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Canada - Other taxes and levies

Canada - Other taxes and levies

Taxation of international executives

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Social security tax

Are there social security/social insurance taxes in Canada? If so, what are the rates for
employers and employees?

Canada has an extensive social security system that confers benefits for disability, death, family allowances, medical care, old age, sickness, and unemployment. These programs are mainly funded through wage and salary deductions and employer contributions.

An employee’s responsibility is comprised of two parts: Canada Pension Plan (CPP) (or the Québec Pension Plan for employees working in Québec) and Employment Insurance (EI). Contributions made by an employee to CPP, QPP or EI are creditable against that individual’s federal and provincial income tax liability. The credits are calculated at the lowest federal and provincial tax rates.

Type of insurance

Paid by employer

Paid by employee

Total

Canada Pension Plan

5.25%

5.25%

10.50%

Employment Insurance

2.21%

1.58%

3.79%

Total

7.46%

6.83%

14.29%

Canada Pension Plan/Quebec Pension Plan

CPP contributions are required to be deducted from an individual’s remuneration if the individual is employed in Canada, aged between age 17 and 71, and receiving pensionable earnings. The employer is responsible for withholding and remitting the individual portion and a matching employer portion to the CRA, or to Revenu Québec in regards to QPP contributions.

The maximum employer and employee contributions to the CPP for 2020 are each CAD2,898. Individuals residing in Québec contribute to the Québec Pension Plan (QPP) instead of the CPP program. The maximum employer and employee contributions to the QPP for 2020 are each CAD3,146.

Employment insurance

EI is a federal payroll tax required to be deducted from an individual’s remuneration if the individual is employed in Canada and is receiving insurable employment earnings. There is no age limit for deducting EI premiums. Like the CPP contribution, the employer is responsible for withholding and remitting the individual’s portion as well as remitting the employer portion (1.4 times the individual contribution) to the tax authorities. The maximum employee contribution for 2020 is CAD856 and the corresponding maximum employer contribution is CAD1,199.

Individuals residing in Québec contribute a reduced El amount (2020 maximum of CAD650 per employee and a maximum employer premium of CAD911). However, they must also contribute to the Québec Parental Insurance Premium plan (QPIP). The maximum contributions to QPIP for 2020 are CAD388 for the employee and CAD543 for the employer. EI premiums are remitted to the CRA and QPIP premiums are remitted to the MRQ.

CPP and EI premiums are assessed based on employment and (for CPP only) self- employment earnings and the rates are adjusted each year based on actuarial calculations prepared by the federal government. QPP and QPIP premiums are also assessed on earnings and the rates are adjusted each year based on actuarial calculations prepared by the Québec government.

Gift, wealth, estate, and/or inheritance tax

Are there any gift, wealth, estate, and/or inheritance taxes in Canada?

There is no gift tax in Canada. However, income tax may arise since the assets gifted are treated as being disposed of at fair market value. There are certain exceptions for gifts to a spouse.

Rules pertaining to income splitting must also be considered. In certain circumstances, if the item gifted is an income-producing asset or is used to purchase an income-producing asset, the income is attributed back to the taxpayer. This is generally the case for gifts to the spouse and minor children and low-interest loans to non-arm’s length persons.

No federal or provincial estate tax or inheritance tax is imposed in Canada. However, to the extent that a Canadian resident has accrued capital gains or losses, these will be realized on death. For income tax purposes, an individual is considered to have disposed of capital property at its fair market value on the date of death. Taxable capital gains may result but provisions exist to enable a surviving spouse or other specified beneficiaries to inherit the original cost base and thereby defer recognition of the gain. Appropriate planning is required to obtain this result.

Non-resident individuals may be subject to Canadian tax on death to the extent that they own Taxable Canadian Property (TCP). The most common types of TCP affected by the deemed disposition on death are Canadian real estate and shares in a private corporation owning real estate in Canada.

There is no wealth tax in Canada.

