Last month saw a significant change for foreign manufacturers that regularly send technicians with proprietary knowledge to service machinery in Canada. On May 21 2015, CIC expanded their interpretation of Regulation 205(a), the significant benefit to Canada provision, to permit authorized manufacturer personnel (entering Canada for 30 days or less to service industrial or commercial equipment), to apply for work permits without the need for a Labour Market Impact Assessment (LMIA). The relaxing of this rule means that foreign manufacturers with ongoing contractual obligations to service machinery in Canada will no longer have to plan well in advance. The new rules will allow foreign manufacturers to rapidly deploy technical personnel to Canada to repair or upgrade machinery no longer covered by after-sales warranty provisions.
This new rule is a welcome relief for foreign manufacturers who have been broadsided by hefty LMIA processing fees and exacting employer compliance obligations. Surely, ESDC also felt the pain of having to process these cases that are often filed on short notice, especially when Canadian operations are impacted by the delays in securing a LMIA.
Under the new interpretation of this provision, employers now simply have to file the Offer of Employment – IMM5802 form and pay the $230 CDN dollar compliance fee in advance of the foreign worker’s arrival in Canada. Proof of filing the IMM5802 and the payment receipt needs to be carried by the foreign worker entering Canada. We recommend that employers ensure that their employees also carry a letter confirming their employment outside of Canada, as well as a letter of invitation from the Canadian customer. The letter of invitation should confirm that the visit pertains to machinery purchased from a foreign manufacturer that is no longer covered by warranty. It is also helpful for the Canadian customer to reference the impact on the Canadian workforce or the Canadian public, where applicable, in the event of delays in the repair or maintenance of the machinery (e.g. halting of production lines, temporary lay-offs, breach of contracts and associated penalties, impact on Canadians). A copy of the sales contract and/or purchase order, including reference to the warranty provisions or extended maintenance agreements, should also be carried by the foreign worker or sent to the port of entry in advance of the worker’s arrival in Canada.
Often, in the past, when there was an emergency requirement to service machinery that was out-of-warranty, foreign manufacturers were required to make the case to CBSA for entry under the Emergency Service Personnel provision. Now that the emergency service provision has been broadened, there will be tangible economic benefits for Canadian companies and their workforce who will no longer have to wait or risk operational repercussions while a LMIA application is processed.
In my May 2015 blog, I said I would discuss how to facilitate the movement of foreign workers into Canada while an employer was undergoing an ESDC Employer Compliance Review (ECR) or inspection. One of the best methods of ensuring that foreign nationals can enter Canada during this audit process is to request processing under the emergency service provision. Of course, the employer would have to demonstrate a bona fide urgency to make use of this provision.
Though the government has now facilitated the work permit approval process for people who need to enter Canada to service or maintain machinery that is off warranty, this should not be construed as a blanket LMIA exemption. For cases where the foreign worker’s presence in Canada is required for more than 30 days, foreign employers will still be required to obtain LMIAs for longer term work permits. CBSA will likely exercise flexibility when the duration of entry is between 30 and 45 days, or if an extension is required. However, for maintenance or repairs that will take in excess of 30 days, employers must plan to obtain an LMIA as they have before. Alternatively, foreign employers may want to consider multiple short-term entries.
It is hoped that with the LMIA exemption for out-of-warranty service personnel, ESDC can devote more resources to processing LMIA applications from Canadian employers awaiting foreign workers to meet long-term human resource needs.
Kudos to CIC for making this much-needed change that supports Canadian businesses and manufacturers. The pressures on Service Canada must have influenced this decision.