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Servicing Machinery for Canadian Clients

[UPDATE] Also, see information on new provisions for repairs of out of warranty equipment.

A frequent source of frustration for foreign equipment and machinery manufacturers is the ability to carry out installation and quick repairs for Canadian customers. In some cases, such repairs are done within the sales warranty, an extended warranty negotiated separately, or outside of warranty or on a scheduled basis. There are differing implications for these various circumstances.

When specialized commercial equipment is manufactured and sold or leased by a foreign company, the initial installation, commissioning, and training work that is a direct component of that sale is permissible in the absence of a work permit under provisions concerning business visitors. Commercial software sales and upgrades can fall into this category. In either circumstance, training Canadians on the use of the equipment or software is permissible under these same provisions.

Certain exceptions to the business visitor provisions exists. The relevant work may not include hands on building or construction work ordinarily performed by a Trade. Also, it may not include any work that touches on the fabric of any structure. For software sales or lease, the work may not entail any production of software taking place within Canada. Operation of the equipment or software (other than in the course of commissioning) is not permissible under these provisions. Finally, if any of this work, for any type of equipment, is negotiated separately from the original sale agreement or an appendix thereof, then the business visitor provisions may not apply.

Once installed, repairs or modifications may sometimes be required within a warranty that was negotiated as part of the original sale agreement. In these cases, the same business visitor provisions can ordinarily be used for the admission of a foreign worker, with the same exceptions as stated above.

There are various methods of processing these business visitor cases. In some cases, the application may be processed at a port of entry, which offers great speed but carries the risk that the foreign worker arrives at the port of entry without knowledge that admission will occur. With a well presented case, this risk can be minimized, but there are also methods of having processing occur prior to such arrival at the port of entry, which may include an application to centralized processing offices within Canada or application for overseas processing at a visa office. Depending on the nationality of the candidate, if port of entry processing is not an option, only the visa office approach may be viable.

If repairs or modifications are needed later in the life of the equipment or systems, then the business visitor provisions may no longer apply. This may include emergency repairs or scheduled maintenance, and would apply to extended warranties that are negotiated outside of the original sale. In these cases, a work permit will have to be secured for the admission of any foreign worker carrying out this repairs or maintenance. It is important to consider that this requirement is not based on the duration of work in Canada; even a single day’s work may be subject to the need for a work permit.

In most cases, in order to be able to secure the work permit, it will be necessary for the foreign company to first obtain a Labour Market Opinion (LMO) from the Canadian government. A LMO is demonstration to the Canadian government that the admission of a foreign worker will not have a negative impact on the Canadian labour market. It would typically be necessary to be able to satisfy the government, in these cases, that there is sufficient specialized skill that is needed to carry out the repairs or maintenance. Other factors such as the impact to the labour force of the Canadian customer may be a consideration as well.

A common complaint of foreign companies seeking LMO approvals is that the process is longer than the Canadian customer is willing to tolerate. First, it is important to consider that there are methods to expedite the processing of a LMO application and, when such expedition is granted, the process of obtaining approval may be dramatically quicker than the standard delays. Beyond this, it is also possible to consider alternative provisions by which an exemption from the LMO may be possible. There are various strategies that may be considered for such exemptions, which may include various Free Trade Agreements or Intra-Company-Transfer. When exemption is possible, it offers a significant advantage; realistically, the majority of cases will not benefit from exemption.

Once a LMO is obtained or if a LMO exemption is available, then the next step is to proceed to secure the work permit itself. The same methods of processing as described above for the business visitor application (i.e., port of entry, centralized processing office, or visa office) would exist.

If your company needs to secure the admission of employees to install or service equipment or software, you may contact us for further guidance.

 

Date Posted: December 17, 2013 Posted In: Business Visitor,Labour Market Opinion,Temporary Work Permits

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