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By Sean G McKinsley, B.A., RCIC, President and Managing Director
Canada Immigration and Visa Services https://civs.ca/

OWNER OPERATOR INVESTMENT LMIA STREAM: OPPORTUNITIES FOR BUSINESSES & ENTREPRENEURS

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Introduction

Business investors with business experience and capital to invest have several pathways to choose from in order to immigrate to Canada. Several immigration lawyers and officials have described the Owner/Operator Labour Market Impact Assessment (LMIA) as the most sought after path for potential self-employed business investors; who either do not yet meet the narrow requirements for “self-employed” applicants [i] or do not have the support of a designated organization in order to qualify for an entrepreneur start up visa program. Very few investors have the capital to invest in the entrepreneurial/investment streams such as Immigrant Investor Venture Capital (IIVC) Pilot Program. The owner operator LMIA pathway has been described as “filling the gap” in business immigration after the failure of other avenues such as IIVC pilot program which is deemed by some “to be buying your way to Canadian Citizenship.”1 [ii] In fact, the IIVC pilot program which aimed to attract wealthy immigrant investors’ applicants with a personal net worth of $10 million, (who must invest at least $2 million into a government-approved VC fund) is an utter failure with not even one permanent resident visa granted after one year of launch by 2016. [iii]

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What is a LMIA?

Employers in Canada can hire temporary workers to fill temporary labour or skill shortages through the Temporary Foreign Worker Program (TFWP) among other streams and programs. [iv] However, before hiring a temporary foreign worker (TFW) through the TFWP, an employer needs to get a LMIA (unless the work category is excluded). [v] Government of Canada website defines LMIA as a document which an employer may need to get from Employment and Social Development Canada (ESDC) also known as Service Canada before hiring a foreign worker. [vi] A positive LMIA or a confirmation letter grants permission to the employer who proves that there is a need for a foreign worker to fill the job as no Canadian worker is available and that such hiring will not negatively impact the Canadian labor market. [vii]

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Common Definitions:

  • Employer – “An entity (e.g. person, business, corporation or organization) that makes an offer of employment to one or more foreign national(s) who provide labour in return for compensation for a specified period of time. The employer is generally the entity that hires, controls working conditions and remunerates the foreign national” [viii]
  • Foreign national“An individual who is not a Canadian citizen or permanent resident who is offered employment in Canada in exchange for compensation”. [ix]

Owner/Operator LMIA:

Owner/Operator LMIA is a special class of applications within the TFWP whereby a self-employed individual wishing to enter Canada can do so by establishing or purchasing a business. A foreign national would be considered to be  an owner-operator if they establish that they have controlling interest in the business and cannot be fired/ dismissed (only answerable to themselves). [x] Controlling interest according to guidelines and policy can be established by either [xi]:

  1. purchasing a business and be involved in its day-to-day operations (being a sole proprietor),
  2. by being the majority shareholder (holding at least 50.1% shares) or
  3. by providing an official document confirming that they hold the majority interest (even if they don’t hold 50.1% of total shares). [xii] There is no specified minimum percentage of shares to be held by a foreign national to be considered an owner-operator. In cases, where there are multiple owners of a business, the largest shareholder or the equal shareholder designated as the “employer” must apply for LMIAs to Service Canada for the other co-owners as “workers”. [xiii]

Individuals who only receive shares (less than to establish the controlling interest) as part of a compensation package are not subject to the term owner-operator. [xiv] The foreign nationals must demonstrate that they have the controlling interest prior to submitting their application and for the duration of their employment in Canada. [xv] (For a detailed explanation on this point refer to the material under- Four key scenarios),

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Immigration and Refugee Protection Regulations (IRPR)

Owner-operators must meet specific requirements and uphold the conditions as set out in the Immigration and Refugee Protection Regulations (IRPR).  Under section 203(1) of the IRPR, [xvi] work permits may be issued to foreign nationals whose proposed Canadian employer has obtained an opinion from ESDC on the following criteria:

