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1 Cross Bord der Survey The Challenges of Cross Border Mobility The Challenges of Cross Bord der Mobility July, This survey explores some of the legal and administrative challenges organizations encounter when transferring employees between Canada and the U.S. and their experiences with frequent business travel between the two countries.
2 About the Canadian Employee Relocation Council The Canadian Employee Relocation Council (CERC) is a not-for-profit organization dedicated to removing barriers that restrict mobility and deployment of human capital, which are vitally important to Canada s future prosperity. Established in 1982, the Council represents the interests of its members on workforce mobility matters. Many of the Council s members are listed in Canada s Financial Post Top 500. Copyright This document or any part thereof, may not be reproduced, stored in a retrieval system or transmitted in any form or by any means without the express prior written consent of the Canadian Employee Relocation Council Canadian Employee Relocation Council (CERC). All rights reserved. Canadian Employee Relocation Council 180 Dundas Street West Suite 1506 Toronto, ON M5G 1Z CERC (2372) Leadership for Workforce Mobility CERC Cross Border Mobility Survey Page 2
3 Participating Organizations The Canadian Employee Relocation Council would like to thank the following organizations for participating in this survey. Agrium Inc. Flynn Canada Agropur Foot Locker, Inc. Air Canada Gap Inc. AkzoNobel Inc. Gardner Denver AMJ Campbell Van Lines (Calgary) Genesis Fertility Centre Anheuser-Busch companies, Inc. Halliburton Group Canada ATCO Power Hatch Ltd. BDO Canada LLP IBI Group Best Buy Canada Ltd. Ingersoll Rand BMO Financial Group JDS Uniphase Corporation Cargill Incorporated Lafarge North America, Inc. Cenovus Energy Inc. LANXESS Inc. Cirque du Soleil Ledcor Industries Inc Citco (Canada) Inc. Lockheed Martin Canada CMHC-Canada Mortgage and lululemon athletica Housing Corporation Manulife Financial CN Matrikon Inc. Coffeen Fricke & Associates, Inc. McGill University Coca Cola Refreshments Moneris Solutions Corel Corporation MWH David Aplin Recruiting National Energy Board Domtar NAV Canada Draftfcb Nexen Inc. EA Canada Nordion Enbridge Inc. Open Text Corporation exp Services Inc. Oracle Fluor Canada Ltd. Passages Relocation Service CERC Cross Border Mobility Survey Page 3
4 Proxime Recruitment Solutions RBC Royal Bank RBH Inc. Rogers Communications Inc. Safeway Inc. SanDisk Corporation Sears Canada Inc Shell Canada Siemens Canada Limited Sigma-Aldrich Stantec Consulting Starbucks Coffee Company State Farm Insurance Companies Suncor Energy Inc. Sun Life Financial TD Bank Financial Group TheMIGroup TransCanada Corporation TransCanada PipeLines Viterra Wells Fargo Acknowledgements Special thanks to Janet L. Bomza, Barrister & Solicitor, Bomza Law Group Immigration Lawyers and to Alan Diner, Partner, Baker & McKenzie LLP. for their generous support in developing this survey. CERC Cross Border Mobility Survey Page 4
5 Introduction The survey was developed in order to gather information about the legal and administrative challenges organizations encounter in transferring employees between Canada and the U.S. and experiences with frequent business travel between the two countries. Results from the survey will be used to develop and support CERC s work in articulating constructive recommendations to the joint Canada / U.S Beyond the Border Working Group established earlier this spring by U.S. President Obama and Canadian Prime Minister Harper to improve trade relations between the two jurisdictions. The Beyond the Border Working Group is mandated to examine and make recommendations that will result in improved trade relations between Canada and the U.S., including the mobility of skilled workers. A total of 75 organizations participated in the survey, which was conducted on-line from June 23 to July 22, All of those organizations participating in the Survey have experience with the movement of personnel between Canada and the U.S. including intra-company transfers, new hires, short term assignments and frequent business travel. Key Findings Virtually all of the respondents, (98 per cent) say they have taken steps to ensure compliance with immigration laws on both sides of the border. This effort to comply includes retaining the services of external professional immigration services and in-house counsel. Although the survey was directed towards identifying challenges in immigration policy and administrative processes controlling entry into either country, there were several comments from survey participants about the need to improve tax rules that are a very burdensome process for employers with cross border activity. CERC Cross Border Mobility Survey Page 5
