Can Canada do better at retaining skilled workers under Express Entry? An Open Letter to the Minister of Immigration

April 3rd 2020

Dear Minister Mendicino,

Re: Self-Employed Applicants in Canada Ineligible for Permanent Residence

We are immigration lawyers based in Ottawa and we are writing to express our concern that self-employed people including professionals such as doctors and dentists as well as owner operators, including company founder executives CEOs, are essentially ineligible for permanent residence under Express Entry as their Canadian work experience does not provide them with any comprehensive ranking system (”CRS”) points. We are writing to request that you:

  1. Amend the definition of “Canadian Work Experience” in the Ministerial Instructions for Express Entry; and/or
  2. Create a new PR program for these self-employed professionals and owner-operators; and/or
  3. Allocate more points for Qualifying Offers of Arranged Employment; and/or
  4. Amend the allocation of points for age to lessen the disadvantage to those who are older and have more experience; and
  5. Amend the allocation of points for education to allow for an equivalency of points for education and experience as is done in the United States (3-for-1 rule codified at 8 C.F.R. §214.2 (h)(4)(iii)(D)(5)); and 
  6. Provide for some means of providing points for vocational training, perhaps in the form of equivalent points for experience.

Self-employed work experience in Canada is not eligible under the Canadian Experience Class definition of work described at IRPR s. 87.1(3)(b). Though self-employed work experience in Canada is not excluded under the Federal Skilled Worker Program as described in IRPR s. 80, it is effectively excluded as one cannot obtain any CRS points for self-employed work experience obtained while in Canada under the Express Entry program. 

Under the Comprehensive Ranking System (CRS) Criteria, Canadian work experience can result in up to 180 points: up to 70 points under the Core / Human Capital Factors, up to 10 points under the Spouse or Common-Law partner factors, and up to 100 points under the Skill Transferability Factors. Applicants who obtained self-employed work experience in Canada are ineligible for any of these points. Many applicants require the points derived from their Canadian work experience in order to qualify. 

Under the Ministerial Instructions Respecting the Express Entry System, the points assigned for the Canadian Work Experience Core Human Capital factors described at MI s. 15(7)(b) excludes self-employed work experience:

Canadian work experience

(3) For the purposes of this section, Canadian work experience is work experience that

(a) is acquired by a foreign national 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;

(b) consists of full-time work experience, or the full-time equivalent for part-time work experience, with one or more employers;

(c) is acquired within the 10-year period preceding the day on which points are assigned to the foreign national under subsection (1); and

(d) is remunerated by the payment of wages or a commission.

Work experience — requirements

(7) For the purposes of this section,

(a) a period of employment during which the foreign national was engaged in full-time study is not to be included in calculating a period of work experience;

(b) a period of self-employment or unauthorized work is not to be included in calculating a period of work experience;

(c) the foreign national must have had temporary resident status during their period of work experience and any period of full-time study or training; and

(d) the full-time equivalent for part-time work experience is 30 hours of work per week.

The points assigned under the Spouse or Common-Law partner factors described at MI s. 19(8)(b) also exclude work performed while self-employed in Canada. Self-Employed Canadian work experience is also excluded from the points under the Skill Transferability Factors as per MI s.24(3).

The Ministerial Instructions Respecting the Express Entry System also excludes Canadian work experience from the definition of Foreign Work Experience, as foreign work experience must expressly have been acquired outside of Canada as per MI s. 25(1)(a):

25 (1) For the purposes of sections 23 and 24, foreign work experience is work experience that

  • (a) is acquired by a foreign national outside 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;
  • (b) consists of full-time work experience, or the full-time equivalent for part-time work experience, with one or more employers;
  • (c) is acquired within the 10-year period preceding the day on which points are assigned to the foreign national under section 23 or subsection 24(1); and
  • (d) is remunerated by the payment of wages or a commission.

