In today’s increasingly mobile world, many immigrants are having trouble meeting the residency requirements to maintain permanent residency.  In what is known as the “2 year out of 5 rule”, permanent residences are required to spend 2 years out of every 5 living in Canada in order to maintain their status. However, there are important exceptions to this rule.  Section 28 of the Immigration and Refugee Protection Act provides that:

Residency obligation

28. (1) A permanent resident must comply with a residency obligation with respect to every five-year period.

Application

(2) The following provisions govern the residency obligation under subsection (1):

(a) a permanent resident complies with the residency obligation with respect to a five-year period if, on each of a total of at least 730 days in that five-year period, they are

(i) physically present in Canada,

(ii) outside Canada accompanying a Canadian citizen who is their spouse or common-law partner or, in the case of a child, their parent,

(iii) outside Canada employed on a full-time basis by a Canadian business or in the federal public administration or the public service of a province,

(iv) outside Canada accompanying a permanent resident who is their spouse or common-law partner or, in the case of a child, their parent and who is employed on a full-time basis by a Canadian business or in the federal public administration or the public service of a province, or

(v) referred to in regulations providing for other means of compliance;

(b) it is sufficient for a permanent resident to demonstrate at examination

(i) if they have been a permanent resident for less than five years, that they will be able to meet the residency obligation in respect of the five-year period immediately after they became a permanent resident;

(ii) if they have been a permanent resident for five years or more, that they have met the residency obligation in respect of the five-year period immediately before the examination; and

(c) a determination by an officer that humanitarian and compassionate considerations relating to a permanent resident, taking into account the best interests of a child directly affected by the determination, justify the retention of permanent resident status overcomes any breach of the residency obligation prior to the determination.

In today’s post I want to discuss what is meant by a “Canadian business”.  Time spent abroad working for a Canadian company counts as time spent in Canada.  The ability to maintain permanent residency while working for a Canadian business abroad has led much confusion, as well as to an explosion of fake businesses. Indeed, the difficulty in determining whether someone has met this requirement is likely one of the main reasons for the dramatic increase in the processing times of renewal permanent residency cards.

The Immigration and Refugee Protection Regulations describe a “Canadian business” as being:

61. (1) Subject to subsection (2), for the purposes of subparagraphs 28(2)(a)(iii) and (iv) of the Act and of this section, a Canadian business is

(a) a corporation that is incorporated under the laws of Canada or of a province and that has an ongoing operation in Canada; (author’s note: this includes not-for-profits)

(b) an enterprise, other than a corporation described in paragraph (a), that has an ongoing operation in Canada and

(i) that is capable of generating revenue and is carried on in anticipation of profit, and

(ii) in which a majority of voting or ownership interests is held by Canadian citizens, permanent residents, or Canadian businesses as defined in this subsection; or

(c) an organization or enterprise created under the laws of Canada or a province.

Exclusion

(2) For greater certainty, a Canadian business does not include a business that serves primarily to allow a permanent resident to comply with their residency obligation while residing outside Canada

In order to rely on this exception, an individual will likely have to produce numerous documents in order to determine whether they are legitimately working abroad for a Canadian business. These documents include the Articles of Incorporation, the Corporate Annual Reports, the Corporation Notice of Assessment, other financial statements, the employee’s employment contract, and a job description.

Given the extremely complicated nature of this exception, it is advised that people seek representation to ensure that all the documents are there. The risk in not doing so is delays in processing, which can greatly hinder the ability to travel.