6 Despite having taken steps to ensure compliance in the management of their cross border transfers and travel, compliance with immigration regulations and differing rules between the two jurisdictions were identified as key challenges. Over three quarters of the respondents found compliance processes difficult to manage when dealing with work permits and visa requirements. A theme throughout the survey, and one supported extensively by comments from participants, is the inconsistency that exists in decision making between border officials. As one participant commented, Currently, it depends on the time of day, the border you cross and which border official you get as to how they interpret the rules. This situation creates frustration and unnecessary red tape in the efficient movement of personnel. The majority (89 per cent) of participants also have employees that travel regularly between Canada and the U.S. for business purposes. While just over one third said delays (unrelated to travel volumes) were rare, most respondents said delays occurred on occasion. This may result from the fact that most of the companies in the survey report having processes in place to ensure compliance. In exploring reasons for delays in processing entry applications, almost three quarters of participants cited inconsistent decision making by inspectors. In more than one instance, respondents cited that delays were because border officials were refusing to accept credit cards for processing fees. When asked about training of officials, almost 60 per cent of respondents felt that officials lacked sufficient training and resources to effectively and expeditiously adjudicate applications of entry. One participant recited a situation where a border officer reportedly told the employee that the North American Free Trade Agreement (NAFTA) was between Canada and Mexico, and did not apply to the U.S. CERC Cross Border Mobility Survey Page 6
7 Approximately one half of the respondents have experience with the NAFTA professional (TN) occupations list. The overall consensus in responses as to the effectiveness of the occupations list is that it is outdated and overly restrictive in today s economy. It is clear that occupations in new and emerging industries cannot be captured in the existing lists. A case in point is the video gaming industry. Another reality is the growing reliance of many companies on industry experts who may not always possess a university degree. Participants offered many suggestions that could improve the occupations list, ranging from strategic marketing personnel to scientific technicians. Recommendations Key recommendations from participants, to facilitate more efficient cross border mobility of skilled workers, focused on the need for improved training of border staff; greater consistency in decision making among officials; improvement and modernization of the TN occupations list; fast tracking and pre-clearance for approved companies; and improved technology to facilitate pre-filing of applications. CERC Cross Border Mobility Survey Page 7
8 Employee Transfers and Assignments Slightly less than 80 per cent or 60 of the 75 participating organizations transfer employees between Canada and the U.S. Participants were asked, In your experience what are the most significant challenges faced when transferring employees between Canada and the U.S.? (Ranked 1-5 where 1 is least challenging and 5 is most challenging) Compliance with Immigration regulations 3.3 Differing rules between the two jurisdictions 3.1 Understanding when a business visa as opposed to a work permit is required under the law 2.9 Access to reliable information on immigration requirements 2.9 Verbatim Comments Several comments were recorded about inconsistencies in decisions rendered by border personnel, or as one participant stated, how they interpret and/or don t interpret the rules/documentation in the same way. Other comments included Currently, it depends on the time of day, the border you cross and which border official you get as to how they interpret the rules. Officers that might not be fully aware of law/requirements, lack of training but most importantly with no business knowledge. The decisions are without appeal and may cause major disruption to business operations. Tax rules and ensuring compliance with varying rules was also cited as a very burdensome process for employers with cross border activity. CERC Cross Border Mobility Survey Page 8
9 Compliance Issues Virtually all of the participants, 98 per cent, have taken steps to ensure compliance with immigration laws on both sides of the border. Most companies have contracted immigration legal services or have access to in-house immigration counsel to ensure compliance with immigration regulations. One organization indicated that moving team members to Canada has been discontinued until we get a better handle on the requirements. Participants were asked When dealing with work permits, visas and immigration requirements how difficult do you find these compliance processes to manage? While 19 per cent responded that compliance processes are not difficult to manage, the majority of participants responded expressing varying levels of difficulty, ranging from somewhat difficult, to very difficult. Eleven per cent of participants were neutral in their response. Participants were also provided with an opportunity to comment on this question. Verbatim Comments One respondent notes, Trying to keep the company compliant, while still meeting the needs of the business is difficult at times. Processing times does not allow us to meet customer obligations at times, which is very frustrating to the business. Cases especially where an LMO is required, are difficult, time consuming, and subject to change. Challenging because of the volume, urgency and demand in cross border travel and the impact to the employee and company. CERC Cross Border Mobility Survey Page 9
