Working Remotely in Canada - A Guide to Canadian Immigration Rules

Remote work has become increasingly common in recent years, particularly during the COVID-19 pandemic when many people had to work from home. In a very short time, companies around the world adapted to having employees doing their jobs online instead of from a desk at the office. Working remotely has now become the norm for many businesses, and many workers have moved to completely different countries, yet continue to work in the same employment - just remotely.

We are often asked about the Canadian immigration requirements for remote work being done by foreign nationals inside Canada, as well as by Canadian permanent residents living abroad.

There are both immigration and tax consequences to consider. In this article, we answer some common questions related to remote work.

Do I Need a Work Permit to Work Remotely in Canada?

Whether you need a work permit to work remotely in Canada depends on the nature of your work and where your employer and clients are located. Here are three different scenarios:

1. Remote work inside Canada for a company and clients based outside Canada. If you are a foreign national working remotely from inside Canada for a foreign company, attending to clients entirely outside of Canada, and are paid by an employer outside of Canada, you are not required to obtain a work permit. In this situation, you are not considered to be entering the Canadian labor market, and you can work as a visitor while inside Canada. Remember though, you will need to extend your visitor status once inside Canada if you plan to stay longer than your initial 6 month entry.
2. Remote work inside Canada for a Canadian company and clients based in Canada. If you are living inside Canada and working remotely for a Canadian company and attending to clients who are based in Canada, you will need a work permit. In this situation, you are considered to be entering the Canadian labor market, and will need to comply with Canadian immigration laws.
3. Remote work abroad for a Canadian company and clients based in Canada. If you are a foreign national working outside of Canada for a Canadian company and attending to clients based in Canada, you will not need a work permit because you are not physically inside of Canada. If you are a Canadian permanent resident, living outside of Canada, performing your work remotely for a Canadian company, you will not be able to use this time towards your PR residency obligation or towards your eligibility for Canadian citizenship.

Will Remote Work Count for Canadian Work Experience?

Whether the hours you accumulate while working remotely in Canada count as Canadian work experience will depend on the nature of your work and whether your clients are located in Canada or abroad. Here are three different scenarios for remote workers hoping to qualify for Canadian permanent residence:

1. Remote work inside Canada for a company and clients based abroad. If you are a foreign national working remotely in Canada for a foreign company located abroad with foreign clients, this work experience does not count as Canadian work experience. These types of remote jobs will not, for example, help you on an Express Entry application where you get points for Canadian experience.
2. Remote work inside Canada for a Canadian company and clients based in Canada. If you are working remotely for a Canadian company and your clients are based in Canada, this work experience will count as Canadian work experience. However, you must be classified as an employee; independent contractors do not count. Your also need have lawful immigration status to do the work, which is most likely a work permit. This work will count as Canadian work experience on a PR application such as the Canadian Experience Class category of Express Entry.
3. Remote work abroad for a Canadian company and clients based in Canada. Foreign nationals who are working outside of Canada for a Canadian business with Canadian clients cannot count this employment as Canadian work experience.

Does Remote Work Count for Provincial Nomination?

Remote work probably will not count for Provincial Nomination. Although working remotely inside Canada for a Canadian company will count as Canadian Work Experience under the federal immigration programs, you may not be able to use that work experience to qualify under a Provincial Nominee program. The reason is that provinces require applicants to both live in the province and work for a company based in the province in order to be eligible for their Provincial Nominee Program (PNP). 

This means if you are working for a company based in one province, but living in another province, you will have to rely upon a federal immigration program to gain Permanent Residence. Some of the PNP programs go as far as to exclude workers who work remotely, even if you are working in the same province where your employer is located. Essentially, you have significantly limited your options for PR with this sort of working arrangement.

Do I Need to Pay Income Tax on Remote Work in Canada?

It is near certain that you will have to pay income taxes to someone, somewhere. We recommend that you speak to your accountant or tax professional to understand the tax implications of working remotely as part of your overall planning. 