Although there is no estate or inheritance tax per se, many provinces charge a probate fee to validate the deceased’s will and confirm the authority of the estate’s executor or, where no will exists, distribute the assets of the estate according to provincial family law. The probate fee is generally applied to the fair market value of the assets flowing through the will.

Planning opportunities exist to help minimize the tax through joint ownership, trusts, designation of beneficiaries, and other means.

Real estate tax

Are there real estate taxes in Canada?

The sale or other transfer of real estate (including the transfer of shares in real estate companies) is subject to a real estate transfer tax imposed by the province or territory where the real estate is located. Rates vary among provinces. Municipalities also levy annual property taxes on residential, commercial, and industrial real estate.

Sales/VAT tax

Are there sales and/or value-added taxes in Canada?

Canada levies a federal goods and services tax (GST) which is a value-added tax that applies to most goods and services in Canada. The GST rate is 5 percent.

Five provinces (Ontario, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador) have harmonized their provincial sales taxes with the GST to create the harmonized sales tax (HST). The HST applies to the same base of taxable goods and services as the GST. The HST rate is 13 percent in Ontario and 15 percent in New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador.

Three provinces (British Columbia, Saskatchewan and Manitoba) have a provincial sales tax (PST) that generally applies to the sale of goods, and in some cases, intangibles, services insurance contacts. The PST is not a value added tax and is not recoverable. The general PST rates range from 6 percent to 7 percent (up to 20 percent on certain goods).

In addition, the province of Québec applies the provincial Québec Sales Tax (QST) on most goods and services at a rate of 9.975 percent. The QST is also a value-added tax and applies generally the same way as the GST/HST. However, Québec has implemented new QST rules that require certain suppliers of services, intangibles, and in some cases goods, located outside Québec to register under a new simplified QST registration system and collect QST effective 1 January 2019 or 1 September 2019 depending on their specific facts.

In addition to the GST/HST, QST, and PST, some provinces also levy special unrecoverable taxes on certain specific goods and services such as alcohol, fuel, tobacco and insurance.

Unemployment tax

Are there unemployment taxes in Canada?

Employment Insurance (EI) premiums are required to be deducted from an individual’s remuneration if the individual is employed anywhere in Canada and is receiving insurable earnings (generally consists of cash remuneration and certain taxable benefits). There is no age limit for deducting EI premiums. The employer is responsible for withholding and remitting the individual’s portion as well as remitting the employer portion (1.4 times the employee’s contribution) to the CRA. The employee’s premiums are reported on their T4 statement for the relevant calendar year and a portion of those premiums may be claimed as a non-refundable credit on the employee’s Canadian tax return.

Other taxes

Are there additional taxes in Canada that may be relevant to the general assignee? For example, customs tax, excise tax, stamp tax, and so on.  

Other Canadian taxes that may apply are described in the following paragraphs.

Local taxes

Municipal tax (property tax) is assessed on the owner of real property according to the value of the property (generally, the tax is in the range of 1 percent to 2 percent of the property’s assessed value per year). The rates vary among municipalities.

Provincial Health Premiums

Although these are not actual income taxes, the province of Ontario and the Northwest Territories and the Territory of Nunavut levy provincial health premiums on the income of individuals who are subject to income tax in those jurisdictions.

Residents of Ontario are required to pay a Provincial Health Premium as part of their Ontario tax liability, based on their taxable income over CAD20,000 (maximum annual premium is CAD900). The Ontario health premiums are calculated and added to the provincial income taxes calculated on the tax returns of individuals who are residents, or part-year residents, of that province.

Employees who live and/or work in either Nunavut or the Northwest Territories are subject to a Health Tax equal to 2 percent of their taxable remuneration earned from working in either of those two territories, and their employers are responsible for deducting and remitting the health taxes.