Though some self-employed persons are able to apply under Express Entry by making the argument that they should be considered employees based on a number of factors considered by the CRA in making these assessments, often this argument cannot be made as they are not employees, and are in fact self-employed. In their Program Delivery Instructions on Canadian Experience Class Selection Criteria – Qualifying work experience, the factors to consider in assessing self-employment are explained by IRCC as follows:

Factors to consider – employee vs. self-employed

In determining whether an applicant under the CEC was an employee or a self-employed individual during their period of qualifying work experience in Canada, CIC officers should consider factors such as:

  • the degree of the worker’s control or autonomy in terms of how and when work is performed, and the method(s) used to do the work;
  • whether the worker owns and/or provides tools and equipment to accomplish the work;
  • the degree to which the worker has to perform the work personally and whether the worker has the option of subcontracting work or hiring others to help and assist with completing the work;
  • the degree of financial risk assumed by the worker, including whether the worker is required to make any investment in order to complete the work or provide the service and whether the worker is free to make business decisions that affect his/her ability to realize a profit or incur a loss (as opposed to the opportunity to earn commissions or other productivity bonuses); and
  • any other relevant factors, such as written contracts.

Additional details regarding each of the above factors, and indicators that can be used when determining whether an individual is an employee or self-employed, are available in the Employee or Self-employed? CRA guide.

Determination of the degree of control can be difficult when examining the employment of professionals such as engineers, physicians and information technology consultants. Given their expertise and specialized training, they may need little or no specific direction in their daily activities. When examining the factor of control, it is necessary to focus on both the payer’s control over the worker’s daily activities, and the payer’s influence over the worker. There are also certain occupations in which individuals may be either self-employed or in an employer-employee relationship depending on the specific circumstances of their employment. More information on the determination of a worker’s employment status for a number of specific employment categories is available on the CRA website.

Generally speaking, consultants/contractors are considered to be self-employed individuals in a “contract for services” business relationship. For example, independent contractors in the financial, real estate and business service industries. Similarly, individuals who hold substantial ownership and/or exercise management control of a business for which they are also employed are generally considered to be self-employed.

For example, a physician employed  under a fee-for-service arrangement in Canada is deemed to be self-employed because their wages are derived from a provincial health care program. The more precise way to categorize this remuneration model would be to categorize their work as a public servant employed by and whose service is directed by the clinic or hospital where they work, and is wholly dependent  on public funding from provincial ministries of health. Most physicians in Canada deliver healthcare services to Canadians under provincially funded healthcare systems administered by provincial ministries of health and work in specialty clinics (i.e. cardiology, colonoscopy, ophthalmology.), doctors’ offices, hospitals, long-term care facilities and on university campuses. As you are aware, there are limited private healthcare services offered by doctors across Canada.  

For the purposes of determining Canadian work experience points under Express Entry and eligibility under CEC, physicians, consultants, contractors, and owner-operators are considered by IRCC to be self-employed individuals. This does not align with Canada’s need for these foreign workers on a permanent basis and their demonstrated benefit to Canadians and the Canadian economy. Additionally, as the gig economy, is the current and emerging context in which people earn an income in today’s global work environment, the absence of points for self-employment under the Express Entry system is outdated and not aligned with the current labour market realities.

The failure to provide points for self-employed work experience in Canada under Express Entry results in candidates having insufficient points to be granted an invitation to apply or to qualify under one of the programs. Self-employed applicants would also not meet the Job Offer criteria under the OINP Foreign Worker with Job Offer stream as they would be considered as Employees who have ownership in the business.

Most applicants with self-employed work experience in Canada also do not qualify under the Federal  Self-Employed stream, as they do not have the relevant work experience, such as taking part in a cultural activity or activities at a world-class level; being self-employed in cultural activities or athletics; or experience managing a farm. 

In September 2017, C11 was expanded to include entrepreneurs and self-employed candidates seeking temporary entry to operate a business which will generate significant economic, social or cultural benefits or opportunities for Canadians or permanent residents. However, there appears to be no path to permanent residence for these entrepreneurs and self-employed candidates.

Additionally, the failure to include self-employed work in Canada results in foreign nationals educated in Canada, whose only experience was obtained in Canada, from being ineligible under both the Canadian Experience Class and the Federal Skilled Worker program. These excluded foreign nationals include professionals, such as dentists, and the founders of start-ups based in Canada.

Our hope is that IRCC is aware of the aforementioned gap in the Express Entry program and that it is working to resolve this gap to provide a pathway to permanent residence for the self-employed professionals, entrepreneurs, and owner-operators who bring significant benefit to Canada.

Yours truly,

 

Tamara Mosher-Kuczer
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Tamara Mosher-Kuczer
Member, Law Society of Ontario

Betsy R. Kane
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Betsy Rachel Kane
Certified by the Law Society of Ontario as Specialist
in Citizenship & Immigration Law