Our immigration backlog is becoming a serious frustration for foreign companies that want to do more business in Canada.
France-headquartered companies, for instance, are eager to set up shop on Canadian soil or increase their investments in local subsidiaries. But their expansion plans are hitting a snag.
Many of their newly appointed C-suite executives, the very people tapped to expand their Canadian operations, are stuck in limbo because of a work-permit processing backlog at Immigration, Refugees and Citizenship Canada, or IRCC.
Those paperwork delays, which worsened during the COVID-19 pandemic, have already affected up to 10 Fortune 500 companies, according to the France Canada Chamber of Commerce (Ontario), or FCCCO.
Those companies don’t want to be named or speak on the record. But the FCCCO, which represents them, says those businesses operate in various industries, including high fashion, manufacturing and engineering.
Although Canada is not the only country beset by immigration processing delays these days, it’s especially urgent for Ottawa to eliminate our backlog.
Canada has traditionally lagged behind other industrialized countries when it comes to attracting foreign direct investment, or FDI. So, if foreign executives face chronic delays to obtain work permits, future FDI inflows will be put at risk.
“Some of our member companies had new C-suite coming in or appointed, but they could not even come to visit or have a family trip before taking on the formal role,” said Riva Walia, FCCCO’s managing director.
The non-profit organization has a membership of more than 100 companies, including France-headquartered multinationals such as banking giant BNP Paribas, fashion house Chanel and aerospace company Thales Group.
FCCCO partnered with Canadian officials to help find solutions for its members. Some businesses qualified for a special concierge-type immigration service because they were planning significant investments here, Ms. Walia said.
I contacted IRCC to obtain details about that program, but didn’t receive a reply. Ottawa’s inability to provide timely information is part of the problem.
Additionally, a staffing shortage is prolonging delays at a time of increased demand.
IRCC issued more than 349,000 new work permits during the first seven months of this year. That compares to over 199,000 work permits for all of 2021.
Yes, the Trudeau government has vowed to tackle the backlog. But applicants are still waiting far too long for their papers.
As Ms. Walia points out, there’s an opportunity cost for Canada.
“Canada, for French companies, is a door to the Americas and also the next frontier of global expansion,” she said. “A lot of these companies are taking notice of Canada as a serious market – not just as the 51st state.”
Part of the allure is cost arbitrage given the Canadian dollar’s relative weakness to the euro and the U.S. dollar. But French companies also recognize that our country is home to a global talent pool, Ms. Walia said.
Canada, though, needs to maintain a competitive edge.
“There is a global war on top talent,” said Victor Thomas, president and chief executive officer of the Canada-India Business Council. “This talent are going to be where companies are going to invest and expand.”
Indian citizens, he added, have been disproportionately affected by the processing logjam because of the sheer volume of applications.
“As we look for talent, it is important that we streamline this process. And as talent comes into the country, foreign investment can follow,” he added.
Global flows of FDI took a hit in 2020 but rebounded to US$1.58-trillion last year. Canada’s share of FDI inflows was US$60-billion in 2021, according to data from the United Nations Conference on Trade and Development.
“We have all these organizations – Invest in Canada, Invest Ontario, Toronto Global – and they’re all going out selling Canada and doing a really good job. But then they hit the wall of getting people here, processing them,” said Stephen Green, managing partner of Green and Spiegel LLP, Canada’s largest immigration law firm. “Businesses are being affected.”
Knowledge-based companies, in particular, can ill-afford delays because technology evolves at a rapid pace. Prior to the pandemic, Canada’s startup visa program provided quick entry for entrepreneurs but no longer, Mr. Green said.
“By the time you get your work permit, who knows how many other competitors are doing the same thing?”
Ottawa can’t afford to give foreign companies reasons to second guess their investments in our country. More international capital is needed to create jobs, increase productivity and improve our standard of living.
Toward that end, Mr. Green is urging Immigration Minister Sean Fraser to hold a roundtable discussion with business leaders to come up with more solutions to clear the backlog.
There needs to be more effective triaging to process specialized applications, such as those for the startup visa program, Mr. Green said. He also recommends creating an immigration ombudsman to resolve complaints.
“They’ve got to have some real ingenuity now to get rid of this backlog because it’s affecting foreign direct investment.”
He’s absolutely right.