Managing Your Canadian Resident Status: The Employment Option

In what I have always seen as an ironic twist, the first question often asked by many of my newly immigrated clients is, “how do I go back to my home country but keep my Canadian PR status?”

Section 28 of the Immigration and Refugee Protection Act, requires a permanent resident of Canada to comply with the “residency obligation” on an ongoing basis, so long as that person wishes to retain their permanent resident status. The basic rule is that the residency obligation can be satisfied as long as a permanent resident complies with at least one (or a combination of two or more) residency obligation “option” for 730 days in every five year period. The options range from physical presence in Canada to accompanying a Canadian citizen spouse outside of Canada and humanitarian and compassionate grounds as a last resort.

The option getting the most attention these days is the employment option. If a permanent resident accepts is employed on a full-time basis by a Canadian business and that employment requires the permanent resident to spend time outside of Canada’s borders, those days spent employed under such conditions will count towards the 730 day residency requirement. Sound simple? It isn’t.

The first challenge is determining whether or not the Canadian employer meets the definition of “Canadian business.” A Canadian business is defined three different ways. First, a business is a Canadian business if it incorporated in Canada and has an ongoing operation in Canada. If it isn’t incorporated in Canada, the business can be some other form of enterprise (a partnership, for example), that has an ongoing operation in Canada, is capable of generating revenue in anticipation of earning a profit, and where the majority of the controlling parties of the enterprise are either Canadian citizens, permanent residents or a business that meets the definition of “Canadian business”. The third alternative is an organization created by the laws of Canada or a province. This third group is designed to cover off public sector employees.

Organizations or companies which are set up for the primary purpose of allowing a permanent resident to comply with the residency obligation are excluded from the definition of “Canadian business”.

The second challenge is determining whether the employment satisfies the definition of “employed on a full-time basis by a Canadian business.” To satisfy this requirement a permanent resident must be an employee of a Canadian business or under contract to provide services to a Canadian business for at least 37.5 hours per week (to be safe as full time is not clearly defined in the regulations) where either the permanent resident’s position is outside of Canada working for either the Canadian business directly, an enterprise affiliated with the Canadian business or a client of the Canadian business.

If a permanent resident is certain that his or her employment outside of Canada will satisfy these definitions, that person’s spouse and/or dependent children who are permanent residents and will also get credit towards the 730 day residency obligation for every day that they are accompany the permanent resident outside of Canada.

The third challenge is proving compliance. I strongly encourage permanent residents to keep meticulous records of their employment outside of Canada as when applying for a new permanent resident card, a permanent resident may be called upon for proof of employment. Although there is no definitive list of required documents, I generally advise people to keep pay stubs, bank records, employment contracts, documents evidencing the assignment of the permanent resident to the position outside of Canada, time sheets, tax records, correspondence with the Canadian business, e-mails, passport stamps, airline tickets (boarding passes) and any other documentation unique to their employment which could assist in the analysis.

This area of residency obligation requirement is closely scrutinized by Citizenship and Immigration Canada. As such, one is strongly encouraged to seek qualified advice prior to accepting employment overseas after becoming a permanent resident of Canada.