  1. Genuineness -The officer has to decide whether the job offer is genuine under Section 200(5) of IRPR. [xvii] This provision has to be interpreted in light of the temporary foreign worker program (TFWP) policy published by Service Canada. Current TFW policy requires that an employer must be identified [xviii] and the employer/employee relationship established [xix] to allow ESDC to fulfill its regulatory responsibilities in the administration of the Temporary Foreign Worker (TFW) Program. Further as per policy, “An offer of employment is made by an employer or group of employers to a foreign national thereby establishing an employer—employee relationship”. [xx] In cases of owner-operator to establish employer-employee relationship but in the absence of a job offer, the controlling interest, the business plan or contract to purchase shares in a business are evaluated by ESDC as equivalent to a job offer in the context of the TWFP program. [xxi]
  2. Federal-Territorial/Provincial AgreementsSection 203 (1)(c) provides that the issuance of a work permit should not be inconsistent with the terms of any federal-provincial agreement that apply to the employers of foreign nationals [xxii];
  3. Language RestrictionsSection 203(1.01) of IRPR states that if the offer of employment does not require the ability to communicate in English or French then there would be a negative effect on the labour market in Canada; unless among other things, the employer (owner operator) proves that the requirement of ability to communicate in the other language is a “bona fide requirement” for performing the duties associated with the employment. [xxiii] If the offer of employment does not require the ability to communicate in any specific language or requires in any language other than English or French than the officer can assess the genuineness of the offer based on reasonable employment needs of the employer under Section 200(5)(b)). [xxiv] “Reasonable employment needs are those needs which could easily be seen as taking place within the context of the goods and services that the employer business provides and should make basic business sense”. [xxv] Depending upon the decision of the assessing officer the employer has to change the language requirement accordingly. If the employer disagrees with the decision that a language is required and refuses to agree to the change on the LMIA the file can be refused under the Genuineness criteria. In typical LMIA cases, language proficiency proof in the form of a valid IELTS language test with a CLB of 5.0 in each of the 4 components should be submitted. But it is to be kept in mind that there are no set language requirements and suitability is decided on case by case basis by immigration officers. [xxvi]
  4. Labour Market Factors – There are seven labour market factors identified in Section 203(3) of the IRPR, to determine the impact the employment of the foreign worker on the Canadian labour market. When assessing owner-operator applications, the focus is on not all the factors but job creation or retention and/or skills transfer for all Canadian citizens and permanent residents and whether their business would also likely have a positive, or at least neutral effect on the Canadian labour market. [xxvii] Specific details regarding job specifications along with their timeframes can be recorded which will provide a benchmark and context for future assessment of LMIA applications. [xxviii] Service Canada could then be better positioned to review more documentation from the employer, as well as determine the employer’s progress to-date as per Section 203(3)(g). [xxix]

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What is a LMIA?

Four key scenarios and respective considerations in owner-operator applications

The owner-operator guide used for internal reference by officers administering the TFWP mention four common scenarios and the respective considerations that officers have to satisfy themselves with:

  • New Start-up Business – This scenario applies to a foreign national where the individual is 100% owner of a startup company not in operation in Canada yet but dependent on a positive LMIA and Work Permit (WP). The owner-operator guidelines considerations state that the TFW can be considered owner-operator for the purposes of the LMIA if they can demonstrate that they have considerably prepared to open and operate the business (e.g. have incorporated the business, applied for a business license, entered into a lease agreement, securing contracts, etc.), have a viable business plan, have the intent and plan to retain/hire Canadian citizens and permanent residents within a reasonably short timeframe. If the officer is not satisfied than “refusal can be issued on Actively Engaged (“The employer must have an operating/functioning business, providing either a good or service related to the job offer made to the TFW in Canada.”) as well as on Reasonable Employment Need (current script on “Anticipatory work” may need to be modified to suit the situation).” [xxx]
  • Complete Purchases/Ownership Change of Existing Canadian Business: When the foreign employee-investor acquires 100% interest of an existing Canadian business, and the LMIA application voluntarily includes documents such as share purchase agreement, notice of articles, central securities register, CRA# shareholding/ownership documents indicating purchase/ownership change has been completed, then these documents would be considered as sufficient proof of the foreign national’s relationship to the business. [xxxi] Other requirements still have to be satisfied though. An Employer Note is required to indicate change of ownership if the previous owner had previously submitted LMIAs and the previous employer ID must deactivated. [xxxii]
  • Pending Purchase of Existing Business: When the current owner intends to sell 100% of the Canadian business to the immigrant investor, but completion of purchase/ownership change is contingent on a LMIA and WP then the TFW can be considered owner-operator for the purposes of LMIA based on the following such as intention of the parties especially the TFW. For example, Immigration authorities would consider the stage of completion of the transaction (tentatively signed share purchase agreement, monies in escrow account), how viable the business is and whether the investor has a plan to hire or retain Canadian workers in a short timeframe. If the parties fail to satisfy the officer on the genuineness of the transaction, then the LMIA application can be refused as technically the foreign national is not owner-operator yet and no recruitment was conducted. The existing owner could also submit the LMIA application to hire the foreign investor into a specific position in the business pending purchase. The investor can work in that position until the purchase is completed. After the purchase, the new owner-operator will submit a new LMIA to support themselves. [xxxiii]
  • Partial Purchase of Existing Business: When the owner operator has partially purchased a Canadian Business but is still not a 100% owner, then officer will assess who has the largest share in the business to determine if the investor be considered a Principal Owner or Co-owner. Other important consideration is if existing owners/directors will continue to be involved in the operation and management of the business why the foreign national’s involvement is required. Is the transaction really genuine or in other words is there a reasonable employment need? [xxxiv]
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Other Key Considerations [xxxv]