Employer Health Tax

The following provinces and territories impose a tax on employers based on the total annual salaries earned by their employees who report to work, or are deemed to report for work, at an office or other permanent location of the employer located within the relevant jurisdiction:

Province/Territory Maximum EHT Rate
   
Ontario 1.95%
Québec 4.26%
British Columbia (new for 2019) 1.95% (See note 1 below)
Manitoba 2.15% (see note 2 below)
Newfoundland and Labrador 2.00% (see note 3 below)

The relevant provincial EHT legislation requires an employer to include the salary of any non- resident employee earned from working in the province with the salaries of the employer’s regular employees who report for work there, even when there is no chargeback to the Canadian company for that salary. The EHT is remitted to the relevant provincial or territorial authority responsible for administering this tax.

1. The British Columbia Employer Health Tax became effective from 1 January 2019 onwards. Annual BC payrolls that total CAD500,000 or less are exempt from this tax. Annual BC payrolls of CAD500,000 to CAD1,500,000 are subject to EHT at 2.925 percent on the portion that exceeds CAD500,000. If the annual BC payrolls exceeds CAD1,500,000, the entire payroll amount for the year is subject to an EHT levy of 1.95 percent with no portion being exempt.

2. For Manitoba, the first CAD1.25 Million of annual payroll is exempt from Health Tax and the next CAD1.25 million is subject to a levy of 4.3 percent. However, if the employer’s total payroll in the province exceeds CAD2.5 million, the entire total payroll in Manitoba is subject to a levy of 2.15 percent, including the first CAD1.25 million.

3. Effective from 1 January 2019 onwards, the first CAD1.3 million of an employer’s total payroll is exempt from the Newfoundland and Labrador Payroll Tax.

Foreign Financial Assets

Is there a requirement to declare/report offshore assets (e.g., foreign financial accounts, securities) to the country/territory's fiscal or banking authorities?

Is there a requirement to declare/report offshore assets (e.g. foreign financial accounts, securities) to the country/jurisdiction's fiscal or banking authorities?

Canadian residents are required to file the following information returns, in addition to their personal income tax returns, if they:

  • own “specified foreign property” (generally, foreign bank and securities accounts, investments in foreign corporations, partnerships and trusts and interests in foreign real estate, except when used solely for recreational purposes by the taxpayer), the total cost of which exceeds CAD100,000 at any time in the tax year (Form T1135)
  • transfer or loan any amount, directly or indirectly, to a non-resident trust or to a controlled foreign affiliate of a non-resident trust (Form T1141)
  • receive distributions from, or are indebted to, non-resident trusts in which they are beneficially interested (Form T1142)
  • have ownership in a non-resident corporation or trust that is a foreign affiliate or a controlled foreign affiliate (Form T1134).

The deadline for filing these annual information returns is generally the same as for the individual's Canadian tax return. Failure to file any of these information returns on a timely basis may result in the assessment of penalties.

A taxpayer is exempt from having to file a T1134, T1135, T1141 or a T1142 in the first year of becoming a resident of Canada provided the taxpayer was never a Canadian resident in any prior year.

The deadline for filing these annual information returns is generally the same as for the individual's Canadian tax return. Failure to file any of these information returns on a timely basis may result in the assessment of penalties.

A taxpayer is exempt from having to file a T1134, T1135, T1141 or a T1142 in the first year of becoming a resident of Canada provided the taxpayer was never a Canadian resident in any prior year.

Immigration

Following is an overview of the concept of Canada’s immigration system for skilled labor.

(E.g. which steps are required, authorities involved, in-country/jurisdiction and foreign consular processes, review/draft flow chart illustrating the process)

This summary provides basic information regarding business visits to, and work authorization for, Canada. This information is of a general nature and should not be relied upon as legal advice.

All foreign nationals who intend to engage in productive employment in Canada will need a Work Permit. There are various categories of work permit available depending on the foreign national’s qualifications and the nature of the work, which vary in their processes and processing times. All foreign nationals who intend to engage in international business activities without directly entering the Canadian labor market may enter Canada as business visitors. For work permit and business visitor applications, foreign nationals must coordinate with their employer to collect and legalize corporate and personal documentation.

Canada distinguishes between Visa Nationals and Non-Visa nationals for entry purposes.

