Welcome to Perspectives, Fasken’s Legal Voices on Business. Today we'll be discussing the recent immigration measures announced by the federal government and how they will impact Canadian businesses. My name is Stephanie Heinsen and I'm an immigration lawyer based in our Montreal office. Today I'm joined by my colleague Daniel Lee, who is also an immigration lawyer practicing out of our Vancouver office. So in the last few months, Canada has experienced a significant shift in its immigration landscape. For example, with the recent ending of public policies facilitating the hiring of foreign nationals in Canada, unprecedented restrictions on the use of temporary foreign worker program and even most recently within the International Mobility Program. What this means for employers is that they're having to rethink their policies and strategies surrounding international recruitment and foreign worker retention. Today Daniel and I will take the time to discuss the key changes to policy, the top concerns employers in Canada may have given these changes and some business strategies to consider with these new measures in place. We'll start right away and the first topic we'll touch upon is the changes to the LMIA high wage stream. Daniel, one of the most recent changes concerns the LMIA high stream. Can you tell us a little bit more about this change and how it can affect Canadian employers?

Sure, Steph. I'll be happy to. As a reminder, there are different LMIA streams: high wage and low wage. Which stream to use is determined by whether the hourly wage meets the provincial’s median hourly wage effective November 8, 2024. Employer now need to pay 20% more for the LMIA high wage stream in order to be qualified for the LMIA high wage stream. This means the new threshold for Alberta is currently $35.40, and for BC is $34.62. Ontario it is $34.07, and Quebec it is $32.96.

And this represents quite a huge increase, right? It's $5 to $8 an hour depending on the province.

Yeah, absolutely. Steph, does this have any impact on the global talent stream?

From what we know now, this does not currently have an impact on the global talent stream. So, for those who are a little bit less familiar with the temporary foreign worker program and LMIA applications other than high wage and low wage streams, there's also a completely separate stream called the global talent stream. Even though typically these applications are used for high wage applicants, the rule about the 20% increase to the provincial median wage is really for the high wage regular stream and it does not currently affect the global talent stream. So, this is important to note for companies in tech and AI and the software development gaming industry, they can still continue to use the global talent stream and not have to be tied with to this 20% increase on the provincial median wage offered to the foreign worker under the LMIA high wage stream.

One thing to be mindful of is usually each year in November, the prevailing wage for the occupation would be updated. So, for those who are preparing their LMIA application under the global talent stream prior to submit the application, it's important to double check that the prevailing wage is still being met.

Good point. And Daniel, I'm also thinking about another popular stream that you use often with your clients in BC, the LMIA PR stream for permanent residents. I know that there have been some changes in this stream as well. Can you comment a little bit about those?

Sure, happy to. In the past, a lot of employers would prefer to use the LMIA PR stream because there is no requirement to prepare a transition plan, but with the new requirements that became effective for the LMIA PR stream, employers also need to provide a transition plan, so therefore there are less benefits in using the LMIA PR stream now than before. One other thing to note is that for employers who use the LMIA PR stream and they meet the requirement for the low wage stream, the work permit is only issued for one year and not for a longer period of time.

That's good to know.

Steph, shall we move on to the next topic? Talking about current freeze on the LMIA application in the Montreal economic region

For sure. So yes, this was a big surprise to employers based in the Montreal region. What happened is since September 3, 2024 there's been a complete freeze from the government's part on the acceptance of low wage LMIA applications for jobs that are based in the Montreal region and this freeze is meant to go on for a period of six months. It could be extended, we don't know yet. For now, it's meant to last six months, so this would bring us into March 2025. Of course, there are some exceptions to this freeze, and they've singled out some business sectors that can continue to submit low wage applications despite this freeze. Examples of exceptions to the rules are sectors in agriculture, construction, food processing, education and health and social services.

That's really interesting. Thank you for sharing that. Now moving on to the next topic, which is Intra-company transferee work permit. I understand that there has been some recent changes on this area, Steph. Would you be able to highlight some of the changes for us?

Absolutely. So, this one is another change that came as a big surprise because it's affecting the international mobility program as opposed to the temporary foreign worker program. Up until this change to the intra-company transferee program, the changes that we saw mainly affected the temporary foreign worker program. So essentially LMIA based work permit applications. As we know, the intra-company transferee work permit is exempt from an LMIA and yet there's still some new restrictions imposed that limit the possibility of using this program. In certain cases, the major change would be that for an employer to use the Intra-company transferee program to establish a new business in Canada, they need to have revenue generating business operations and at least two other jurisdictions. And so basically in at least two other countries before they can use this program to establish a new business in Canada. This wasn't the case before, so this change took effect October 3, 2024. Prior to this change, it was sufficient for a company to have revenue generating operations in only one other country outside of Canada, and then they can use this program with one business operations outside of Canada, and establish a new offices in Canada. So, this is the major change.