  • In owner-operator LMIA applications, the burden of proof is on the investor to provide information to prove their shareholding/ownership status.
  • For high-wage owner-operator applications, transition plan requirements apply. A transition plan “describes the activities you are agreeing to undertake to recruit, retain and train Canadians and permanent residents and to reduce your reliance on the Temporary Foreign Worker Program.” [xxxvi]
  • For low-wage owner-operator applications, CAP on low wage position requirements apply. [xxxvii]

Benefits of owner-operator LMIA applications

As mentioned earlier, there are several benefits of applying through an owner-operator LMIA compared to other business immigration streams. As long as the foreign national has a viable business plan and the transaction is genuine, the probability of a positive –owner-operator LMIA application is there. As per the data presented by the Canadian government between the period from April 1, 2015 to March 31, 2016, the results are as follows:  [xxxviii]

TotalLMIAsProcessed

The highlights are that only 1% out of the total 42,550 LMIAs processed during that period were cancelled/revoked and only 16% of the applications had a negative decision. The processing time for owner-operator LMIA application is short but it varies according to the circumstances. There is no requirement of having a certain total net worth or making any non-guaranteed investment in a Canadian government designated investment fund. Further, owner-operator LMIA applications are also exempt from advertising requirements where the employer intending to employ a TFW has to first advertise the position to Canadian Citizens and Permanent residents. [xxxix]

Path to Permanent Residence

After the ruling of a positive LMIA, a work permit is granted (valid for 1-2 years) and in most cases the owner would be in a position to apply for a permanent resident visa through the Federal Skilled Express Entry or under the Provincial Nominee Program. From November 19, 2016, the express entry comprehensive ranking system points awarded for job offers (including those based on Owner/Operator LMIAs) have been reduced from 600 points to either 200 points for senior managerial positions, or to 50 points. [xl]  The limited points now may strengthen the applicant’s Express Entry application but will not automatically guarantee an “Invitation To Apply” (ITA) under provincial nomination programs for Permanent Residence like before. [xli]

Conclusion

The Owner Operated LMIA stream is a suitable option to facilitate admission to Canada as a foreign worker which can become a path to permanent residency at a later stage.  Although the application and assessment process can be rigorous (as there are specific guidelines on the minimum level of investment required or the relevant business experience that the applicant should demonstrate to be approved), if the project is genuine and a comprehensive business plan is submitted, the issuance of a positive LMIA and work permit to a foreign national is a possibility given the high approval rate of LMIA applications in general. The future looks promising as under Citizenship and Immigration Canada‘s (CIC) 2018 Immigration Plan (from now to 2020), about 565,000 newcomers will be admitted through Canada’s economic immigration programs including Express Entry and Provincial Nominee Programs. [xlii]

References

[i] Felt, Meghan and McInnes, Sarah, “The Nuances of Labour Marketing Impact Assessments (LMIA): 2 Key Exemptions to Minimum Advertising Requirements”, retrieved from https://www.mcinnescooper.com/publications/legal-update-the-nuances-of-labour-marketing-impact-assessments-lmia-2-key-exemptions-to-minimum-advertising-requirements/ (last accessed on July 13, 2018.)

