For Canadian businesses that are growing insecure about the potential consequences resulting from the re-negotiation of NAFTA, CETA may be an opportunity to diversify ties to the international market. Any changes to NAFTA could have significant consequences to Canadian industries, as the United States is Canada’s largest trading partner. Trump’s America First/Buy American domestic policies are evident in the recent release of the American agenda driving the renegotiations. Trump’s immigration policies have also created uncertainty with respect to issuing work permits and their recognition by border officers.
However the growing uncertainty about the future of NAFTA and what it means for Canadian businesses may be mitigated by a different Agreement. Just two days prior to commencement of the third round of NAFTA renegotiations, Canada entered into a comprehensive trade agreement with the world’s second largest economy, and Canada’s second largest trading partner: the EU.
CETA, the Canadian-European Union Comprehensive Economic Trade Agreement, is a progressive trade deal that aims to reduce or eliminate tariffs by a substantial amount. Presently, only 25% of Canadian goods enter the EU as duty-free. Once the Agreement is in full force, 99% of Canadian goods will be imported as duty-free goods to the EU. Bilateral trade is expected to increase by 20%.
What might be most exciting about CETA is how it will facilitate labour mobility as the Agreement streamlines the process for work permits between the two signatories. CETA has enhanced the ability of temporary workers to enter Canada. For four categories of workers a LMIA will no longer be necessary:
- Key Personnel: including business visitor for investment purposes, investors and intra-corporate transferees
- Contractual Service Providers
- Independent Professionals: including self-employed workers
- Short-Term Business Visitors
Eliminating the requirement for an LMIA will mean that employers are no longer required to advertise their positions in the domestic market for a prolonged period of time. Further, CETA’s elimination of the requirement of a LMIA for these key categories creates certainty for employers that they will be able to hire workers who meet the requirements.
There is no limit to the workers that can come to Canada without an LMIA in these categories. The different categories a employee or professional falls under determines how the long work permit will be granted for, whether it can be extended, and if there is a limit to how many times per year an individual can be a recipient.
Once CETA is fully established Canadian employers will be able to recruit European workers with certainty, and less costs and expedited processes. It is important to note that while CETA has come into force, the national parliaments of all EU member states must still ratify the Agreement in accordance with their domestic requirements.
By: Samantha Hamilton, Student-at-Law