All foreign nationals require a Temporary Resident Visa (“TRV”) to enter Canada, unless their citizenship is of a visa-exempt country/jurisdiction. For example, nationals of China, India, Russia and South Africa require a TRV, while British, Australian, French, and Japanese are visa-exempt. A TRV is an entry document, separate from a status document such as a work permit. A visa national – even if they have a valid status document – will not be granted entry to Canada unless they have a valid TRV.

Visa-exempt nationals, other than citizen of the United States, require an Electronic Travel Authorization (eTA) for travelling to Canada by air. The eTA application is made online and the approval is linked to a specific passport. Normally, the eTA is approved immediately, unless there are potential inadmissibility issues that require additional review.

In most cases foreign nationals are also required to give biometrics if entering Canada to work, study or visit. Biometric data is used to confirm a foreign national’s identity. Biometrics are required by visa-exempt and visa requiring nationals between the ages of 14 and 79. For visa-exempt nationals, biometrics are done at the port of entry. For visa-requiring nationals, biometrics must be completed abroad. Biometrics are valid for a period of up to 10 years.

To be permitted entry to Canada, foreign nationals must not have criminal or medical inadmissibility issues. Specifically, nationals of certain countries/territories are required to provide police clearance certificates. Police clearance certificates are a copy of a foreign national’s criminal record, or a statement that the foreign national does not have a criminal record. Further, an immigration medical examination is required if an individual has lived in certain countries/territories for more than 6 month in the past year, and will be in Canada for more than 6 months or will be working in specific occupations.

International Business Travel/Short-Term Assignments

Describe (a) which nationalities may enter Canada as non-visa national, (b) which activities they may perform and (c) the maximum length of stay.

A business visitor is a foreign national who comes to Canada for international business activities without directly entering the Canadian labor market. These activities may include attending internal meetings, attending conferences, developing new business, etc. A business visitor is not authorized to perform any “hands-on”, productive activities while in Canada.

In order to qualify as a business visitor, the traveler must maintain their position with the foreign employer and should not be paid by the Canadian parent or subsidiary for more than expenses. Under this category, travelers may stay for 6 months from the date of entry, or until the passport expiry – whichever comes first.

Visa-exempt nationals may seek entry directly at the port of entry with proper supporting documentation.

Other than American citizens, visa-exempt nationals must obtain an Electronic Travel Authorization (eTA) in order to enter Canada by commercial airlines.

Describe (a) the regulatory framework for business traveler being visa nationals (especially the applicable visa type), (b) which activities they may perform under this visa type and the (c) maximum length of stay.

A business visitor is a foreign national who comes to Canada for international business activities without directly entering the Canadian labor market. These activities may include attending internal meetings, attending conferences, developing new business, etc. A business visitor is not authorized to perform any “hands-on”, productive activities while in Canada. In order to qualify as a business visitor, the traveler must maintain their position with the foreign employer and should not be paid by the Canadian parent or subsidiary for more than expenses.

Under this category, travelers may stay for 6 months from the date of entry, or until the passport expiry – whichever comes first. Visa-required nationals must submit a Temporary Resident Visa (“TRV”) application at a Canadian Visa Office abroad. A TRV may be issued for up to 10 years and allows multiple entries; however, upon each entry, a foreign national is allowed to stay in Canada for up to 6 months, unless otherwise noted by the Immigration Officer.

Outline the process for obtaining the visa type(s) named above and describe (a) the required documents (including any legalization or translation requirements), (b) process steps, (c) processing time and (d) location of application.

