Podcast Transcript: How to get foreign contacts into Canada

Not only are many Canadians unprepared to cross the U.S. border on business, they’re also unprepared to welcome their foreign business contacts into Canada.

You may be surprised to hear this but it takes more than just a handshake or an invite to get your foreign clients across the Canadian border.

In the second in our series on business mobility, we’ll hear about one Canadian company’s challenges with this very issue. Stay tuned to hear one expert share some practical advice on a company’s border business blues.

I'm Michael Mancini, Editor-In-Chief of CanadExport, the official e-magazine of the Canadian Trade Commissioner Service – Canada's most extensive network of international business professionals.

With me on the phone is Alan Diner, a partner with the firm Baker McKenzie. Mr. Diner heads the Global Mobility & Executive Transfer Practice Group in Canada, where he assists on all aspects of Canadian immigration and citizenship law. And he’s on the line from his office in Toronto.

Alan Diner: Thanks very much.

Michael Mancini: Now, here’s the letter we received recently from a company in Ontario.

"We are a Canadian-based firm with an American subsidiary. For the past five years employees of this US subsidiary have been travelling regularly to our headquarters in Canada for meetings. Getting our US-based employees over the border has never really been an issue, however we recently hired a US subcontractor to manage a particular file here in Canada. This person is a project manager, and he’s been having problems crossing the border lately. He’s simply coming for business meetings, and it’s not clear why he’s being stopped. How can we hone in on the problem if we can’t quite understand it? Any advice you can offer would be greatly appreciated."

So Alan, how can this company avoid this problem?

Alan Diner: Mike, often it involves documentation. So if an employee or, in this case, a subcontractor is coming to Canada, whether it’s for business meetings or whatever the exact nature of his visit to Canada, having a letter from the Canadian company that’s inviting him here is key because that will help to explain exactly what his purpose is. And what you want to put in that letter as a company – obviously only if it’s true, you only want to make true representations to the border official or there will be severe repercussions. You want to say things like “Our worker, Mr. Smith, will continue to receive all his remuneration from the United States. He will receive no pay whatsoever for his time spent in Canada. He will not be doing any work in Canada. His principal place of business remains Ohio, and the normal accrual of profits for our plant in Ohio remains in the United States.” Anything to indicate, in other words, that this person is not entering the Canadian workforce. If this is the case, he can enter Canada as a business visitor and does not need a work permit to work in Canada.

As soon as it looks like Mr. Smith is rolling up his sleeves and starting to do work in Canada, or do that project management in Canada, or set up machinery in Canada or anything that we would normally pay a Canadian for, that’s when the antennae of the border officials goes up and Mr. Smith starts getting long delays or even a refusal and gets sent back to Ohio.

And so I think what may have triggered the border guards in this case to delay him or give him whatever hassles they did was the fact exactly that he’s a project manager. Because normally that would indicate someone actually coming in to do work functions in Canada. Let’s say he were just coming in for a business meeting – maybe he’s sitting on a board of directors or maybe he’s coming to hear a sales pitch or give a sales pitch – that would all be in the nature of a business meeting. But when you’re talking about rolling up your sleeves and engaging in project management, that would trigger the word ‘work’ to the border official, and work requires a work permit.

Michael Mancini: Alan, you talked about severe repercussions for people who make false representations to border officials. What exactly do you mean by “severe repercussions”?

Alan Diner: A foreign national would be inadmissible if they misrepresented themselves. So that could be withholding a material fact that could induce an error in the administration of our immigration laws. So if you went to the border and said you were just coming for a visit but really you are coming in to work in Canada, well that one small statement, if it were found to be a lie or a misrepresentation, could result in that person being inadmissible to Canada.

Where an employer - that is a Canadian citizen or permanent resident - is trying to get a foreigner from their own company or a different company into Canada, there are penalties for either counselling misrepresentations and there are penalties for contravening immigration laws. You can either be fined or even be sent to prison for it. That criminal offence can apply both to the individual and even to the employer.

Michael Mancini: OK. So we’ve basically separated it into two categories: workers and business visitors. Now, in the case of a worker, what are the kinds of things that they would need to be prepared for?