Well, that's very helpful, Steph. I also think there's also one change that is pretty important for companies in Canada and there is now a requirement to have a physical office in Canada before you can do the intra-company transferee work permit application. I know in the past that was not always the case. Steph, do you know if office sharing arrangements, such as WeWork, will be able to fulfill this requirement?

So as per the guidelines that were announced on October 3, 2024, technically what they're saying now is that office sharing spaces, such as WeWork, would not be accepted as physical office as meeting the physical office space requirement. However, I think that this is assessed on a case by case. And in some cases IRCC has mentioned that it may be accepted. So I think it's important to really take the time to assess this and to explain this ahead of time to clients that it is not something that should be taken for granted that just because the client has office sharing spaces that this will meet the criteria for having physical office space in Canada.

Thanks, Steph. I also wanted to highlight that for intra-company transferee work permit, there is now a new requirement to demonstrate that the transfer of the employee to Canada would either create or maintain significant economic, social, or cultural benefits to Canada or create opportunities for Canadian citizens. Previously this was not a requirement, so whenever we work on intra-company transferee work permit application, we always try to look at are there other free trade agreements that we can use. For instance, for citizens of the US and Mexico, there is a Canada US Mexico Agreement. Previously this was called NAFTA, North America Free Trade Agreement, and for individuals who are US citizen or Mexican citizen, they don't need to meet the new requirements that were mentioned earlier for intra-company transferee.

That's a good point, Daniel, and that's a relief for many employers. It's good for them to know that they can still use the CUSMA and that they're not affected by these new rules. Another interesting change as of October 3, 2024 to the general intra-company transferee provisions is the fact that the employer is now obliged to pay the prevailing wage not only for specialized knowledge positions, but also for managerial and executive positions. As you recall, Daniel, before this was a requirement only if they were transferring employees in a specialized knowledge roles.

Yeah, that's actually really helpful Steph. And when calculating the prevailing wage, first thing that we need to do is to figure out what is the occupation so we can determine the NOC code. Second thing we need to ask is where is the primary employment location? If the employee would be required to work across Canada, then we need to ensure that the prevailing wage for Canada is met and not limited to the primary employment location.

Absolutely, good point. Another topic of interest, Daniel, is are all the changes surrounding permanent residency in Canada? So, on October 24, 2024, the government of Canada announced the immigration levels plan for 2025 to 2027, which significantly reduces the quotas for admissibility for permanent residents. Can you tell us, Daniel, how this will affect employers in assisting their employees transition from work permits to PR status? In other words, do you think that the chances of a foreign worker becoming a PR have been reduced since the levels plan was announced?

Sure, happy to. Overall, the Canadian government is trying to deliver a message which is it's going to become more difficult for foreign workers in Canada or outside of Canada to apply for permanent residency and not everyone would be able to obtain permanent residency status. Before the announcement, we were expecting to have an annual quota of half a million for permanent residents for 2025. For next year, that number will be reduced to 395,000 and that's a pretty sharp decrease. Next year, the government would be focusing on helping those who are currently in Canada to transition into permanent residency. So, the emphasis would be on the Canadian Experience Class and that's one of the programs to obtain Canadian permanent residency. And there is an emphasis on foreign workers who work in healthcare occupations and also in trade occupations. Because these jobs are currently in high demand in Canada.

For those who are fluent in French or wanting to learn French, this is a bit of a good news for you, which is Canada is planning to increase the population of those who can speak French. And for 2025 of the total target of 395,000, 8.5% of that will be allocated to those who have French proficiency. Overall, employers need to be mindful that not everyone who are currently in Canada with Canadian work experience will be able to transition into permanent residency and employer who wants to retain their employee may need to rely on the temporary foreign worker program to assist them to extend the current work permit. More employers would receive contacts from their employees to assist them in obtaining labor market impact assessment. LMIA. The reason for that is with a LMIA, the employee could obtain additional points for arranged employment. Despite of the increase in points for arranged employment used in express entry, there is also no guarantee that they would have enough points to receive an invitation to apply under express entry. Therefore, any employees who wants to apply for permanent residency without relying on their employer would need to learn French and obtain a CLB proficiency level seven in French. Steph, wanted to see if you have noticed any other observations or any other comments that you want to share on this topic?

Sure, actually, so you mentioned some great points about permanent residency outside of Quebec. Another thing I want to mention is that it's also going to be just as difficult for foreign workers who are working in the province of Quebec to transition to permanent residents. Actually, the government of Quebec recently announced a freeze of acceptance for one of the most popular streams for permanent residency in Quebec, the regular Quebec skilled worker stream, and this freeze is supposed to end in June, 2025. Another stream that's affected is the graduate Quebec student stream. So that's another thing to consider. So even when these programs are going to reopen in June, if they reopen in June, because we don't know if the freeze is going to be extended further, all of these programs require a certain level of French language knowledge. So, it's very, very important for employers who want to retain foreign workers and help them transition to permanent residency to support them in learning French so that it's easier and so that permanent residence is more accessible to them once the freezes are lifted.