Business Visitor Visa Applications Processed at a Canadian Visa Office Abroad

1. Assessment call with foreign national to determine strategy

2. Gather documents from foreign national for business visitor visa application

3. Prepare business visitor visa application (5 days)

4. Submit business visitor visa application at the Canadian Visa Office Abroad (processing times vary)

Business Visitor Visa Applications Processed at the Port of Entry

1. Assessment call with foreign national to determine strategy

2. Gather documents from foreign national for business visitor visa application

3. Prepare work permit application (5 days)

4. Submit business visitor visa application at the Port of Entry (processed immediately)

GENERAL REQUIREMENTS FOR BUSINESS VISITORS

The following documents need to be provided in either English or French: 

  • Valid passport or travel document that is valid for the applicant’s entire stay in Canada and guarantees their re-entry to their country/jurisdiction of origin; 
  • TRV (if applicable); 
  • eTA (if applicable);
  • Letters of support from parent company and a letter of invitation from the Canadian host business or a Letter of Recognition from Canada Border Services Agency (CBSA); 
  • Agenda of meetings and business activities during time in Canada;  
  • Established purpose for the visit (i.e. Letter of Invitation (LOI) from the Canadian company); 
  • 24-hour contact details of the business host in Canada; and 
  • Proof of sufficient funds for both the stay in Canada and return to country/jurisdiction of origin.

Are there any visa waiver programs or specific visa categories for technical support staff on short-term assignments?

Under Canada’s Global Skills Strategy, certain foreign nationals may be eligible for a short term work permit exemption to work in Canada. Specifically, the technical support staff must be in high-skilled professional occupations. The work duration must be less than 15 or 30 consecutive calendar days. The 15-day exemption is available to an individual once every 6 months, and the 30-day exemption once every 12 months.

Long-Term Assignments

What are the main work permit categories for long-term assignments to Canada? In this context outline whether a local employment contract is required for the specific permit type.

Canadian work permits are typically employer-specific, such that the foreign worker may only work for that particular employer in Canada under specific conditions. If the foreign national is visa-exempt, the work permit application can be made at the port of entry, e.g. the airport or land border. If the foreign national requires a TRV, the application must be submitted online to a Canadian Visa Office abroad. The TRV will be issued together with a work permit approval letter. The actual work permit is issued at the port of entry.

As a default rule, a Canadian employer seeking to hire a foreign national must first obtain a positive Labour Market Impact Assessment (“LMIA”) opinion from Employment and Social Development Canada (“ESDC”). A positive LMIA will show that there is a need for a foreign worker to fill the job, and that no Canadian worker is available to do the job. The employer, in most cases, needs to conduct rigorous recruitment efforts and demonstrate that there are no qualified and willing Canadians or permanent residents to fill the position. ESDC must be satisfied that the employment of the foreign national will have a positive or neutral impact on the Canadian labor market. Once ESDC issues a positive LMIA opinion to the employer, the foreign national can then apply for a work permit either at the port of entry or a visa office abroad. The LMIA application preparation and review process can be fairly lengthy and unpredictable.

In June 2017, EDSC and Immigration, Refugees and Citizenship Canada (IRCC) introduced a secondary stream of the LMIA program – the Global Talent Stream. This stream is intended to offer a responsive and predictable option for Canadian employers to access highly-skilled global talent. Specifically, innovative companies can be referred to ESDC to make applications to hire “unique and specialized” foreign nationals. In addition, it facilitates employers with filling in-demand highly skilled positions that are on the Global Talent Occupations List. The current list primarily includes occupations in the IT sector, such as computer programmer, information systems analyst, and web developer. This list is amended from time to time, as the government engages in ongoing stakeholder discussions.

There are various exemption categories to the LMIA, which are administered under the International Mobility Program. The Canadian employer must first submit an offer of employment through its online Employer Portal and pay a compliance fee. Of particular relevance for multinational corporations are the intra-company transfer exemption categories.

For multinational corporations, the intra-company transfer categories are available for executives/senior managers and for workers who have specialized knowledge. To be eligible, the foreign and Canadian entities must have a qualifying corporate relationship and the employee must have been employed abroad for at least 1 year in the preceding 3 years and will be transferred to Canada in a similar position. In particular, to demonstrate specialized knowledge, the employee must have both proprietary knowledge and an advanced level of expertise. Proprietary knowledge generally refers to company-specific expertise related to a company’s product or services, or the enterprise’s processes and procedures such as its production, research, equipment, techniques or management. An advanced level of expertise means that the specialized knowledge is gained through significant and recent experience with the organization and used by the individual to contribute significantly to the employer’s productivity.

