maternity leave outside of Canada / EI / CCTB / PR renewal

[naoyazwife]

Hi everyone,
first of all thank you for taking the time to read this. it's going to be lengthy and a little bit complicated, hopefully someone can answer this for me.
I've called the CRA, visited Services Canada office with EI questions and also spoken to an agent with Citizenship and Immigration Canada, and I'm not getting a clear answer as so many factors are involved.

Me and my husband landed in April 20th 2013. I have been working full time and will be meeting my 730 days PR renewal residency obligation in a few months because I have been out of the country on vacations each year. My husband was also working full time until early last year, he decided to start a new business with a Canadian partner and they have setup a corporation. The only thing is, it's an import export company and he has been spending most of last year setting up the other side of the business in Thailand. It seems he will be in Thailand more and from using the calculator, he still needs 317 more days. Technically, we still have alot of time to meet the obligation as we still have approx 3 years to go until our PR cards expire.

We are expecting a baby, due on May 11th 2015. I will be on maternity leave for a year, which I intend to fly out with the baby and stay in Thailand with my husband. He has already spent most of the time during my pregnancy time in Thailand, I dont want to raise a newborn by myself in Canada so I have made the decision to take my maternity leave in Thailand. Depending on how his business in Thailand turns out, we could all be back to Vancouver, or I come back just with the baby when my maternity leave is done, or we all stay in Thailand. After the baby is born in May, we intend to fly out to Thailand around end of July.

Tax: for myself, 2015 and early 2016 I will have EI income. I will start my maternity leave starting April 27th. I have confirmed with Services Canada that I am allowed to leave Canada while receiving EI (no matter how long I am gone for, as long as I notify them before I leave), and it's only because I'm on maternity/parental leave until April 2016. My first intention is to come back to Canada after my one year maternity leave is done so I am assuming I can still receive Child Care Tax Benefits while I am on maternity leave. I will still be filing income tax as if I had never left Canada, because my every intention is to come back from maternity leave. For my husband, he will probably file his tax as resident as he has had some employment income before starting his own business in 2014. For 2015 and onwards, depending on his new business, he will have to file his tax as non-resident. Please correct me if I'm wrong.
If though, for any reason that I decide to stay with my husband in Thailand and cannot come back after my maternity leave is up, I will probably file income tax as resident with the EI income I received from Jan - April 2016. And inform CRA that I will not be returning for awhile, in which case then the CCTB will stop at that point. I guess I will also have to inform MSP that we are not coming back too? I will probably not work in Thailand so I will have zero income, will I still need to file income tax for 2017?

PR renewal: Ofcourse until 2018 when our PR cards expire, my husband will make frequent trips and make sure he meets the 730 days of being physically inside Canada.
My original intention was to stay until October (that's the earliest I can apply for Canadian citizenship) and then take a trip to Thailand to see my husband but Immigration confirmed for me today that starting June 19th the law will change so I won't even be eligible to apply for the citizenship for another year. So our short term goal is for my husband to come to Canada back and forth and stay here for 317 more days to meet the residency obligation, renew our PR cards together before the expiry date in April 2018. Ofcourse, our child will be already Canadian since she will be born here. I am not sure if he continues to work there and I do not come back to Canada after my maternity leave (even though I have already met the 730 days requirement) if he will have any problems renewing his PR card because during our stay in Thailand our income tax filing would have been as non-residents, at least mine will be non-resident for 2017 and 2018.

In any case that he cannot come back to stay 317 more days in Canada, I'm not sure if the days he spends working in Thailand can count as "full-time employment to a Canadian business abroad", as technically the business he is starting up in Thailand is a part of his business in Canada. I am not sure how to prove it as it is sort of self employment. His business partner has Canadian citizenship and he owns half of the business, I am not sure if he can write a letter to confirm my husband's employment? So far the company is still being registered in Thailand and both sides (Thailand and Canada) has not generated revenue yet.

Our ultimate goal is to get our citizenship and live in Canada once my husband's businesses are all set up and I will be able to go back to work. We want to raise our child here and grow old here, we came to study in Canada since 2004 and after post grad work permit and a long wait we got our PRs, we don't want to lose it. My pregnancy was unexpected and the timing is bad since my husband is stuck between here and Thailand, and the law change timing could not have been any worse for our citizenship application.. My husband already spent most of the time outside of Canada in 2014 so technically he is already not eligible to apply for the citizenship this time around (I think you have to stay at least 6 months within one calendar year out of the 3 / 5 years residency calculation for citizenship application). I didn't even know he had to meet the residency requirement for citizenship on his own, I was initially told as long as one of us stayed in Canada the days would count towards citizenship calculation, as well as PR renewal residency requirement. So we want to renew our PR cards in 2018 and reset the process, and of course with the new requirements that are going to start in June, at least this was what was initially recommended to us by one of the immigration consulting lawyers that I've had a brief session with.