[ii] Ing, Victor, “Owner/Operators Filling the Gap in Business Immigration Programs”, retrieved from http://canadian-visa-lawyer.com/owneroperators-filling-the-gap-in-business-immigration-programs/ (last accessed on July 13, 2018.)

[iii] Mas, Susana, “Millionaire immigrant investor program lures only 7 instead of 60”, CBC News, retrieved from http://www.cbc.ca/news/politics/immigration-investor-pilot-program-1.3331204, (last accessed on July 13, 2018.)

[iv] Information retrieved from https://www.canada.ca/en/immigration-refugees-citizenship/services/work-canada/hire-foreign-worker/temporary/find-need-labour-market-impact-assessment.html?_ga=2.73401554.1162186710.1531516580-646925551.1531516580 (last accessed on July 13, 2018.)

[v] Ibid

[vi] ibid

[vii] Information retrieved from http://www.cic.gc.ca/english/helpcentre/answer.asp?qnum=163&top=17 (last accessed on July 13, 2018.)

[viii] Employment and Social Development Canada, “Policy, Temporary Foreign Worker Program”, effective date December, 23, 2016.

[ix] Ibid

[x] Supra note viii and also see, Employment and Social Development Canada, “National TFWP, Q & A”, definition of “Owner-Operator” effective date, August 29, 2016.

[xi] Ibid, also see Employment and Social Development Canada, “Owner-Operator Guidance – TFW in WT”

[xii] Information retrieved from https://www.canada.ca/en/employment-social-development/services/foreign-workers/variations.html (last accessed on July 13, 2018.)

[xiii] Employment and Social Development Canada, “Owner-Operator Q&A- TFW in WT”, Service Wiki.

[xiv] Employment and Social Development Canada, “National TFWP, Q & A”, definition of “Owner-Operator” effective date, August 29, 2016.

[xv] Information retrieved from https://www.canada.ca/en/employment-social-development/services/foreign-workers/variations.html (last accessed on July 13, 2018.)

[xvi] Section 203 of Immigration and Refugee Protection Regulations regulations, retrieved from http://laws-lois.justice.gc.ca/eng/regulations/SOR-2002-227/page-42.html#docCont, (last accessed on July 13, 2018.)

[xvii] See Section 200, Division 3, Issuance of Work Permits, Immigration and Refugee Protection Regulations, retrieved from http://laws-lois.justice.gc.ca/eng/regulations/sor-2002-227/page-41.html#h-106, (last accessed on July 13, 2018.)

[xviii] Employment and Social Development Canada, “Policy, Temporary Foreign Worker Program”, effective date December, 23, 2016.

[xix] Ibid

[xx] Ibid

[xxi] Ibid

[xxii] Section 203 of Immigration and Refugee Protection Regulations regulations, retrieved from http://laws-lois.justice.gc.ca/eng/regulations/SOR-2002-227/page-42.html#docCont, (last accessed on July 13, 2018.)

[xxiii] Ibid

[xxiv] Employment and Social Development Canada, “National TFWP, Q & A”, definition of “Owner-Operator” effective date, August 29, 2016.

[xxv] Ibid

[xxvi] Information retrieved from https://www.canada.ca/en/immigration-refugees-citizenship/corporate/publications-manuals/operational-bulletins-manuals/temporary-residents/foreign-workers/eligibility/assessing-language-requirements.html, (last accessed on July 13, 2018.)

[xxvii] Employment and Social Development Canada, Key Considerations, “Owner-Operator Guidance – TFW in WT” and Employment and Social Development Canada, “Policy, Temporary Foreign Worker Program”, effective date December, 23, 2016.

[xxviii] Employment and Social Development Canada, “Owner-Operator Q&A- TFW in WT”, Service Wiki.

