A little-known international mobility program allows U.S. and Mexican nationals easier entry into Canada. As the largest free trade region in the world, the agreement is designed to promote economic growth and increase the standard of living for the nearly half a billion people in North America.
What Is the Canada-United States-Mexico Agreement (CUSMA)?
The Canada-United States-Mexico Agreement (CUSMA) abolishes tariffs and other trade barriers to liberalize trade among the three countries. Formerly the North American Free Trade Agreement (NAFTA), CUSMA contains provisions that allow traders and people setting up businesses more straightforward access to our market.
Specifically, it allows American and Mexican nationals to access the Canadian market, which means they can find employment, set up businesses, or work as a trader or investors under their own companies. And the best part? The entry requirements are much simpler than the traditional labour market impact assessment approach.
CUSMA Provides A Path of Entry
The reciprocal agreement provides an easier path of entry for American and Mexican nationals to do business in Canada. It offers an optional pathway for people from the United States and Mexico to make this country home. Working as a trader or investor in their own company is an optional route of entry that is not so well known. It is similar to a U.S. program which is quite popular among Canadians.
A typical work-based entry approach requires a labour market impact assessment, which can be a complex and laborious process because an employer must demonstrate they tried to recruit Canadian workers but could not find someone with the requisite skill set. However, through CUSMA, companies can hire foreign workers from other North American countries to fill certain occupations or bring transferees from a branch in the U.S. or Mexico to a branch in Canada. This program also allows traders who do most of their business in Canada and investors looking to launch and run a business in Canada through a “substantial” investment to gain entry.
Investment Opportunities through CUSMA
The flexibility of the CUSMA program is its most significant advantage for investors and traders. According to the federal government, CUSMA was designed to encourage investment by limiting market access restrictions on investors.
The agreement provides greater certainty, transparency and protection for investments, and its Investment Chapter offers important guarantees to American and Mexican investors in Canada.
Investors can make a “substantial” investment in Canada to launch and run a business, and traders who do the bulk of their business in Canada can access a Canadian work permit to operate their business under the CUSMA Investor work permit.
There is no stated minimum investment requirement for investors, but the investment must be proportional and substantial. For example, opening a hair salon for $80,000 could qualify as a substantial investment.
However, a 50 per cent interest in a larger business, such as a car dealership, may also qualify as a substantial investment. In this scenario, a Mexican or American national could apply for a work permit to run the business in Canada, and eventually permanent residency in the future. For traders, there is an allowance for those living in the U.S. or Mexico who do more than 50 per cent of their trade in Canada. For example, a videographer whose business primarily comes from Canada can access a Canadian work permit to operate their business here through the CUSMA Trader work permit.
CUSMA Offers A Route To Permanent Residency
These approaches could help pave the way for migration to Canada. Working for their company in an executive position for a year can help newcomers build the points necessary to qualify for permanent residency under Express Entry.
CUSMA offers numerous advantages for American and Mexican nationals looking to work or do business in Canada. It is specifically designed to facilitate trade between the three member countries while promoting economic growth and a higher standard of living. The program provides a more straightforward path to entry than other traditional methods, such as labour market impact assessments. If you are interested in taking advantage of this program and would like to schedule a consultation to explore your options, please contact one of our lawyers for more information.