC has further specified that Specialized Knowledge ICTs should receive compensation consistent with a specialist. It is expected that such a specialist would be receiving above-average compensation in their home country, therefore meeting the wage floor may not be sufficient for the application.

5. Location Restrictions

ICTs must work from the entity’s office where business operations are conducted. A residential location or shared office such as a WeWork will not be accepted. Virtual businesses using a mailing address in Canada are also not eligible to transfer ICTs.

The IRCC has further stated that if the work of the foreign national can be completed remotely, a reasonable explanation of why the foreign national must be in Canada will be required. The time difference between Canada and the foreign national’s location is not a justifiable reason for a transfer.

6. Duration Restrictions for Service Personnel

Service Personnel entering Canada for limited periods to assist Canadian clients will be limited to a 1-year work permit. The IRCC has reiterated that long-term work permits for more than 1 year should not be issued for service personnel living outside Canada whom the company wishes to parachute into a client site of the international company on an as-needed basis.

7. Documentation to Support the Creation of Benefits

Employers will need to demonstrate that the employee will provide significant social, economic, or cultural benefits, or opportunities for Canadian citizens or permanent residents within the validity period of the work permit being sought.

8. Bar on Seeking of De Facto Permanent Residence

ICT applicants must demonstrate an indication of the temporary nature of their stay to satisfy an officer that they will leave Canada upon completion of their work assignment, and are not attempting to become de facto permanent residents.

The IRCC has also noted that International Mobility Program categories, which include the ICT, are not intended as a means to transfer an enterprise’s general workforce to affiliated entities in Canada and are intended to support the movement of highly specialized workers, managers and executives to meet temporary business needs for a limited time.

What this means for our clients

Commercial Premises Required

The above-noted changes impact clients with remote operations in Canada. As provided, a shared office space or remote work arrangement will no longer be accepted. Clients should ensure that they have an active and established office space in Canada that will appear in an online search result and is tied to the company. Mailing addresses should correspond to the office address.

Limits on ‘Parking’ Employees in Canada

Foreign companies may also face challenges ‘parking’ employees in Canada where the employee has expiring status in a foreign country and needs to transfer to Canada. American employers especially may have difficulty sending foreign national employees to Canada for one year before having them return to the United States entity as the new ICT provisions demand proof that the employee’s position outside of Canada remains available to them. 

Multiple Entity Requirements

Companies with only one entity outside of Canada, no matter how legitimate and revenue-generating the foreign entity is, no longer qualify under the ICT regime. These companies should consider alternative work permit categories for their employees.

Higher Adjudication Standards

We further anticipate that all ICT applications filed, particularly at the consular level for visa-requiring employees, will be subject to enhanced scrutiny and evidentiary requirements. Clients should be prepared to respond to request letters from the IRCC asking for further documentation. Specialized Knowledge applications will receive the most scrutiny, particularly where the employee has less than 2 years of company experience. 

Limitations on Transfers of Employees Looking to Simply Relocate to Canada for Personal Reasons

Clients should also review employee requests for transfers to Canada closely. Apart from the new standards being applied, the IRCC is reviewing applications to ensure foreign nationals are not using the program for personal long-term transfers to Canada to leverage for a permanent residence application.