Sorry this was very lengthy, but please help me with in terms of CCTB and taxing questions, as well as my husband's PR renewal. Otherwise he will lose his PR if he can't come back to stay here 317 more days. Thank you so much for all your advice. I'm already so stressed being so close to the due date but all these questions that cannot be answered are stressing me out even more!

 

[dpenabill]

As you have discovered already in trying to find answers, there are indeed many factors involved and it is very difficult to describe any simple rules governing any one of these issues (be that EI or CCTB or taxes or something else for example).

For each of these things the best place to start is doing the homework at the respective government body's website, reading eligibility requirements, FAQs, and so on. And to the extent you still have questions, be able to formulate specific questions regarding that particular thing based on very specific circumstances. No guarantee a call to the respective call centre or help line will get a complete answer, but until you have done the homework and can narrow the questions down to specifics there is a virtual guarantee you will not get an answer or, even if you do, it will not be an answer you can rely on.

Sometimes a settlement centre can offer help sorting through some of these issues.

Whether or not there is an obligation to file a tax return, for example, depends on a lot of things. No income, no collection of benefits in Canada, no requirement to file a tax return in Canada. Not living in Canada and no income anywhere, for sure no requirement to file a Canadian tax return. But beyond that the specifics matter and the best course of action to take can vary considerably. Those better informed about Canadian tax requirements can offer a lot more information than an immigration site. Still, however, best to do as much homework for yourself as you can . . . it is easy to get the wrong answer and not realize it unless you have done enough of your own homework to recognize what is credible and reliable versus what is not.

Living an international, border-straddling lifestyle can be confusing and complicated.



Credit twoard PR Residency Obligation for time abroad working for a Canadian business:

In any case that he cannot come back to stay 317 more days in Canada, I'm not sure if the days he spends working in Thailand can count as "full-time employment to a Canadian business abroad", as technically the business he is starting up in Thailand is a part of his business in Canada. I am not sure how to prove it as it is sort of self employment. His business partner has Canadian citizenship and he owns half of the business, I am not sure if he can write a letter to confirm my husband's employment? So far the company is still being registered in Thailand and both sides (Thailand and Canada) has not generated revenue yet.

This is a lot more tricky than the CIC website information reveals. In fact, in some respects I think the CIC information online is misleading -- except there is the information provided in the Operational Manuals; see ENF 23 Loss of permanent resident status in which section 6.5 (page 17) details the criteria employed, which states (with emphasis added):

The regulations enable permanent residents to comply with the residency obligations while working abroad, provided that:
* they are under contract to, or are full-time employees of a Canadian business or in the public service, where the assignment is controlled from the head office of a Canadian business or public institution in Canada;
* they are assigned on a full-time basis as a term of their employment or contract, to a position outside Canada with that business, an affiliated enterprise or a client;
* they maintain a connection to a Canadian business;
* the are assigned on a temporary basis to the work assignment; and
* they will continue working for the employer, in Canada, after the assignment.

Even this somewhat understates the approach CIC takes, and there are additional factors, such as the business and assignment cannot be one that was created or designed for the purpose of enabling a PR to meet the PR Residency Obligation.

I am not qualified to analyze whether any particular business, assignment, or employment would qualify, even with a lot more information about the business and work. But my sense is the venture you refer to will have a high risk of not qualifying.

In general, to qualify the business must be more than incorporated in Canada with an ostensible office, its headquarters in Canada, but needs to be actively engaged in conducting business in Canada. The employee must be someone generally employed by that business for a job in Canada, and who will continue that job in Canada after the temporary assignment abroad.

Some recent IAD cases, for example, highlight emphasis on the temporary nature of the assignment abroad.

The smaller the business, the more likely there will be strict scrutiny of it and the PR's employment terms. (What CIC decides is the "head office," for example, might not be what the partners state it is, if they claim it is in Canada and most of the real work is done abroad.)

Again, I cannot really judge any particular business or employment relationship, but this one sure looks like it would be very risky to rely on it for credit toward compliance with the PR Residency Obligation.