Another thing I wanted to mention, Daniel, is you commented on the fact that employers will need to keep in mind that if they want to retain their foreign workers because of the reduced quotas for permanent residence going forward, that they may need to rely more often than before on the temporary foreign worker program. And it's important to note in this regard that the use or access to the temporary foreign worker program may be more difficult now, especially since as we mentioned a little bit earlier, the new 20% increase requirement on the prevailing median wage. And even if we're talking about low wage LMIA applications, we mentioned earlier the complete freeze for low wage applications for LMIA in the Montreal region, but we should also add that outside of the Montreal region across Canada, if an employer wants to apply for a low wage LMIA, there's the new 10% limit on the number of foreign workers, low wage foreign workers that an employer can hire in one same workplace. And also, the fact that going forward, instead of being able to apply for an employment duration of two years, that has been reduced to one year as well.

Step. That's actually really helpful for employees who wants to help the employee to apply for a new work permit under the temporary foreign worker program. We recently noticed that there has been more random immigration inspection, so this is also something to take into consideration as well.

Alright, so now let's transition to the final topic of discussion for today. Which concerns post-graduation work permits. Daniel, as we know, there have been also a number of changes affecting international students in Canada. For example, not all international students will be eligible to apply for post-graduation work permits under the new requirements effective November 1, 2024. How do you think this will affect employers who currently employ a number of international students, and these students are expected to be graduating soon and be available for full-time employment. So, I imagine this will have an impact and change employers plans on staffing and retention?

That's actually a really good question. A lot of employers in Canada are heavily relying on hiring international students because they have work authorization. They're allowed to work 20 hours off campus during the regular semester. So, the new changes for the postgraduate work permit became effective on November 1, 2024. So, the first question that you need to ask is for the international students, when did they apply for their study permit? Did they apply before September 1, 2024, or after this date? Because the requirements would be different. If they applied before September 1, 2024, then all they need to do is to demonstrate that they have studied at an institution that is a designate learning institution that issue postgraduation work permit, and they would also need to meet the language requirement. And the language requirement is new. And there are two language requirements depending on if the students study at a university or at a college.

International students are allowed to work off campus up to 20 hours per week. Note that effective November 8, 2024, international students can now work off campus up to 24 hours instead of 20 hours per week (Work off campus as an international student - Canada.ca). However, this information was not released until November 15, 2024.

If they study at a university, then the requirement is CLB level seven, and if they study at a college, then the language requirement is CLB level five for anyone who applied for the study permit after November 1st, 2024, whether or not they are eligible for a postgraduate work permit. Depends on if they study at a university or at a college. If they study at a university and they study either undergraduate bachelor’s degree, master PhD, they would still be eligible for the postgraduate work permit. However, if they study at a college, then we need to look at their field of study to determine rather or not, it's on the list of high demand occupation that makes them eligible for the postgraduate work permit. Steph, are there anything else you want to add in relation to postgraduate work permit?

I think you brought on some really interesting points. Basically, what I would add is it's important for employers to not assume that all international students that are currently working for them will be automatically eligible for post graduation work permits. It was the case before, obviously not that they were automatically eligible, but the chances of them being eligible were much higher than now. So it's important for employers to monitor, study permit’s expiry dates, graduation dates, and plan ahead with their international students and have a plan and see if they're aware of these new requirements, especially pertaining to the language requirements and see if their employees think that they could meet these new requirements and then have a plan B. Like you mentioned earlier, Daniel, maybe they will no longer be able to rely on the post-graduation work permit. And if they want to keep these employees, then they will need to think of changing the strategy and maybe using the temporary foreign worker program. So, it's important to stay aware of the changes and plan ahead.

That's very helpful tip, Steph. One other thing that I want to note is in relation to spousal open work permit. So spousal study permit holder are also able to apply for open work permit. There has been some restrictions. In the past, the spousal open work permit would also be issued to those who study in undergraduate programs. Now, spouse of those who study in undergraduate programs are no longer eligible for a spousal open work permit. So only spouses of those who study master’s degrees that is at least 16 months in duration and PhD would be qualified for a spousal open work permit.

Thanks, Daniel. That's a great point. That concludes the topics that we wanted to cover in today's podcast. Daniel, thank you so much for joining me today.

Step. Thanks for the invitation. It has been fun.

If anyone has any other questions or concerns on how these changes will impact your business operations, do not hesitate to contact Daniel or myself or any other member of Fasken Immigration Law Group. Please also remember to subscribe to our immigration bulletins if you aren't already subscribed. All of our immigration bulletins are also accessible online on the Immigration Group section of Fasken's website.