Citizenship and Immigration Canada introduces wage floor for “Specialized Knowledge” Intra-Company Transferees

wage floor

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A wage floor has been introduced for “Specialized Knowledge” Intra-Company Transfers (ICTs) in Canada. The floor applies to Temporary Foreign Workers (TFWs) who have been transferred to Canada from a foreign affiliate, subsidiary or parent company by way of the general ICT provisions.
The requirement does not apply to workers transferred by way of Free Trade Agreements, such as the NAFTA, or by way of the other transfer categories, such as Reciprocity transfers. The wage floor will be introduced to all new Work Permit applications made under the affected category.

The wage floor has been set at the prevailing wage for the intended occupation and location. Prevailing wage rates are made available to the public and are published online by Employment and Social Development Canada. And while the wage floor represents the minimum wage that can be offered to ICTs, meeting this wage floor is not necessarily determinative. Officers retain the discretionary authority to require higher wage rates than the prevailing wage if they find that the degree of specialization, knowledge and skill of the position demands a higher wage.
While this discretionary authority previously existed, it was often exercised with a degree of deference to the employer.

The introduction of the wage floor for Specialized Knowledge ICTs follows earlier significant changes to Canada’s TFW programs. In April 2013, the government eliminated the Accelerated-Labour Market Opinion program, a program that allowed employers who had previously passed a labour market needs test and agreed to random inspections to hire foreign workers on an accelerated timescale of two weeks or less. Another recent change saw the elimination of the ability of employers to hire foreign workers via the LMO stream and pay them wages of up to 15% below the prevailing wage.

Other recent drastic actions by the Canadian government include the indefinite moratorium introduced on the Canadian Food Industry preventing related business from accessing Canada’s TFW programs, and the elimination of the recruitment and advertising exemption for hiring foreign students trained in Canadian colleges and universities. As outlined in the government’s Economic Action Plan for 2014, these actions are meant to ensure that foreign workers are only brought to Canada to fill acute labour shortages.
They reveal the Canadian government’s growing skepticism of Canadian employers’ ability to act fairly towards prospective Canadian employees in the employment market by attempting to ensure that employers offer qualified citizens and permanent residents of Canada the first chance at employment, ahead of foreign workers.

The legislative and regulatory changes respecting citizenship and immigration law that have been introduced over the past 24 months have enabled the Canadian government to not only carve out a much larger policy space in which it can act, but also increase the frequency and speed in which it puts plans into action.

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