There are certain LMIA-exempt work permit categories made available by Free Trade Agreements between Canada and various countries/territories. For example, under the North American Free Trade Agreement (NAFTA), US and Mexican citizens can work temporarily in Canada if their occupation is on the specified Professionals list and that they meet the education requirements specified for the profession. Similarly, the Canada-South Korea Free Trade Agreement, Canada-Chile Free Trade Agreement, and others, provide for similar work permit categories. Furthermore, the recent Comprehensive Economic and Trade Agreement between Canada and the European Union (CETA) provides for various options for EU nationals to work temporarily in Canada. Similarly, the latest Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) also includes professional mobility provisions and provides for work permit options to nationals of the CPTPP parties to work in Canada.

As mentioned above, visa nationals are required to obtain a Temporary Resident Visa in order to enter Canada. Visa-exempt nationals, other than American citizens, require an Electronic Travel Authorization (eTA) to enter Canada by commercial airlines. The eTA must be obtained prior to travel. Biometrics must also be completed before the work permit issuance.

Provide a general process overview to obtain a work and residence permit for long- term assignments (including processing times and maximum validation of the permit).

Work Permits Processed at a Canadian Visa Office Abroad

1. Gather documents

2. Undergo a medical examination from a panel physician (if required)

3. Obtain police certificates (if required)

4. Submit work permit application to a Canadian Visa Office (processing times vary), however high-skilled applications are processed in 2 weeks in 80 percent of cases)

5. Attend in-person at a local Visa Application Center to provide biometrics data (fingerprints and photograph)

6. Submit passport to the Visa Office for visa issuance

7. Travel to Canada and obtain Work Permit document at the port of entry

Work Permits Processed at the Port of Entry

1. Gather documents

2. Undergo a medical examination from a panel physician (if required)

3. Obtain police certificates (if required)

4. Submit work permit application in person at the Port of Entry (processed immediately)

5. Provide biometrics data (fingerprints and photograph) in person at the port of entry

6. Work Permit document issued immediately

Depending on the work permit type, the maximum validation is 3 years with the possibility of renewing the permit.

Is there a minimum salary requirement to obtain a long term work and residence permit for assignments? Can allowances be taken into account for the salary?

There are minimum wage requirements for certain work permit categories, such as the Labour Market Impact Assessment and Intra-Company Transfer: Specialized Knowledge Workers. Generally, employers must pay foreign nationals wages that meet the “prevailing wage” for the specific occupation in a particular location. For example, if the prevailing wage for an engineer in Toronto, Ontario is CAD37.50 per hour, then the employer must meet that prevailing wage when paying the foreign national. The prevailing wage levels are prescribed by ESDC based on labor market surveys conducted by Statistics Canada.

Is there a fast-track process which could expedite the visa/ work permit?

Yes, as part of the Global Skills Strategy, certain highly skilled foreign nationals applying for work permits outside Canada could be eligible for a 2-week (14 calendar days) processing period. This expedited processing time is not available to everyone, and is only available to certain highly skill foreign nationals.

At what stage is the employee permitted to start working when applying for a long term work and residence permit (assignees/ local hire)?

The employee is permitted to start working only once they have obtained a valid Canadian work permit.

Can a short term permit/ business visa be transferred to a long term permit in Canada?

It is not possible to transfer from business visitor status to a long term work permit holder status. If a foreign national has entered Canada as a business visitor, it is not possible to transfer this status to a work permit. Typically, a work permit must be made outside of Canada.

Is it possible to renew work and residence permits?

The majority of the work permit categories allow renewals, although the total validity duration varies. If the foreign national is in Canada with a valid work permit, they may apply to extend the permit from within Canada.

Is there a quota or system or a labor market test in place?

