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We will cover the LMIA exempt work permits under the Canadian interests and significant benefit categories, as per the IRPR R205(a) and R204(c). Some of you may know these categories of temporary immigration as C10, C11 or even T13 LMIA exempt codes.
These programs are typically for entrepreneurs, investors and self-employed applicants who demonstrate the ability to create significant benefit for Canada. Even the Startup Visa work permit applicants are considered now under the C10 LMIA exempt work permit category.
Why and how would these types of applications for work permits to come and start your own business or even buy a business in Canada be refused by the IRCC?
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One of the key criteria which the officers look at is this part of the regulation R205(a):
“205 A work permit may be issued under section 200 to a foreign national who intends to perform work that
(a) would create or maintain significant social, cultural or economic benefits or opportunities for Canadian citizens or permanent residents;”
For applicants who are from specific Free-Trade-Agreement countries they can also utilize R205(b)
205 A work permit may be issued under section 200 to a foreign national who intends to perform work that
(b) would create or maintain reciprocal employment of Canadian citizens or permanent residents of Canada in other countries;”
But this is not the subject of our discussion, so we will focus on R205(a) and R205(c) significant benefit for Canadians.
In most refused work permit applications under any of these LMIA exempt work permits, IRCC officers will focus on the ‘significant benefit for Canada’ wording in these regulations, which is why we will review them, and how IRCC officers use them to find ways to refuse you even if you are a genuine investor/entrepreneur.
The specific wording in the instructions for these programs is that is “intended to provide an officer with the flexibility to respond in situations where the employment activities of the foreign national would create or maintain significant social, cultural or economic benefits or opportunities for Canadian citizens, people registered as Indians under the Indian Act or permanent residents.” Sounds pretty simple, but obviously a lot of discretion.
Let’s review a few cases which went to Federal courts that were refused in these categories. This will provide you a better idea of what to watch out for when you’re preparing your application.
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The Officer concluded that Mr/Mrs____ had not demonstrated that he/she met the requirements for a work permit pursuant to section 205(a) of the Regulations, which the Officer noted as “Significant Benefit to Canada” and was not satisfied that she was exempt from an LMIA.
The GCMS notes state that: the application is “for C11 Entrepreneur in [specific province]”; and, according to the business plan, the Applicant proposes to offer residential and commercial home décor products and furnishings imported from [X country]. The GCMS notes also state that “[foreign nationals applying to work for themselves or to operate their own business on a temporary basis must demonstrate that their admission to Canada to operate their business would generate significant economic, social or cultural benefits or opportunities for Canadian citizens or permanent residents pursuant to paragraph R205(a). Given that there will be no products manufactured/supplied from Canada and the job creation is minimal, it is difficult to see the significant benefit to Canada. The business plan provided does not indicate how PA’s [the Applicant] involvement will provide economic stimulus, job creation for Canadians and/or significant benefit to Canada.”
Mr/Mrs___ a resident of [X country], proposed to immigrate to Canada to open a home décor business in [province]. Mr/Mrs planned to lease retail space in [specific neighborhood], hire two staff, and use other local vendors to support her marketing efforts for the business, which would sell imported goods from [X country].
[5] Mr/Mrs was approved as a Provincial Nominee Candidate under PNP work permit stream. (A candidate is not a provincial nominee, rather a potential nominee.) In accordance with the terms and conditions of the program, he/she was required to obtain a temporary work permit from Canada and, upon arrival, reside in the specific province and invest at least $150,000 in an approved business.
Interestingly enough, the applicant did not apply under the T13 LMIA exemption code with the support letter from the province, but rather opted to apply under the C10 ‘significant benefit’ entrepreneur/self-employed LMIA exempt program.
In this case, the application for judicial review was allowed.
What to take away from this refusal case: if you are planning an import business, with no added value in terms of processing the products, or significant size in terms of employment, then the IRCC officers don’t like it. If you are going to participate in the export business, or add value or processing to imported products, then that could have much more significant benefit for the Canadian economy. Even if this case was allowed for judicial review, the whole point is not to be refused the first time you submit your application – otherwise like we all know, a federal court cannot overturn an IRCC officer’s decision, they can just ask IRCC to review the file again and have another officer render a new decision.
Click here to read the full case.
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Here is another case, not specific to C10 or C11, but all about the applicant demonstrating that he/she would perform work that would create or maintain significant social, cultural or economic benefits or opportunities for Canadian citizens as required by Rule 205(a) of the Immigration and Refugee Protection Regulations (Regulations).
The applicant had a business plan to open a bubble tea shop in a specific city/province, He/She applied for a work visa based on an LMIA exemption via a support letter from the province under a Provincial Nominee Program.
While an Officer is required to acknowledge and consider a support letter, there is no requirement for the Officer to agree with it (Shang v Canada (Citizenship and Immigration), 2021 FC 633 at para 68).
Officer’s notes read that the applicant did not provide a specific address for his/her business; his/her business plan was vague with respect to purchasing property; the viability of a bubble tea shop in the specific city and how it would compete with other tea shops; how the applicant would cover the expenses for CPP and EI contributions; and other discrepancies which we won’t get into today as they are not relevant to our topic.