[xxix] Ibid

[xxx] Employment and Social Development Canada, Key Considerations, “Owner-Operator Guidance – TFW in WT”

[xxxi] Ibid

[xxxii] Ibid

[xxxiii] Ibid

[xxxiv] Ibid

[xxxv] Employment and Social Development Canada, Key Considerations, “Owner-Operator Guidance – TFW in WT”

[xxxvi] Information retrieved from, https://www.canada.ca/en/employment-social-development/services/foreign-workers/median-wage/high/requirements.html#h2.5 (last accessed on July 13, 2018.) and see Employment and Social Development Canada, Key Considerations, “Owner-Operator Guidance – TFW in WT”

[xxxvii] “Cap on Low wage positions”- https://www.canada.ca/en/employment-social-development/services/foreign-workers/median-wage/low/requirements.html and see Employment and Social Development Canada, Key Considerations, “Owner-Operator Guidance – TFW in WT”

[xxxviii] Data retrieved from, https://www.canada.ca/en/employment-social-development/corporate/transparency/laws-regulations/interpretation-policy.html#h4.3 (last accessed on July 13, 2018.)

[xxxix] Information retrieved from https://www.canada.ca/en/employment-social-development/services/foreign-workers/variations.html (last accessed on July 13, 2018.)

[xl] Hardy, Christopher, “Owner/Operator Labour Market Impact Assessment and its importance for Permanent Residence applications in 2017”, retrieved from, https://www.mccarthy.ca/en/insights/blogs/canadian-employer-advisor/owneroperator-labour-market-impact-assessment-and-its-importance-permanent-residence-applications-2017 (last accessed on July 13, 2018.)

[xli] Ibid

[xlii] Information retrieved from https://www.cicnews.com/2017/11/canada-welcome-nearly-one-million-new-immigrants-through-2020-119798.html#gs.9wrqe1o, (last accessed on July 13, 2018.)

About the author: Prior to establishing Canada Immigration and Visa Services (CIVS), Mr. McKinsley served as the senior legislative aide for two prominent Members of the House of Commons of Canada.  Mr. McKinsley also has a distinguished career in the public and private sectors having held positions of Chief Operating Officer of a Western Canadian Law Firm and past Executive Director of a provincial Taxpayer Association.

DISCLAIMER: This article/guide is being offered for informational purposes only by Canada Immigration and Visa Services Inc (CIVS) While CIVS has made every effort to present accurate and reliable information, we hereby disclaim any liability for any errors, omissions or inconsistencies in this guide. Due to the continuing policy and/or program changes, information included in this guide may not be current as of your reading. Please check before using the information contained in this guide. Use of this guide and its contents is voluntary. CIVS or any of the authors of this guide is in no way responsible for your use of the information contained in this guide or the results of that use. All information provided in this guide is for informational purposes only, and as such should not be construed as advice. You should consult the appropriate website, and corresponding legislation in the appropriate area before acting upon any information contained in this guide.  Nothing in this guide should be construed as possessional advice.  This guide features information from many sources and should not be confused with an official reflection of policy and programming.

Immigrating to Canada as a Business Owner – Owner Operator LMIA Pathway Step by Step

The Owner Operator Labour Market Impact Assessment (LMIA) pathway is a great option for foreign nationals who are looking to become permanent residents and settle in Canada as business owners and operators. To facilitate admission into Canada under the Owner Operator LMIA stream, a foreign national must have a controlling share (50.1%+) in an existing Canadian business or launch their own business in Canada in which they have a controlling share. The Owner Operator LMIA pathway is most suitable for three types of individuals looking to become permanent residents of Canada.

  1. Foreign nationals that have an established business in their home country or in several countries and are looking to launch their business in Canada by obtaining an Owner Operator LMIA;
  2. Foreign nationals who have the financial assets to launch a new business in Canada and be approved for an Owner Operator LMIA; and/or
  3. Foreign nationals who have the financial assets to purchase an existing business in Canada to become the Owner Operator and be approved for an Owner Operator LMIA.

The process to becoming a permanent resident of Canada through the Owner Operator LMIA pathway is summarized in an estimated possible timeline below and how CIVS can help to make it real for you and your family to immigrate to Canada:

Step 1: Purchase an existing Canadian business or start your own business in Canada

There are several requirements for your business, whether purchased as an existing business or as a start up, to enable you to be eligible for the Owner Operator LMIA pathway to immigration. As licensed and regulated immigration professionals, Sean G McKinsley (Managing Director at CIVS) specializes in business immigration. The team at Canada Immigration and Visa Services – CIVS – are highly knowledgeable and can provide professional consultation, advice, and support on whether the business you choose to start or purchase is eligible for the Owner Operator pathway.