Alan Diner: Well, a worker in Canada, with a few exceptions – and I can go over those exceptions in a minute – would always require a work permit. Given that this fellow is from the United States, and let’s assume that he’s an American citizen, he of course – or she – does not require a visa. But what the person does require is a work permit – a document that they’re provided at the border or at an airport that says you, let’s say Mr. Smith, have the authority to engage in project management during your time in Canada. And an important fact to remember is it’s not the length of time that one has to worry about, but it’s the simple fact that, even if an hour of work is being done in Canada, this work permit must be obtained from the immigration authorities.

Michael Mancini: So the work permit can be obtained at the border crossing or at the airport. Would that be Citizenship and Immigration Canada?

Alan Diner: That’s an interesting question. It used to be Citizenship and Immigration Canada that issued these work permits. Previously, while it was always Customs as the primary inspection line coming into Canada, whether at the airport or at a port of entry, let’s say a bridge, the Peace Bridge for instance, secondary always used to be Immigration, in other words those folks that you were sent to if there were immigration questions. Now both primary inspection line and secondary, which in fact would issue the work permit or decide to refuse the work permit issuance is both, in both cases, CBSA.

The wrinkle on that is that, in many situations, including for U.S. citizens, one can still go to Citizenship and Immigration Canada. That would be at two places. One would be at a consulate or an embassy abroad. And the second place would be in Canada, for people that don’t require a visa, such as U.S. citizens, you can do it inland at something called the Temporary Foreign Worker Unit. And that’s a CIC or Citizenship and Immigration Canada office that we have across the country which issue a paper approval that the traveller takes with them to the border, and from that paper CBSA looks at it, says “great, you’ve been pre-screened, here’s your work permit,” and they generate that work permit.

Michael Mancini: So for the work permit, you can contact an embassy or a consulate abroad, or contact one of the Temporary Foreign Worker Units located across Canada, now in five locations. I also understand that, if this person is in fact a worker, that they also have to get something called a labour market opinion.

Alan Diner: That’s right. In about half of all work permits that are issued in Canada, and that’s a very rough ballpark figure but it’s a good number for the listening audience to think about…half of them, yes, they require this labour market opinion, which in many cases requires advertising. So there is some advance preparation that must be done in order to get the work permit.

For the other half of the work permits that are issued, they come through what we call labour market opinion or LMO-exempt categories. One of those categories is the North American Free Trade Agreement, or the NAFTA. Many of you would have heard about TN visas, or intra-company transfer visas. These are all categories within the NAFTA, which is one of the many LMO-exempt categories.

So yes, many people require a labour market opinion. But many Americans, because of the NAFTA agreement, do not require a labour market opinion.

Michael Mancini: And just to be clear, a labour market opinion, should that be needed, is available through Human Resources and Skills Development Canada.

Alan Diner: That’s right. Now, if I can add one extra layer to what we’ve talked about…

Michael Mancini: Yes.

Alan Diner: …I mentioned before that, in some cases, there are situations where foreigners can come to the country and work without a work permit. There are several situations where that would be applicable. In a normal company work type situation, it would be where there’s an after-sale service or a warranty provision within the original sales contract. And if there’s work that’s outlined in that contract, the individual worker from the United States or from England or anywhere in the world could come to Canada and actually do work in Canada under a business visitor status because of the after-sale service provision.

There do happen to be some other categories, people like diplomats, clergy, international students who are working on campus, certain athletes and referees, news reporters, certain types of entertainers, emergency workers. These are all examples of the types of workers that can come into Canada and, if they qualify under this category of work permit exempt work in Canada, they’re able to come in and do their work without a work permit.

There’s a few layers to this, and obviously every situation is different. That’s why it’s hard to think of all the different kinds of circumstances that could come up and give you a one-shot solution for everything.

Michael Mancini: Right. But you obviously have to make sure you know who you’re inviting. Is criminality a factor? If a U.S. citizen, for example, has a record of some sort, what happens in those cases?