If you are working remotely for a company inside Canada, you will likely be subject to Canadian tax laws and regulations, and may need to pay taxes in Canada. However, in any given case, whether remote workers need to pay taxes to the Canada Revenue Agency depends on the nature of the work and their resident status for tax purposes. Here are some important factors to consider:

• Residency status: If you are a Canadian citizen or permanent resident, you will be subject to Canadian income tax laws and will need to pay income taxes on your worldwide income, regardless of where you are working. If you are a foreign national working inside Canada, you will only be subject to Canadian income tax laws on your Canadian-source income, not income sourced from abroad. Both employees and self-employed workers must pay income taxes in Canada.
• Tax treaty: Canada has tax treaties with many countries, including the United States, that avoid double taxation. If you are a U.S. citizen working remotely in Canada, you may be able to claim foreign tax credits to reduce your U.S. tax liability. Check whether a tax treaty exists with your home country, or some other country where you have status for tax purposes, to determine your tax obligations. Where two countries have tax rules affecting you, you need to obtain professional tax advice, as the tax implications are usually pretty technical to navigate.
• Tax deductions: If you are working remotely in Canada and need to pay taxes, you may be able to deduct certain expenses, such as home office expenses, from your taxable income. The rules are fairly complex, but Canada recognizes the home office concept even for employees in the new world of remote work.

Can I Access Public Health Care in Canada while Working Remotely?

Eligibility to access Canada’s public health care system differs from Province to Province. In most cases, if you have a work permit while living in Canada, you will be eligible for public health care coverage in the province of work. However, if you are working remotely without needing a work permit as above, you would not be eligible. Most visitors in Canada are not eligible for public health care.

In all circumstances, ensure that you check the eligibility rules for the Province where you plan to live, as some Provinces will grant health care coverage on the day you arrive, and other Provinces have a waiting period to obtain coverage. It is always a good idea to purchase private insurance coverage for any period of time you will be living in Canada, but not covered by the public health care system here. 

Can I Work Remotely and Meet my PR Residency Obligation?

Permanent residents of Canada are required to maintain a physical presence inside Canada for 2 years in every 5 year period of time, in order to continue to have PR status. There are very limited exceptions whereby days spent working outside of Canada will count towards your residency obligation. 

If you are working outside of Canada for a Canadian corporation or the Canadian government, you are considered to meet your PR residency requirement only if you are assigned to that foreign work location by the employer – the Canadian employer must have made a decision that you are physically required to work outside of Canada in order to accomplish your duties. If your situation is that you have simply chosen to work remotely for a Canadian business in a foreign country for personal reasons, those days will not count towards fulfilling your residency obligation.

Can a US citizen work in Canada remotely?

Yes, the rules for a US citizen to work remotely in Canada are the same as those outlined above. A US citizen can enter Canada as a visitor for 6 months, and if they do not leave before the initial 6 month entry is finished, they will need to apply for an extension of stay as a visitor in order to remain longer. 

Still Keen to Work Remotely in Canada?

Working remotely from Canada can be a great way to enjoy Canada’s quality of life and experience a high degree of independence while still pursuing your career goals. However, it’s important to understand the Canadian immigration requirements for remote work, and ensure that you comply with Canadian taxation laws and regulations.

Just to be aware – immigration and taxation are two different fields and both very specialized in Canada – not many professionals are qualified to advise a person on both. Employees working remotely who wish to know the immigration implications should consult with a Regulated Canadian Immigration Consultant. For the tax implications of your remote work, you will need to consult with a tax specialist. Luckily, many professionals in both fields also work remotely these days, and you should be able to access the advice you need online at a reasonable cost.

At The Way Immigration , we frequently consult with clients regarding the immigration implications of remote work arrangements. We are happy to meet with you and explore whether a work permit will be required and the rules concerning work arrangements that will count for a permanent residence application. If remote employment is an option for you, contact us for Canadian immigration services today and we'll help you to maximize this opportunity for your immigration journey. We are your trusted immigration consultants in Calgary.