Deciding what type of business you want to purchase, what business you want to start, the amount of capital you have, and where you want to settle in Canada for you and your family are all equally important. It is critical to investigate all these factors and more with the support of CIVS to make the transition to Canadian permanent residency and give your business the best chance of success.

CIVS will provide you with all the resources and support during this step to help you choose the right place to settle in Canada and support you with launching or purchasing your business.

For more information on the types of businesses that are eligible for purchase or startup through the owner operator LMIA pathway, please visit this link for more info: https://civs.ca/2019/05/starting-your-business-in-canada-use-owner-operator-lmia-pathway-to-permanent-residence/

https://civs.ca/contact-us/

Step 2: Submit an Owner Operator LMIA to ESDC (Employment and Social Development Canada) a subsidiary of Service Canada

An Owner Operator LMIA must be approved (confirmed) to have a positive or neutral impact on the Canadian labour market.  This determination is made by Service Canada (ESDC) for you to be eligible to work at your newly started or purchased business in Canada. LMIA stands for Labour Market Impact Assessment. The main point for the government approving or refusing LMIA’s is dependent on whether or not the issue of an LMIA (under the Owner Operator stream) will be viewed as a positive or neutral (not negative) to the Canadian economy. That is to say:  will an approved Owner Operator LMIA create more jobs for Canadians or will it negatively impact the job market?

At Canada Immigration and Visa Services, we focus extensively on the Owner Operator LMIA stream pathways for investor immigration and process significant amounts per month with many of our applications being approved. We know how to submit applications to Service Canada (ESDC) correctly and what types of supporting documentation are necessary for your application to be approved.

CIVS will provide you with all the resources and support you need to give you the greatest chance at having your Owner Operator LMIA approved.

For more information on what is required in an Owner Operator LMIA and how to get a positive approval please see the link below: https://civs.ca/2019/05/starting-your-business-in-canada-use-owner-operator-lmia-pathway-to-permanent-residence/

https://civs.ca/contact-us/

Step 3: Obtain your work permit based on a positive LMIA

When your Owner Operator LMIA gets a positive response (this is called LMIA confirmation) from ESDC Canada, you are now eligible to obtain a work permit to work in Canada. Depending on your citizenship and residence, you may be able to apply at a Port of Entry to Canada. Otherwise, you may need to apply online for your work permit outside of Canada and processing times can vary.

Once you have your work permit, it will be valid for the time that your Owner Operator LMIA is approved for. Typically, your LMIA and work permit will be good for a period of up to 2 years, although some work permits are limited for a shorter time period at the discretion of the Government of Canada.

CIVS will support you in filing your work permit application with the government of Canada to avoid common mistakes and potential delays in your processing.

For more information on applying for your work permit with your approved Owner Operator LMIA please visit the link below: https://civs.ca/2019/05/starting-your-business-in-canada-use-owner-operator-lmia-pathway-to-permanent-residence/

https://civs.ca/contact-us/

Step 4: Obtain Permanent Residency

Over the course of your valid work permit, it is imperative that an appropriate permanent residency stream is determined for you to successfully obtain your permanent residency in Canada. Depending on your English or French language skills, education, age, and other factors, the permanent residency stream that is most applicable to your needs to be decided carefully. This is because processing times and delays ensure that you need to plan accordingly to avoid any disruption of your status to work in Canada.

CIVS will support you in applying for your Permanent Residency using the appropriate stream, whether Express Entry (Federal Skilled Worker), Express Entry (CEC), or a separate and applicable provincial stream for your specific case.

For more information on obtaining permanent residency as a business owner in Canada, please see the link below: https://civs.ca/2019/05/starting-your-business-in-canada-use-owner-operator-lmia-pathway-to-permanent-residence/

https://civs.ca/contact-us/

If you think that immigrating to Canada under the Owner Operator LMIA stream is a viable option for you and your family, book a consultation time with us and we can guide you through the process and answer all the questions you have.

Starting Your Business in Canada

Coming to Canada under the Owner Operator Pathway is 2-Staged Program

The Temporary Foreign Worker (TFW) program is a suitable vehicle to facilitate the admission to Canada of a foreign owner, following the sale of a Canadian business or the launch of a new entity.

