What U.S. Companies Need to Know Regarding Canadian Temporary Worker Status

The North-American Free Trade Agreement (NAFTA) eases the temporary entry of citizens of the United States, Mexico and Canada, whose activities are related to the trade of goods or services, or to investment. Business visitors can be admitted for business purposes under R186(a) and can carry out their activities without the need for a work permit if certain conditions are met. We are providing you this information in the event that you send employees across the border that fit under this exception. If your situation does not qualify under an exception, we can provide you with the documentation necessary to apply for a work permit. (If you are contracting with a Canadian company, you will also need to obtain an LMO. An LMO is a Labour Market Opinion issued by the HRSDC, otherwise known as Service Canada, allowing Canadian employers to hire foreign nationals in a variety of occupations.)

Business Visitors (R187):

Requirements:
1. citizenship of the United States or Mexico;
2. business activities as described in Appendix 1603.A.1 (selected summary below);
3. activities are international in scope;
4. no intent to enter the Canadian labor market;
5. the primary source of remuneration remains outside Canada;
6. the principal place of business remains outside Canada; and
7. compliance with existing immigration/admissibility requirements for temporary entry.

Business Activities:
Activities of a commercial nature that reflect the components of a business cycle. (Please see relevant provisions of Appendix 1603.A.1; selected summary below)
1. research and design;
2. growth, manufacture and production;
3. marketing;
4. sales;
5. distribution;
6. after-sales service; and
7. general service.

Application:
1. Business visitors must apply at a Point of Entry (POE); an application cannot be made prior to arriving in Canada.
2. Business visitors can be admitted at the Primary Inspection Line (except persons applying for entry under the “after-sales service provision,” who must be referred to Immigration Secondary).

Required Documentation for Each Individual:
1. proof of American or Mexican citizenship;
2. documentation to support the purpose for entry, for instance a business activity listed in Appendix 1603.A.1; and
3. evidence that the business activity is international in scope
4. evidence that the person is not attempting to enter the Canadian labor market.

The business person can usually satisfy these requirements by demonstrating the following with a signed document (company officer’s signature) from the Company stating that:
1. the primary source of remuneration is outside Canada;
2. the person’s place of business remains outside Canada (business cards, business papers, advertising pamphlets, etc. may be provided as proof); and
3. the profits of the business are accumulated primarily outside Canada.

The officer at the border will likely request that the applicant/business visitor establish that the applicant retains employment outside Canada (as an employee of an enterprise or as a self-employed individual) and that the primary source of remuneration remains outside Canada. In general, an individual who is to be paid in Canada would be considered to be joining the labor market and could not be admitted as a business visitor. (The payment of expenses incidental to the trip is allowed, as is an honorarium.) Thus, the need for a signed document from the company will help demonstrate the requirements above. We recommend the individual name of the person requesting entry be in the document.

NAFTA is a facilitative agreement, so the applicant should be given every opportunity to establish that the admission criteria for business visitors are being met and to provide any missing documentation by alternative means, such as by fax. A verbal statement that the business of the applicant is being carried on outside Canada can be acceptable, but may not be, depending on the circumstances.


Business Activities defined

Selected provisions of Appendix 1603.A.1 that fall under the “Business Visitor” exception to a work permit--
Marketing:
• Market researchers and analysts conducting independent research or analysis or research or analysis for an enterprise located in the United States or Mexico.
• Trade fair and promotional personnel attending a trade convention.
• Where the business of the convention involves sales rather than simple promotion, the provisions under Sales apply.

Sales:
• Sales representatives and agents taking orders or negotiating contracts for goods or services for an enterprise located in the United States or Mexico but not delivering goods or providing services.
• Buyers purchasing for an enterprise located in the United States or Mexico.
• Sales representatives and agents cannot sell Canadian-made goods or services provided by a Canadian.
• This provision allows persons to sell to the general public, provided that the goods or services are not delivered or available to the buyer at the time of sale (on the same business trip). The seller may only take orders for the goods or enter into contracts for the services.

Conventions:
For events held by the following organizations:
• Associations;
• Corporations, and
• Governments.

Events can be one of the following:
• association meetings, conventions and congresses;
• corporate meetings;
• incentive meetings, or
• trade shows, exhibitions and consumer shows.

Setting up display:
Company employees will require work permits to install and dismantle a booth or display if it is larger than a portable pop-up. Work permits for this purpose do not require an LMO.
Contract Service Providers:
Foreign service providers who are working under contract for exhibitors require work permits.

This includes persons who are involved in activities such as:
• the installation and dismantling of a show or exhibit;
• audio video, staging, or show decorating services, and
• lighting, carpet laying, carpentry, or electrical work.

All foreign service providers working under contract to Canadian events require work permits. Work permits for this purpose require an LMO.

Foreign service providers who are supervisory personnel working under contract for foreign
events require work permits. Work permits for this purpose do not require an LMO, as long as the supervisors will be directing local hires.

Exhibitors are expected to hire Canadians to do all the labour on the convention floor.

After-sales Service:
After-sales services include those provided by persons repairing and servicing, supervising installers, and setting up and testing commercial or industrial equipment (including computer software). “Setting up” does not include hands-on installation generally performed by construction or building trades (electricians, pipe fitters, etc.). R187 also applies to persons seeking entry to repair or service specialized equipment, purchased or leased outside Canada, provided the service is being performed as part of the original or extended sales agreement, lease agreement, warranty, or service contract.

Service personnel coming to perform service work on equipment or machinery that is either out of warranty, or where no service contract exists, continue to require a positive LMO and a work permit.

Warranty or Service Agreement:
Service contracts must have been negotiated as part of the original sales or lease agreements or be an extension of the original agreement. Service contracts negotiated with third parties after the signing of the sales or lease agreement are not covered by this exemption. If, however, the original sales agreement indicates that a third company has been or will be contracted to service the equipment, R187 applies. Where the work is not covered under a warranty, a confirmed work permit is required.

General Service:
Public relations and advertising personnel consulting with business associates, i.e. colleagues or clients, or attending or participating in conventions.

We welcome your comments.

Heather Brenneman Miles
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