There is a labor market test process, but there is no quota per se. As a default rule, a Canadian employer seeking to hire a foreign national must first obtain a positive Labour Market Impact Assessment (“LMIA”) opinion from Employment and Social Development Canada (“ESDC”). The employer, in most cases, need to conduct rigorous recruitment efforts to demonstrate that there are no qualified and willing Canadians or permanent residents to fill the position. ESDC must be satisfied that the employment of the foreign national will have a positive or neutral impact on the Canadian labor market.

General Immigration Related Questions

Would it be possible to bring family members to Canada?

Generally, family members (spouse and minor children) may accompany a foreign worker in Canada. They are eligible to obtain visitor status for the duration of their stay in Canada. Entry requirements such as a TRV or eTA, biometrics and criminal and medical admissibility assessments, apply to all accompanying family members.

A dependent spouse is typically eligible for an open work permit and can work for any employer in any occupation. A medical exam is required if the work is in healthcare, childcare, or similar fields. A dependent minor child is eligible to attend primary and secondary school in Canada with a Visitor Record or a Study Permit. A dependent’s status document will be valid for the same duration as the foreign worker’s work permit.

Is it possible to obtain a permanent residence permit?

Generally, there are four programs under which foreign workers can apply for Canadian permanent resident status:

1. Federal Skilled Worker Program (FSWP);

2. Canadian Experience Class (CEC);

3. Provincial Nominee Programs (PNP); or

4. Quebec Experience Class (QEC).

What if circumstances change after the Work and Residence application process (e.g. change of employment or personal situation, including job title, job role or salary)?

Any change in the terms of the employment, including job title, job role or salary may require a new work permit, in order to ensure compliance.

How long can a permit holder leave Canada without their permit becoming invalid?

The duration and validity of a work permit are not affected by the permit holder’s absence from Canada.

Must immigration permissions be cancelled by the end of the assignment/employment?

There is no formal cancellation requirement. For employer-specific work permits, the termination or conclusion of the employment duration with the Canadian employer will invalidate the work permit.

Are there any penalties for individuals and/or companies in place for non-compliance with immigration law?

The consequences for non-compliance with Canadian immigration law are serious for both employers and individuals.

Employers are subject to inspections by immigration authorities to verify that they have complied with the conditions imposed by the immigration regulations. The inspections may be random, or can be triggered by previous non-compliance, adverse publicity, or whistle-blowers. The conditions under inspection include application information accuracy; document retention; foreign worker’s wages, working conditions, and occupation; business legitimacy; and compliance with applicable employment and recruitment laws.

An employer may be subject to a system of Administrative Monetary Penalties for specific conduct that result in non-compliance. Moreover, a non-compliant employer may be banned from hiring foreign workers for a period of 1, 2, 5, or 10 years, or permanently. Employers can also be “black-listed” on the government’s website which publicizes their violations and penalties.

An individual may be deemed inadmissible to Canada for non-compliance with Canadian immigration law. This means that the individual would not be able to visit, reside, or work in Canada. Individuals who are already residing in Canada, but are found to be non-compliant with Canadian immigration law, may be issued a removal order. 

Disclaimer

All information contained in this publication is summarized by KPMG LLP, the Canadian member firm affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity, based on The Income Tax Act (R.S.C., 1985, c.1 , 5th Supp.), The Excise Tax Act (R.S.C., 1985, c. E-15), the Immigration and Refugee Protection Act (S.C. 2001, c.27), and on current information for 2019 regarding personal income tax rates and thresholds, payroll taxes, sales taxes and income tax treaties and social security tax agreements provided by the official websites of the Canada Revenue Agency, the Canadian Department of Finance, Immigration, Refugees and Citizenship Canada, the Ontario Ministry of Finance, the Québec Ministry of Revenue, the British Columbia Department of Finance, the Newfoundland and Labrador Department of Finance, the Nunavut Department of Finance, the Northwest Territories Department of Finance, and the Manitoba Department of Finance.

© 2020 KPMG LLP, a Canada limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity.  Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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