10 Cross Border Travel Eighty nine per cent of respondents also have employees that regularly travel between Canada and the U.S. for business purposes. Several general comments were received about the difficulties companies are experiencing with cross border business travel. Verbatim comments Many people travel between the two countries for internal meetings, client meetings, and specific project discussions that may last from a day or two to 2 or 3 weeks. It is complicated for HR/Internal immigration rep to discuss these variations, and almost impossible for line management to understand the variations that take place as a result of this discretionary application of the rules. we are looking at ways to allow employees to cross to the U.S. under our Business Continuity Plan should there be a disaster happen in Toronto or in our specific building. This has not proven to be an easy task. Border Delays While just over just over one third of companies say they rarely experience delays, unrelated to travel volumes, when crossing the Canada U.S. border, delays were experienced on occasion by the majority of companies. Some of the comments about these delays are noted below Participants were asked, What reasons most often cause delays in processing entry into Canada and/ or the U.S.? a. Inconsistent decision making by inspectors 76 % b. Incomplete paperwork /documentation 19% c. Lack of clear guidelines from government agencies on entry provisions and requirements 33 % d. All of the above 24% CERC Cross Border Mobility Survey Page 10
11 Verbatim Comments: At times the officers are not clear on the documents provided for the visa petition/travel documents. It would be beneficial to have a separate group who could contact our organization to clarify the details, rather than deny entry. A border official will demand a document that is not required and not listed as a required document. A border official may request cash only, when it is very clearly stated they accept credit card as well. Recently, immigration no longer accepts credit cards for processing fees. We were not aware and an employee was turned back You just never know what to expect, even if they have all documents required, problems still surface. Participants were asked In your experience do you feel that inspectors and border officials have sufficient training and resources to effectively and expeditiously adjudicate applications of entry? While 43 per cent of respondents feel that training and resources are sufficient, 57 per cent say improvements are needed. There were several comments received relating to this question, which appear to be equally balanced between both U.S. and Canadian border officials. There also appears to be genuine recognition of the challenges officials encounter and, as one respondent noted, keeping up with the various changes to rules and requirements would be challenging for even the most experienced inspectors. However the overall sentiment is that training is lacking and decisions are inconsistent. CERC Cross Border Mobility Survey Page 11
12 Verbatim Comments: One situation was experienced in Vancouver airport where the border officer actually did not realize that an application under NAFTA was valid! He initially made a comment about NAFTA not applying between Canada and the USA but rather was related to Mexico!! They are well trained but they are not consistent and different border stations have different reputations of being easier to deal with than others. To have the level of authority vested in these officers, without proper knowledge, can have disastrous impacts on our people and our business! Find that the decisions vary for no particular reason. there are many inconsistencies. I have especially seen this in application of the NAFTA job classifications for TN visas. Maybe it's just general attitude by custom's officials... made to feel you are a criminal. If entering legitimately, it should not be so. Both governing bodies need to come to a resolution on the requirements and process that will be scalable and sustainable as opposed to the current ad hoc knee jerk reactionary process that we live with today. NAFTA Occupations List Just under one half (49 per cent) of the participating organizations have transferring and or temporary entry employees in occupations that are not listed in the NAFTA Professional (TN) occupation list, which makes it difficult for companies to meet business objectives. Comments about this situation and the challenges with the existing list indicate the current challenges of using a list that has not been updated to reflect the realities of today s modern economy and labour markets. Respondents are clear that the list is outdated vis-a-vis the types of occupations in today s economy. Participants were asked to identify any definitions, categories or classifications that can be clarified, and or modernized in the NAFTA Professional (TN) CERC Cross Border Mobility Survey Page 12