In this case, the application for judicial review was dismissed.
What to take away from this refusal case: you cannot be vague in your business plan or intentions. You need to sign a lease or have a deposit/agreement in place to use it as your business premises. This is a basic requirement we have with all C10, C11, and even C12 applicants with our office. No discrepancies should be allowed in your application or intention to setup in Canada. Why would anyone propose not to pay CPP or EI in their business plan? If you don’t want to as a business owner, don’t pay it for yourself as per allowed CRA regulations, but don’t tell IRCC up front. You can do it afterwards. The business plan and your application indicates your intentions and plans – and as we all know intentions and plans can change any minute. This was a poorly prepared application.
Click here to read the full case.
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Many other refused cases for C10 or C11 also use the following wording in the IRCC officer’s refusal notes:
The business plan acknowledges that there are already X competing nearby businesses (similar offerings of service/product). Of note, while reviewing information available via google maps, within 1-2 blocks, it appears that there are other businesses offering similar products and services nearby not included in the business plan.
Foreign nationals applying to work for themselves or to operate their own business on a temporary basis must demonstrate that their admission to Canada to operate their business would generate significant economic, social, cultural benefits or opportunities for Canadian citizens or permanent residents pursuant to paragraph R205(a). While the establishment of this business is likely to create a viable business for the owner, the services/goods to be provided are not unique - especially when considering the proximity of other, similar businesses nearby. Despite the claim that the company intends to hire highly competent Canadian citizens or Permanent Residents, it is more likely that the establishment of this business [specific business based on application] will create minimal, low-wage job opportunities that are unlikely to benefit Canadian or PR workers or provide significant economic stimulus to the region.
Based on the documents provided, I am not satisfied that the applicant's request to enter Canada as the owner of this business comes within the exceptions of R205(a) and that the issuance of this work permit would generate significant economic, social, or cultural benefit to Canadians or permanent residents; I am not satisfied that the applicant will be providing a unique good or service, that the applicant's work experience will improve the viability of this business, or that this business will create significant job opportunities for Canadians or PR workers.
If you’re planning to immigrate to Canada and you’re looking for some guidance and support, you’re at the right place! We are licensed and we have successfully supported applicants from more than 47 nationalities in terms of studying in Canada, Working, Sponsorship, and Business Immigration. Get a FREE email assessment, click here.
There are two key criteria that you need to understand about such as a refusal for entrepreneurs/investors/self-employed applicants seeking an LMIA exempt work permit:
1: IRCC has a Genuineness Guidance manual for its IRCC officers – which is used to check genuineness of certain types of applications. For example in an offer of employment from an operating Canadian company to a temporary foreign worker, it asks the officers to call and request more info from the employer in Canada to ‘test’ the genuineness’ and validity of the job offer. In cases where the entrepreneur or self-employed is issuing themselves a job offer from their newly established entity, then what do you think the IRCC officer can do? They will scrutinize your business itself and whether it meets the significant benefit test. It’s simple, the focus will shift from you as the applicant, and since there is no Canadian operating business employing you, the focus will be your actual business plans & intentions inside Canada. This is what they have been trained to do and they will do this on every single application.
2: Sometimes it may not be in your favor or beneficial to apply for an LMIA exempt work permit. If you have an operating business inside Canada (either purchased shares or created the business from scratch with your partner and it is running with staff, expenses, and revenues) then sometimes it’s just easier to apply for an owner/operator LMIA (Labour Market Impact Assessment). In this case, the officer can only focus on you (your skill set and work experience, education, language ability) and the genuineness of the job offer. Significant benefit is not in play anymore in these cases.
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There are many applications that are approved, and refused on a daily basis by the IRCC under the C10,C11 and even T13 LMIA exempt work permit categories. We can only suggest you the following advice & tips:
1: Prepare your application & business in detail. Don’t rush it and don’t generalize when you are preparing the application & plans.
2: The more details you put into your application, showing how in depth your research has been, and the more investment you put at ‘risk’ – in terms of having invested, expensed, etc. in making the business operational, the more likely it is you will be approved.
3: You need to spoon-feed the IRCC officer in terms of the regulations under which you are applying and how this business meets the IRPR criteria – such as significant benefit. Whether it’s economic, social or cultural, you need to clearly outline why and how this benefit is created and quote external sources that agree with your findings or the fact that Canada needs this.
4: Last but not least, don’t focus on setting up any business or franchise inside the big cities. The bigger the city the bigger the investment and benefit required. If you go to rural regions or outside the major cities, you have a better chance of proving ‘significant benefit for Canada’ – and again, it is always essential to clearly explain this to the IRCC officer in your submission and application.
If you’re thinking about immigrating whether permanently or temporarily, through Skilled Immigration, LMIA exempt work permits, Free Trade Agreements work permits, Study Visas, Investment, or Family sponsorship - you’re at the right place! Get a FREE email assessment, click here.
