Drax

I'll be landing in Vancouver in mid December on a spousal sponsored CPOR. I've been an IT contractor in the UK for over 15 years and I'm wondering if I can do the same in Canada.

I've been talking to a recruiter at Teksystems in BC about a particular job. They say they want two references upfront before they even submit my application. In the UK this is something of a scam that recruiters try to pull just to get more contacts, you don't normally give out references until you've had a job offer.

I realise UK contacts won't be much good to a Vancouver recruiter but I'm wondering is this normal practice ? What does the law say about this ?

The rates seem to be much lower as well. This particular role has a top rate of $60 per hour. The agent told me the equivalent permanent salary would be $95,000, which isn't much less than the hourly rate plus you get benefits.
Does contracting just work differently over there ?

I know I can incorporate myself, like running a limited company in the UK, but do umbrella companies or anything similar exist ?

Thanks for reading.

dbd33

I'm a contractor, and a pimp (and I have a respectable job too!).

Some points:

- references for contractors, if used at all, typically come into play only after a deal is pretty much done, they're a last check. It's not usual to use them though, the contractor is usually hired on the reputation of the supplier; it's not much of a risk for the client, they can always say "stinks, not paying, send me another".

- the law is, by and large, irrelevant to the employment of contractors. That's the main reason for using them. Any protection the worker might have had under law is evaded by the use of layered companies.

- rates in Toronto are typically half what they are in London. I don't know Vancouver's market but I imagine there are so few contracts on offer that any money is good money. $60 for someone fresh off the boat doesn't seem bad, assuming no especially fashionable skills; a Java person with two degrees and maybe five years of good experience, able to point to a product he'd created, might get $65.

- generally the way contracting works here is that people are not paid much more than the salary + benefits for the same job (there are exceptions, of course). Contracts tend to go long term, ten years is not unusual. People contract for reasons of tax avoidance or tax evasion.

- $95,000 for a computing job in Vancouver would, imo, be astonishing for an immigrant not affliated with the employer before moving there, I think they're pulling your plonker (if any).

- no umbrella companies here.

Reidies

My husband was an IT contractor in the UK for about 17 yrs before we moved here. He set up a limited company here ( incorporated) when we arrived. His first job here was a contract, but as a salaried employee , however he left that to go to a contract for 6 months and is still there 18months later! He prefers being a contractor and although they offered him a permanent role he declined. Hope this helps.

FlyingDutchman6666

I'm a contractor and concur with dbd33. I moved from Cambridge, UK to Toronto and market rates are definitely lower here. I took a pay cut of more than 20%.

Keep in mind that the Canadian Dollar is going through a very strong phase right now. When it normalises, the pay cut could be more like 50%.

Also don't underestimate cost of living differences. The received wisdom on this board is that the cost of living is about the same in Canada and the UK. However I strongly suspect that the people saying this either moved a) 10+ years ago when the dollar was still weak, or b) with a very sizeable chunk of equity, or c) from London to Mooseville.

I find the cost of living in outer Toronto suburbs to be approximately double compared to Cambridge, UK. Especially housing (absolutely everything to do with it) and car insurance are extremely expensive.

Just to give you a small example, the monthly payment for car insurance for two (39yo male+36yo female, both 10+ years clean driving experience in the UK, driving a Mazda3+an old banger) is just under half the monthly mortgage for my 4 bedroom house just outside Cambridge.

Steve_

One point I think is worth making - payroll taxes in Canada are really low, so there isn't such a big disadvantage running your own company as there would be in most other countries as the employer's half of CPP is less than $3,000 pa.

Steve_

Double Cambridge? You're exaggerating, surely.

One of the reasons I moved here was because I saved money by living here, and I do, no question about it, although yes I did move here when the pound was something like $2.30.

I live in an equivalent sort of area and I drive a similar kind of car.

I never quite get the comments about car insurance, I went through at least half a dozen insurers in the UK as well. I do pay a bit more in Calgary but its not massively more.

Anyway I save tons of money purely because the taxes are lower, if for no other reason. Ontario doesn't have as big of an advantage on that one, I realize. Also utilities here are lower, natural gas costs nothing compared to what it costs in the UK.

I do nearly die of heart failure when I go to Vancouver though where everything seems to be a lot more expensive.

Alan2005

This. The salaried computer people in the office earn around $70/80k. The managers just over $100k. I don't think they are badly paid by local standards.

dbd33

You're not a contractor, are you? As a contractor in Ontario, I don't pay income tax, I wouldn't realize a saving by not paying income tax in Alberta instead.

Auld Yin

A somewhat misleading comment by you. From your previous posts you don't pay income tax because of other circumstances, not because you're a contractor.

dbd33

I've been divorced since 2009, alimony has been a factor in my tax situation since then. I've been a contractor since 1986. From 1986 until 2009 I was not liable for income taxes due to being a contractor, since 2009 I would not have been liable even if I took a permanent position, due to the alimony. The unfortunate thing is that I now have deductions such as to wipe out my taxes twice over but I cannot get RevCan to send me money.

jandro

Other agencies I've dealt with asked for references when they were about to submit my details to an employer. I've been told that you can set up something similar to an umbrella company over here.

JonboyE

I may be misunderstanding the terminology, but it is very common here for contractors to operate through a corporation (limited company).

As dbd33 mentioned, "employers" prefer to hire contractors because it avoids paying benefits, employer’s contributions to CPP and EI, and gets around many of the Labour Standards. The Canada Revenue Agency doesn’t like it and, on audit, can try to deem the contractors as employees (and then charge the employer all the taxes they would have had to deduct if the contractor was an employee).

A corporation creates a degree of separation between the “employer” and the “employee.”

Aviator

Which is why the produced this
http://www.cra-arc.gc.ca/E/pub/tg/rc4110/rc4110-11e.pdf

FlyingDutchman6666

I wish I were.

One thing to check is what house prices have done since you arrived. Not just in dollar terms, but in pounds.

My wife and I never paid more than 200 pounds/year for car insurance in the UK.

Here in Canada, my wife started out at $340/month. And yes we did shop around, most quotes were pretty outrageous (in the $7000+/year range).

We now have a "great" deal from an insurer offering a five-star rating by taking our UK driving history into account. It's $505/month combined.

Tigger1

I used to work for an IT placement agency. Teksystems have a good market share in Vancouver, however they are pretty ruthless if you upset them (they sued one contractor who wanted to leave the contract for a perm role, said contractor worked at the company I was in at the time so know that first hand)

The reference's thing varies from agency to agency. A few others to check out would be Annex (I used to work for them) they have a good market rep and some good sized clients. They will prefer you to be incorporated.

Inteqna's another one, and OK from what I've heard of them. Swim Recruiting are good (& owned by an expat).

Hope that helps