CIMM – NextStar / Stellantis / LG Energy Solution – December 05, 2023
Key Facts And Figures
In the spring of 2022 the Government of Canada, the Government of Ontario, LG Energy Solutions Ltd (LGES) and Stellantis N.V (Stellantis) announced a major investment project with the creation of Canada’s first large-scale domestic electric vehicle battery facility in Windsor, Ontario. The facility is expected to be operational by 2025 and create 2,500 jobs, in addition to more than 2,000 jobs during the construction phase.
LGES is a Korea-based company mainly engaged in the development of lithium-ion battery materials and next-generation batteries. The company also engages in the electric vehicle and energy storage system battery industries through its energy solution segment. Stellantis is an automotive company.
NextStar Energy Inc (NextStar) is a joint venture between LGES (51% of the project share) and Stellantis (49%). A significant investment of approximately $15B has been made in this project at the federal and provincial level.
Concerns were raised that Korean nationals who are currently working at the battery manufacturing facilities, and those expected to arrive in the coming years, may be doing work that can be performed by a local labour force.
As established in the Immigration and Refugee Protection Regulations (R186(a)), applicants seeking entry to Canada as business visitors may be admitted to Canada to engage in specific international business activities. These visitors do not enter the Canadian labour market and their main source of income and profit is outside Canada. This provision is also enshrined in all of Canada’s Free Trade Agreement (FTA) labour mobility provisions. There is no language requirement to enter as a business visitor. Examples of activities that can be carried out by business visitors include: attending company meetings, receiving training for a Canadian parent company, or providing after-sales services/installation as part of sales agreements.
Business visitors should have all relevant documents on hand to present to an officer when seeking entry to Canada, including letters of support from the business visitor’s employer and a letter of invitation from the Canadian host business.
Foreign nationals can also apply to enter Canada to work with a work permit under the International Mobility Program (IMP) as intra-company transferees (ICT) (R205(a); R204(a)). This provision is also included in FTAs, including the agreement with Korea (more information below). These workers must be employed by the sending organization, which is affiliated with the host. There are two main streams within ICT: 1) executive/manager, and 2) specialized knowledge workers. For the latter, the individual must prove that they possess advanced proprietary knowledge and an advanced level of expertise.
Key Messages
In 2023, IRCC processed fewer than 100 work permits for individuals destined to work in Canada on behalf of NextStar and some of their supporting companies involved in the development of the Windsor facility. These figures do not include business visitors, who may enter Canada to provide after-sales service as part of a sale, lease or warranty contract.
Work permits issued to date have largely been intra-company transferees, some of which are in accordance with the terms of the Canada-Korea Free Trade Agreement (CKFTA), that are needed to establish and develop the brand-new facility and provide their knowledge and expertise to the Canadian workforce.
Intra-company transferees are a regular part of doing business in Canada, and help to ensure the efficient flow of knowledge and capital into Canada. In 2023 to date, approximately 22,000 work permits for intra-company transferees have been issued.
Over the last five years, an average of 110 highly-skilled South Korean professionals and intra-company transfers have been authorized each year to work in Canada using the CKFTA labour mobility provisions. These have included, among others, executives, senior managers in finance and communications, engineers, chemists, management consultants, and architects.
FTAs, such as the CKFTA, represent a core element of the broader strategy to advance Canadian interests and values abroad. Specific to the labour mobility dimensions of which, reciprocity is key.
The labour mobility access that Canada agrees to provide to a partner through a trade agreement will be similarly gained by Canada abroad. This is preferential access that Canadians and Canadian businesses can use to apply their expertise abroad, to invest in or purchase a new operation, and to more seamlessly transfer knowledge across a corporate network. Ultimately, this represents a significant competitive advantage for Canadians.
More than 13K work permits were approved for nationals of Canada’s FTA partners in 2022, representing approximately 2% of the IMP. Nearly 76% of these went to Americans and Mexicans under the Canada-United States-Mexico Agreement. South Koreans ranked 9th overall on the list, tied with Peru and just above Germany.
Top occupations for workers under FTA labour mobility provisions include business professionals, graphic designers, mechanical engineers, computer analysts, and managers in finance and communications.
All employers bringing foreign nationals on employer-specific work permits under the IMP, intra-company transfers in this case, are subject to the employer compliance regime. Immigration-related violations such as foreign nationals working in Canada without authorization can be reported to the Canada Border Service Agency Border Watch Line.
Supplementary Information
IRCC Engagement with Employer:
A meeting was held between executives from LGES, Invest in Canada and IRCC on October 5, 2023. During that meeting the company indicated that a number of third-party employees would come to the port of entry as business visitors for installations after purchase.
NextStar advised that as equipment is delivered in Canada, specialized technicians and managers will be required to enter Canada during the installation process and transition. Given the sheer scale of the project, they expect a total of 1,600 individuals to contribute to the project in varying capacities over time.
On November 1, 2023, IRCC again met with executives from NextStar. They indicated they are primarily bringing individuals from LGES and other suppliers to provide after sales installation and support at this stage of construction.
On November 22, 2023, IRCC and ISED representatives met with NextStar executives and details were shared on the 1,600 individuals required for machine installations:
These individuals are not NextStar employees, but rather employees from suppliers from Korea, Japan, European countries, and potentially United States nationals.
Among the 1,600 individuals, up to 900 will be foreign nationals and the remainder will be local workers. They will be handling specialized equipment for the plant including: transportation on site, installation, commissioning, site acceptance tests, and local training.
They stressed that to avoid any liability, it is important that sophisticated and proprietary technology be delivered and installed by the supplier. Non-specialized work (piping, electrical work, etc.) will be done by the local workforce.
NextStar expects that the majority of the 900 foreign nationals will be coming in as business visitors and will not require work permits, and some will be required to enter multiple times.