Alan Diner: Well, this is an area that also has changed with the times. I mentioned that we’d had a shift in the face of the Canadian border from CIC to CBSA. Along with that has come certain advents in technology. We’ve seen greater sharing of systems: things like INTERPOL, are a lot more prevalent across the world and Canadian and American policing authorities sharing their systems. So what we’re seeing is not necessarily more criminal convictions, but those high school or university incidents that have long been forgotten but suddenly start to show up on that border official’s computer screen. Those did not appear ten years ago. And the reason for that is exactly the sharing of information that I’m talking about. And definitely that’s a question that needs to be asked.

Business visitors don’t see it coming up as much, but certainly if the passport were run through the system and it came up, it could be a problem. It’s more often when a fuller check is done in an application for a work permit that we’ll see the DUIs. It could even be a hunting offence out of season that gets caught under what we call our inadmissibility provisions of the immigration laws.

And when an offence fits a certain type of offence under our Criminal Code, that renders that traveller inadmissible to Canada, and the person has to get what we used to call a Minister’s permit, but what is now called a Temporary Resident Permit. And that overcomes the inadmissibility and allows the person to enter the country.

Michael Mancini: I see. And how about medical issues? How does that come into play?

Alan Diner: Again, inadmissibility is not restricted to simply criminal issues. Inadmissibility can apply to lack of funding or finances for an individual in Canada. It can also apply to people who have a medical condition that will place demands on our health or social services. And again, in a business visitor situation, we wouldn’t usually see it. Often for an American we wouldn’t usually see it because an American coming up for a work permit would not need to undergo a medical, unless that American was working in public health or working directly with school children, as a teacher let’s say. The American in our situation, who is a project manager, or the average engineer, lawyer, accountant, whatever it might be, you know, tradesperson, would not have to have a medical exam.

But for those countries that require medical exams – and there’s many that might surprise you. Korea’s one, and certainly many countries of Southeast Asia and others around the world. People coming here for a period of six months or more – that would be for a work permit – would require a medical. And if they’re found to have a disease that will place those demands on our health or social services, then they will be found inadmissible, and they too will have issues getting into the country.

So medical, yes, but it’s not as much of an issue as criminality in a temporary entry situation. For permanent residents, certainly the medical becomes more of an issue.

Michael Mancini: OK. Let’s go back to the example that we have here, the letter that we got. We were talking about an American subsidiary of a Canadian firm. But what if we were talking about a Canadian subsidiary of a U.S. firm? What changes then?

Alan Diner: Really, as long as there’s a controlling relationship of the affiliate, and it’s not, let’s say, a joint venture, where there is a minority of a control, but in the normal intra-company situation where there’s a subsidiary that is wholly owned or a majority owned by a U.S. parent situation that you asked about, and of course businesses in Canada often fall into that description, there really is no difference from the first example you gave, where it was the Canadian company that owned the American subsidiary. They’re both under immigration laws defined as an intra-company situation, and workers can transfer easily without a need for a labour market opinion. That would be the one half of the work permits that I described, which are LMO-exempt.

Now, the situation when you’re talking about a company – an affiliate in the United States, or a subsidiary in the United States, needing to come into Canada or vice-versa, the situation where an LMO would be needed would be, let’s say it’s a subcontractor, and that person is not a full-time employee of the related firm. Then you can’t say that they’re an intra-company employee. And that’s where, in the situation of a project manager, they wouldn’t really fit anywhere within the NAFTA agreement, and therefore, yes, you’re right, they would need a labour market opinion.

Michael Mancini: And of course, as you said, they’d need a work permit as well. Alan, thanks for your time today.

Alan Diner: You’re most welcome. Thanks for having me.

Michael Mancini: Well, that’s all for this podcast edition of CanadExport. As you’ve heard, this can be a complicated issue. But all the information you need is available on several Government of Canada websites: the Canada Border Services Agency, Human Resources and Skills Development Canada, and Citizenship and Immigration Canada. They’re all listed in this podcast, resource section, on the CanadExport website at www.canadexport.gc.ca.

If you have some stories you’d like to share about your business border crossings, or if you have another kind of business question, just ask the Trade Commissioner Service. You can do so by going to TradeCommissioner.gc.ca, or just look for the Ask the TCS logo on the right navigation bar of the CanadExport website.

I’m Michael Mancini, signing off for now.

To download our other episodes, just go to www.canadexport.gc.ca or go to iTunes and use the searchword “CanadExport.”