For foreign investors, this pathway to Canada is 2-staged, beginning with a temporary work permit under the federal Owner-Operator rules.  These policies will apply for the sale and transfer of a significant portion of ownership in a Canadian business to a foreign national.  Once admitted on a work permit, successful candidates can at a later stage, apply for permanent residence to Canada under one of the programs serviced by the Express Entry system or under a suitable provincial business immigration stream.

Labour Market Impact Assessment (LMIA) Exemption – Entrepreneur and Self-Employed as Business Owner Operator

For most applicants, if you want to apply for a work permit or business in Canada, you need a Labour Market Impact Assessment (LMIA) from Employment and Social Development Canada (ESDC) and a job offer letter from your future employer.  This usually requires advertising an employment opportunity a month in advance offering the employment opportunity firstly to Canadians, First Nations or Permanent Residents. However, under the Owner-Operator pathway an individual has an exemption or “variation” from this advertising requirement to offer the position to someone else first.

Purchasing an Existing Business

This LMIA exemption or variation is available for business owners who  are eligible for an LMIA exemption if they own a controlling share in a business and cannot be fired from their employment.

A “controlling share” is defined as the person who is a sole proprietor, or the only voting shareholder, or who is shareholder with a minimum of 50.1% of the shares. The Owner-Operator must also be involved in the daily business activities and concurrently have an employment relationship with the company. That is to say, the Owner-Operator as an employee cannot be dismissed because s/he is the majority or 100% owner of his/her own company.   This is not a passive (non-active) investment pathway.  Thus the Owner-Operator who manages the day-to-day business of the employer company.

For Start Ups / Create a New Business

The Owner Operator LMIA exemption or variation requires the employer to have been “actively engaged” in the business prior to applying for a work permit under this pathway.

For start ups (a new company) a future Owner-Operator needs to demonstrate that s/he is an active participant through preparatory activity, which could be proof of:

  1. A financial investment in a business;
  2. Negotiating business contracts (for instance, signing a lease agreement);
  3. Establishing / applying for a Business Number (BN) registration with the Canada Revenue Agency (CRA);
  4. Applying for and receiving Licenses or Permits; and
  5. Presenting a well thought out and detailed Business Plan.

To Recap – The Owner Operator LMIA Pathway to Working in Canada is open to

  1. An Entrepreneur and or self-employed individual;
  2. Majority owner (not less than 50.1%) and cannot be dismissed from management of the enterprise;
  3. Employs or will employ at least one Canadian, First Nations or Permanent Resident; and
  4. Will operate a business in Canada that contributes a significant social, cultural or economic benefit or a work opportunities for Canadian citizens, First Nations or Permanent Residents in Canada.

Are you an existing business owner looking to take your business to the next level?

Canada Immigration and Visa Services (CIVS) assists qualified individuals in making their dream come true in coming to Canada as a business Owner-Operator.

We are a turn-key service provider.  We look for the most appropriate area in the country to fit your specific business needs. We look for your target market and position you there, in the middle of all traffic. We strive to offer you the best services at best turnaround time in the market.

Contact us for a free evaluation and consultation about your potential to come to Canada as a business Owner Operator.

Here is our Process:

  1. We start by getting to know you and your business idea. We provide you with a free initial consultation;
  2. We work with you to consider options for the start-up or purchase of a business in the region of Canada you choose;
  3. We do our research and make sure that your needs on a personal, social family and economic basis are taken care of in our planning with you;
  4. Your business will be prepared from start to end. We have relationships with bankers, accountants and other professionals that may even assist you in applying for Canadian bank loans and other forms of business financing;
  5. After coming to Canada, you and your family will be eligible for healthcare and your children can attend school; and
  6. You may find yourself to be fortunate compared with other newcomers to Canada because you are coming prepared for resettlement in Canada with a business and the tools you and your family need to be successful.

At Canada Immigration and Visa Services (CIVS) we are proud to offer our clients assistance to:

  • Establish a subsidiary of a foreign company in Canada
  • Establish a new company in Canada
  • Purchase an existing business in Canada
  • Obtaining visas and permits for the business owners, managers, employees and family members in Canada

After Labour Market Impact Assessment is submitted:

After Employment and Social Development Canada (ESDC) receives a Labour Market Impact Assessment (LMIA) from a Canadian employer, they begin their assessment of the application. This will eventually result in either a positive or negative LMIA. If positive, then the Temporary Foreign Worker’s (TFW) work permit application will be assessed. There is also the potential for an LMIA to be revoked later upon reassessment.

