The Comprehensive Economic and Trade Agreement (“CETA” or the “Agreement”), arguably the most significant trade deal Canada has negotiated since the North American Free Trade Agreement (“NAFTA”), is set to come into force as early as May of this year. Of the benefits projected to come out of the Agreement is improved labour mobility both into and out of the negotiating parties’ countries. This Agreement represents a significant opportunity for Canadian employers, and accordingly businesses should ensure they understand how they can benefit from the business opportunities expected to flow from CETA’s implementation.
Brief History of the Agreement
CETA is the result of over seven years of negotiations between Canada and the European Union (“EU”). In 2008, Canada and the European Union (the “EU”) issued a joint study supporting the launch of free-trade negotiations between the EU and Canada, and in September, 2014 a completed draft Agreement was released and began inching its way through both the Canadian and EU’s government approval systems.
On February 15, 2017, the European Parliament gave consent for the Agreement to apply provisionally, and in Canada, Bill C-30 – the bill responsible for introducing the Agreement – has received third reading before the House of Commons and second reading before the Senate. Once Canada’s Parliament passes the Bill and its related legislation is proclaimed into force, most components of CETA that will affect Canadian and EU businesses will apply provisionally. However, twenty-seven of the twenty-eight EU member countries that have agreed to hold ratification votes must approve the Agreement before it formally comes into force. Political events, including the United Kingdom’s recent decision to exit the EU, will be therefore be critical in deciding CETA’s fate.
CETA’s Labour Mobility Provisions
In terms of its labour mobility provisions, the impetus for CETA came, in part, from complaints made by Canadian businesses regarding the red tape associated with sending workers to EU countries via work permits and visas, including long application processing times, confusing application requirements, and difficulty in having professional qualifications recognized.
CETA aims to facilitate the mobility of labour between Canada and the EU in two key ways: a) through the temporary entry and stay of natural persons for business purposes, and b) through the mutual recognition of professional qualifications. Ultimately, CETA is expected to make it easier for Canadian businesses to tap into the EU market.
A) Temporary Entry
Presently, Canadian immigration legislation generally limits the entry of foreign workers by requiring Canadian based employers to apply to Employment and Social Development Canada for a Labour Market Impact Assessment (LMIA). This application is filed in advance of any application for a work permit, and generally involves a long and tedious process which demands, among other requirements, a period of advertising and a demonstration that no qualified Canadians or permanent residents are available to take the job in question.
CETA is expected to alleviate this “LMIA hurdle” for many circumstances through providing rights of entry for four defined categories of workers, with varying permitted lengths of stay:
- “Key Personnel”, which includes business visitors for investment purposes, investors and intra-corporate transferees;
- “Contractual Service Providers”;
- “Independent Professionals”;
- “Short-term Business Visitors”.
Of note is the inclusion of independent professionals in this list. Unlike under other free trade agreements (“FTAs”) including NAFTA, CETA will allow for the immigration of self-employed workers despite the lack of an employer-related connection to their host country.
Also of interest is that, when it comes to the immigration of “Key Personnel”, “Contractual Service Providers” and “Independent Professionals”, Canada and the EU have committed to not limiting, via numerical standards or economic needs tests, the number of these types of workers who can cross between party borders. In addition, business visitors for investment purposes will not be required to have a work permit under CETA unless they engage in direct transactions with the public or receive remuneration from a source within the host country.
CETA’s temporary entry and stay provisions do not cover general labour or low-skilled jobs, permanent employment, citizenship, residency, or any visa requirements.
B) Professional Qualification Recognition
CETA also establishes a detailed and streamlined structure for the negotiation of mutual recognition agreements (MRAs) between Canadian and EU regulators and/or professional bodies. While professional bodies are not obliged by CETA to negotiate such agreements, CETA provides a framework to allow the parties to negotiate such agreements on an expedited basis and along an efficient platform. When an MRA is signed by the relevant regulators and/or professional bodies, and found to be consistent with obligations under CETA, the MRA will become binding and subject to the dispute settlement provisions of the Agreement.
While in past FTAs, including NAFTA, there has been a focus on encouraging the development of MRAs between regulators and/or professional bodies, the MRA provisions in CETA take an unprecedented approach to encouraging these agreements by creating substantive and binding provisions on the mutual recognition of professional qualifications. The MRA provisions in CETA will recognize the roles and relationships of regulators while tailoring the role of government to offer support and oversight in the negotiation process.
Lessons for Employers
CETA promises to commit Canada and the EU to a range of measures designed to enhance the ability of business persons to move across borders, and as a result, Canadian businesses will enjoy more certainty with respect to, for example, recruiting EU workers, establishing branches in the EU, bidding on EU service contracts and providing installation and maintenance services for goods sold in the EU. Canadian employers should ensure that they fully understand the labour mobility provisions in CETA and how to seize the opportunities CETA will offer. Following CETA’s provisional implementation, Sultan Employment Law and Workplace Immigration will publish a comprehensive guideline for employers addressing CETA’s labour mobility provisions.
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