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Ontario Domestic Content Requirements - Challenges Facing Foreign Workers

August 02, 2011

On May 14, 2009, the Province of Ontario legislature enacted the Green Energy and Green Economy Act, 2009 (the “Green Energy Act”). As a result, the Ontario Government has received a deluge of applications for new solar and wind energy projects from both domestic and foreign renewable energy companies. The enactment of the Green Energy Act has made Ontario an attractive destination for foreign companies specializing in wind and solar energy, and in particular engineering, procurement and construction (EPC) companies, eager to participate in Ontario’s latest initiative towards becoming the top renewable energy jurisdiction in North America.

However, in accordance with the Green Energy Act, the Ontario Power Authority also introduced minimum domestic content requirements for Feed-in Tariff (FIT) and microFIT (equal to or less than 10 kW) contracts in order to foster growth in Ontario’s green manufacturing, construction and installation sectors. As a result, holders of FIT contracts must ensure that a minimum percentage of their goods and services for their FIT and microFIT projects originate from Ontario. At present, for example, the minimum required domestic content level is 60 per cent for both FIT and microFIT solar projects.

Ontario’s domestic content requirements also affect onsite labour, with the proviso that any onsite labour must be performed by individuals resident (defined as being ordinarily resident) in Ontario, provided that no more than five per cent of the total person-hours of all such labour is performed by individuals that are not resident in Ontario. Thus, it will be necessary for FIT and microFIT contract holders to engage the services of local workers resident in Ontario; However, the question of what falls within the five per cent exemption is something which should be understood fully prior to operating in Canada. Furthermore, consideration should be given to other exemptions that may allow the foreign workers to engage in work on a renewable energy project in Ontario.

For instance, a foreign worker working in Canada on a valid work permit for three-years can be considered ordinarily resident in Canada and therefore should not be counted toward the domestic content requirement. Conversely, in situations where a foreign worker’s presence in Canada would not justify obtaining a work permit, such as short assignments pertaining to the operation, optimization or maintenance of the Canadian project, these workers will be subject to the domestic content requirements. Therefore, indentifying a candidate pool and having each worker’s eligibility and role assessed is of extreme importance before sending them to Ontario.

Often times a company may in fact meet the domestic content requirements without actually knowing it. Having a firm understanding of domestic content requirements and business immigration, and how they may affect a company’s eligibility under the FIT and microFIT programs can effectively reduce time, preparation and the cost associated with the development a renewable energy project in Ontario.  

We encourage companies seeking to send their foreign workers to Canada for the purpose of having them engage in renewable energy projects to contact us for a preliminary assessment.

Tags: Canadian Business Immigration


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