This article will be divided into the following 4 main sections: Assessment Process, Positive or Negative LMIA, Work Permit, and Revocation of an LMIA.

LMIA Assessment Process

Every LMIA application goes through the same assessment process once it is received by Employment and Social Development Canada (ESDC). The steps of this process are detailed below:

  • Verify Employer’s Eligibility
    • First and foremost, ESDC will start by ensuring that the Canadian employer submitting the LMIA application is in fact eligible to apply. ESDC is in a constant process of investigating employers and keeps an updated list on their website of ineligible employers or employers who have had their LMIA revoked.
  • Verify Job Consistency
    • The job on offer must comply with relevant federal, provincial, and territorial agreements.
  • Assess Genuineness
    • At this stage, ESDC investigates whether the job offer on the LMIA application is genuine. There are a number of questions asked here, including:
      • Can the employer fulfill the terms and conditions of the job offer? (For example, the job offered should match the employment needs of the employer. The job should not have been created simply to match the criteria on the National Occupational Classification)
  • Assess Language Requirements
    • Next, ESDC will investigate which languages are required to do the job on offer. This will usually be English or French, but an employer can provide proof that another language is required for the job if necessary.
  • Assess Impact on the Canadian Labour Market
    • When a Temporary Foreign Worker is hired, the ESDC needs to consider the effect this will have on the overall labour market in Canada. For this stage, the following factors might be considered:
      • Benefit to the labour market (For example, might hiring the TFW help to create jobs for Canadians later or stimulate economic growth?)
      • Wages and working conditions offered
      • Effect on the settlement of a labour dispute (Is the TFW being hired to replace previous workers who refuse to work due to contract disputes or unpaid benefits?)
  • Assess Previous Job Offers from Employer
    • If the employer has made previous job offers to Temporary Foreign Workers, ESDC will verify that the new job offer is similar to the previous offers. The previous and new job offers will be compared using criteria such as wages and working conditions. The idea here is that the wages and working conditions should similar or better than the previous job offers.

Positive or Negative LMIA

Once Employment and Social Development Canada has assessed the LMIA application through the steps detailed above, then a final decision will be provided to the employer in writing. Naturally, if all of the program requirements are not met, the employer will be issued a negative LMIA and will be unable to hire the Temporary Foreign Worker(s).

If the employer receives a positive LMIA from ESDC, then the LMIA will be valid for 6 months from its issue date. This positive LMIA will contain details about the job offer including wages and working conditions. It will also have a system file number.

After the employer receives the positive LMIA, they should send a copy of the letter to the Temporary Foreign Workers that were included on the application. The employer should not send the Annex B section of the letter (containing the names of the TFWs) as this only for the employer’s records.

At this point, the Temporary Foreign Workers who receive the positive LMIA letter should take steps to apply for a work permit from Immigration Refugees and Citizenship Canada (IRCC). When applying for the work permit, the worker should include a copy of the positive LMIA letter with the application. The LMIA letter must be signed by both the employer and the worker.

Canadian Work Permit

Immigration Refugees and Citizenship Canada (IRCC) will assess the Temporary Foreign Worker’s work permit application. If the work permit is granted, the TFW will receive a work permit with specific details including:

  • Duration of work permit
  • Specific employer
  • Working conditions

After the Temporary Foreign Worker arrives in Canada, the employer must make sure that the worker is legal to work. The employer must ensure that the work permit issued has not yet expired and that they are listed as the authorized employer. Furthermore, the employer must maintain weekly or monthly records of the hours the TFW has worked (including overtime). What constitutes overtime hours may differ depending on the Canadian province where the worker is employed. For example, currently in Ontario, overtime is defined as any work over 44 hours per week.

LMIA Work Permit Renewal

If an employer wishes to retain a Temporary Foreign Worker for a longer period of time, then a new LMIA application must be submitted to ESDC at between 6 to 4 months before the worker’s work permit expires. It is important to start the LMIA application process so that everything is complete (advertising, recruitment, etc.) at least 4 months before the end of the Temporary Foreign Worker’s work permit.

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