PR Residency Obligation generally:

[quote author=naoyazwife]
So we want to renew our PR cards in 2018 and reset the process . . . [/quote]

There is NO reset of the process. Basically a PR can be outside Canada, after landing, up to 1095 days before the fifth year anniversary of the date of landing. Date on the PR card is largely irrelevant (although usually the expiration date will be a matter of weeks after the fifth year anniversary of landing).

After the fifth year anniversary of the date of landing, the PR must not be outside Canada for 1095 days or more in any given five year time period. Validity dates of the PR card are totally irrelevant.

Thus for example, for you having been in Canada extensively in the first two years after landing in April 2013, if you leave Canada later in 2015 and even if you only occasionally make short visits to Canada and do not return to Canada to stay until January 2018, you could apply for and obtain a new PR card then, as you will have been in Canada for more than 730 days within the previous five years. That PR card will probably have an expiration date in 2023 (five years after the date it is issued). But if you then soon leave Canada again, and are gone more than a year you will be risking a failure to comply with the PR RO . . . say, for example, you next return to Canada in September 2020. Unless you have been in Canada more than 730 days since September 2015, you will be in breach of the PR RO even though your PR card does not expire until 2023.



Citizenship:

[quote author=naoyazwife]
My original intention was to stay until October (that's the earliest I can apply for Canadian citizenship) and then take a trip to Thailand to see my husband but Immigration confirmed for me today that starting June 19th the law will change so I won't even be eligible to apply for the citizenship for another year.[/quote]

It is not at all certain what the coming into force date will be for the changes to qualifying for citizenship. June 19th is just one guess among many others (most are betting it will be July 1st, I bet June 1st, but we do not really yet know).

But it is very certain it will be before October, almost certainly no later than August 1st.

Thus, there is no way you will qualify for citizenship before May 2017 (I would have said April but you said you were abroad some after becoming a PR), four years minimum after becoming a PR, no credit for time living in Canada prior to becoming a PR, and four years over and above any time spent abroad. So citizenship is a long ways off for now.

If you leave Canada for a total of two years, it will take four more years beyond that to qualify for citizenship.

 

[naoyazwife]

thank you so much for taking the time to read and reply!
I have just realized that non-resident for tax purposes has nothing to do with being non-resident for part of the 5 years of being PR, as long as the 730 days are spent physically inside Canada.

I guess it just means that this will earn me some time so I can be in Thailand until we come back to renew, and of course until our cards expire in 2018 my husband will have to come back and forth to meet his residency obligations (I agree it's even more difficult to prove the whole working for Canadian company issue) so he can renew his card as well.
Hopefully his business side is settled down in Thailand (hopefully the sooner the better) and he can be in Canada more permanently so we can finally settle in one place for good even before the card expires, and if we don't have to leave Canada at all after our PR cards are renewed then there shouldn't be any problem and we can start counting the days for citizenship application.

 

[on-hold]

You can't receive CCTB (or any other benefit -- maternal leave is the only one) while resident in a foreign country -- and CRA itself will decide if you are resident there, or in Canada, using their own calculations. In fact, before you leave Canada, you are expected to fill out a form which will let them determine this. Then, when you come back, you will have to fill out another form that determines whether you are now a resident of Canada. My wife and I didn't know about this, assumed that our PR status made us naturally residents (when we came back from 11 months in the States), and were surprised when after 10 months in Canada, CRA suddenly decided she wasn't a resident. It took us 15 months to get that decision reversed.

Increasingly Canadian agencies have access to tracking information from the border; and if they find out you've been receiving benefits while living abroad, they'll claw them back. It's not done in a hostile manner, but they are quite insistent about it; and if you don't pay, they will simply make them up from UCCB, tax refunds, other benefits, etc. The definition for 'living abroad' seems to be ~3 months.

 

[Rob_TO]

Tax: for myself, 2015 and early 2016 I will have EI income. I will start my maternity leave starting April 27th. I have confirmed with Services Canada that I am allowed to leave Canada while receiving EI (no matter how long I am gone for, as long as I notify them before I leave), and it's only because I'm on maternity/parental leave until April 2016. My first intention is to come back to Canada after my one year maternity leave is done so I am assuming I can still receive Child Care Tax Benefits while I am on maternity leave.

While you can receive maternity leave EI payments while not in Canada, I'm pretty sure CCTB payments require physical residency in Canada. So if you don't tell anyone you leave and simply file taxes as if you were in Canada, and CRA were to ever find out, they would demand you repay back all those CCTB payments they gave while outside Canada that you weren't entitled to. Better to inform them from the start when you leave, to confirm what you are and aren't entitled to.