13 occupation list? Suggestions to modernize the current list of occupations included: Strategic Marketing and Business Development, Construction Managers Project Managers Project Schedulers Project Planners Procurement Professionals (Buyers, Expediters, Material Control specialists) Marketing Human Resources Product Management Management Consultants Computer Systems Analysts Scientific Technicians After Sales/ Leasing Services Suggestions also included the need to recognize occupations that require specialized knowledge and training rather than the requirement to have a university or college degree. Verbatim Comments The list is very restrictive and feels somewhat out-dated to the types of occupations in today's companies. The list of professions is very limited and we can only use 1 out of all of them for the video game industry. Some of our employees do not have a degree and have not been allowed to transfer to the US because of this even though they are an expert in their field. with the elimination of the IT worker program and the increased use of the ICT category, I think the ICT category needs to be better defined as there are inconsistencies in terms of how it is applied. CERC Cross Border Mobility Survey Page 13
14 In addition to the occupations list, challenges with salary information were also highlighted by the following comment. I think clearly defining whether there is a minimum salary requirement and how that salary is determined is key. For example, do we need to use government issued salary levels which are often very different from what a company actually pays or can we use market surveys or internal data ranges? Recommendations for improvement Participants were invited to provide any further suggestions the Canadian and U.S. governments could take to improve the processes that facilitate cross border mobility of skilled workers. There were several themes throughout the responses that support the need for improved training of staff, both in terms of customer service and application of the regulations. Participants called for; greater consistency in decision making among border officials; updating the classifications and professions that are included in the NAFTA list of occupations; and improvements in the application processing time for labour market opinions. Several comments noted the need to develop a preferred employer list, which recognizes companies with a track record of compliance that would allow for more flexibility for those companies and a pre-assessed pass, subject to audit, for companies that meet pre-established requirements. Several comments were also received around the increased use of technology with features such as online processes for pre-filing of applications, and preapproved labour market opinions for companies in compliance. CERC Cross Border Mobility Survey Page 14
15 There were also recommendations calling for better consistency around tax issues, which is the biggest issue we face, between Canada and the U.S. Verbatim Comments Better training for Border officials. They have a lot of power, and as a result some of the officials stick to their own rules and make up things rather than checking with someone. As a result we could stand to lose millions in project work because we cannot get our internal talent across the border to assist with projects we may have. I actually find the border officials in the US better trained that the CA border officials. I am also suspicious when some of the CA border officials make statements like they don't like processing work permits. Obtaining a Soc Sec (Social Security) number is a huge challenge for us in the U.S. since you have to remain on U.S. soil until the number is obtained. Sometimes our employees are told that the border official will only accept cash. Taxation is the biggest issue we face. Better consistency between the two countries would be helpful. The entire response time for LMO's desperately needs to improve as it is very difficult to hire international talent without having to wait to get an LMO. Some border officials want to have the NAFTA and intercompany letters addressed directly to them when it clearly states the letter showing the terms of their temporary employment and should be addressed to the employee? Train the border officers that the people who come to them with a complete application packet supported by a recognized corporation are the desired type of applicant and should not be treated with a hostile manner. Bottom line more education and accountability of the border officials is required to ensure the process is improved, and the NAFTA list of professionals needs to be updated. Just clarity! CERC Cross Border Mobility Survey Page 15
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