I will still be filing income tax as if I had never left Canada, because my every intention is to come back from maternity leave. For my husband, he will probably file his tax as resident as he has had some employment income before starting his own business in 2014. For 2015 and onwards, depending on his new business, he will have to file his tax as non-resident. Please correct me if I'm wrong.
If though, for any reason that I decide to stay with my husband in Thailand and cannot come back after my maternity leave is up, I will probably file income tax as resident with the EI income I received from Jan - April 2016. And inform CRA that I will not be returning for awhile, in which case then the CCTB will stop at that point. I guess I will also have to inform MSP that we are not coming back too? I will probably not work in Thailand so I will have zero income, will I still need to file income tax for 2017?

You should file taxes every year whether you make income or not, since in order to qualify for any child benefits when back in Canada CRA usually requires you to have filed taxes (even if it's $0) to determine your family income.

And whether or not you are classified as a resident or non-resident, has more to do with just where you happen to be living. Qualifying as a non-resident (so not required to pay any Canadian income tax) requires not just living in another country, but also severing ties (like bank accts, credit cards, properties, etc) to Canada. You can be living in some other country for years, but CRA may want to classify you as a deemed or factual resident.

This can be pretty confusing sometimes so to make sure you are making the right thing it's often good to talk to an accountant experienced with tax residency issues.
Some info here: http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/rsdncy-eng.html
http://www.cra-arc.gc.ca/tx/tchncl/ncmtx/fls/s5/f1/s5-f1-c1-eng.html

 

[naoyazwife]

thanks everyone. i have started filling out the NR73 form and will fax it to CRA to see what they say.
I will need about two months to recover after the baby arrives and will be in Thailand for 10 months, so for now on the form I am going to say that I will be out of the country for approx 10 months for my maternity leave outside of Canada, ofcourse assuming that I come back to Canada and come back to work.
I'm not sure how to fill out the form, if for any case I don't come back to Canada after the maternity leave, I am assuming if my situation changes then I will have to send in another form then to find out whether I will be considered non resident for tax purposes or not.
I think my husband also has to fill out the form too, as he has no income and his business is just in the starting process so we are not sure what his residency status is for taxing purposes either.
when he comes in time for the baby to arrive that will be approx 100 days off the total PR residency obligation so until 2018 expiry date he will need to be back for 217 more days which is definitely doable I think, of course assuming that me and the baby is back in Canada and he will have to travel back and forth to see us if his business is still not up and running by the end of my maternity leave.
I guess what's also really important is for us to hope that everything is settled by 2018 so that after the PR card is renewed then we won't ever have to leave.

 

[Rob_TO]

thanks everyone. i have started filling out the NR73 form and will fax it to CRA to see what they say.
I will need about two months to recover after the baby arrives and will be in Thailand for 10 months, so for now on the form I am going to say that I will be out of the country for approx 10 months for my maternity leave outside of Canada, ofcourse assuming that I come back to Canada and come back to work.
I'm not sure how to fill out the form, if for any case I don't come back to Canada after the maternity leave, I am assuming if my situation changes then I will have to send in another form then to find out whether I will be considered non resident for tax purposes or not.
I think my husband also has to fill out the form too, as he has no income and his business is just in the starting process so we are not sure what his residency status is for taxing purposes either.
when he comes in time for the baby to arrive that will be approx 100 days off the total PR residency obligation so until 2018 expiry date he will need to be back for 217 more days which is definitely doable I think, of course assuming that me and the baby is back in Canada and he will have to travel back and forth to see us if his business is still not up and running by the end of my maternity leave.
I guess what's also really important is for us to hope that everything is settled by 2018 so that after the PR card is renewed then we won't ever have to leave.

Note that the residency obligation has nothing to do with when your PR card happens to expire or when you get it renewed. Regardless of the status of PR card, you must be physically present in Canada for 2 out of 5 years at any time you attempt to enter Canada, or if 5 years has not occurred then must not have exceeded 3 years outside Canada since you landed as a PR.

So just because you get PR card renewed, doesn't mean the RO resets back to zero. You can still be in violation of RO even with a valid card. So just track carefully the time spent outside Canada and ensure it doesn't ever exceed 3 years in a rolling 5 year period.

 

[sinpguy]

" If you reside outside Canada in a country other than the United States, you may be eligible for maternity and parental or compassionate care benefits, provided you have a valid Social Insurance Number. Regular benefits are not payable to a person residing in a country other than Canada or the United States"

I found this in service Canada. Does this means we can be a resident of another country during maternity leave and receive maternity benefits?