yakstar

Hi Everyone,
I've posted a few threads previously for advice on relocating to Vancouver and budgets, thanks all for great feedback and support. Since then, I've visited Vancouver for a second time and stayed for a week to work on a mini project with my potential employer and justify and trial the position as well as the culture (and vice versa). I've now been offered a permanent role with a basic relocation package and all legal costs + admin covered. Sounds like a dream, but unfortunately the salary package doesn't meet my expectation by some way (based on my calculated costs and single source of family income).

As it stands it's a non starter as we would be worse off than I am already in UK (like for like). However, I'm not giving up yet, and I'll be negotiating the offer and would also like to work out some alternatives scenarios which include the option to have a contract based role with an hourly/daily rate rather than salary. Obviously this has many disadvantages as I'd loose out on the extended medical and dental cover + MSP contribution as well as holiday allowance to name a few. Has anyone gone down this route and could offer some advice especially in relation to immigration? Your advice is greatly appreciated as always

dbd33

I have worked as a contractor since the mid-1980s. This week my daughter, in Vancouver, switched from contract to permanent work; she's celebrating by taking a holiday, something she was scared to do while not having employee status.

The first consideration is, will you get sick or injured during the period of the contract? If you do the lack of income while not working will be a much bigger problem than the lack of health insurance. The second one is, are you a spender or a saver - spending the tax money is the primary cause of ruin for contractors so you need to be disciplined. Have to run ….. client wants me and, as a contractor, I always have to go.

Aviator

Would you be working for other clients as well or, just this one. CRA has specific rules over being a contractor or an employee. Working for multiple client and setting your own schedule could well be OK. If you are to all intents and purposes working as an employee , but billing as a contractor, CRA may take a dim view if they check up, which they do.
Also, as a contractor, you would need to be registered for GST, should consider carrying liability insurance, have a business license and be sure to meet all local bylaws. Contractors are not protected by employment law either.

Siouxie

How would you obtain a Temporary Work Permit to become a contractor if you don't get an intra-company transfer or PNP sponsorship (which requires a permanent job offer)? Have you considered asking if they would be prepared to open a new office elsewhere perhaps? Other areas / Provinces are cheaper to live in than Vancouver after all. Do they have any other branches in Canada?

Would you have enough points under Express Entry to enable you to get an invite for Permanent Residency without a permanent job offer? Did you want to become PR's? If that's your goal you may need to accept that you will be slightly worse off to start with - many are.. it's one of the penalties to relocating and being a newcomer... it's one of those 'looking at the big picture scenarios. PNP likely would also be a non starter without a permanent job offer. An alternative could be a Start Up Visa - if you are going to become a contractor, you could go the whole hog and start your own business and bring in others to work for you, perhaps.

Can you afford and do you have the settlement funds required for your family (for PR) if you don't have a permanent job offer if you wouldn't be here on a Temporary Work Permit to get around the requirement.

dbd33

As a new immigrant without a job, you'd be hard pressed to borrow money so a mortgage or car loan would be very unlikely.

yakstar

Thanks all for such quick feedback, valuable as always.

@dbd33
I'm able to control my and my families spending and am used to working of a budget by making adjustments MoM in my spend so having a rainy day fund for sick days and holidays is built into my savings which stay in the business.

@Aviator
I would work solely for one client and they only have one HQ in Vancouver or Canada in general for the type of Work I do, but this would be a two year contract. I do understand the authorities are cracking down on this, as they are in UK, and taxing you as they would normal employees. Whilst the tax saving is a benefit, it's not the reason I wanted to go into contracting. I'm more attracted to having my own freedom with my money and the flexibility.

@siouxie
From my understanding, it would be extremely difficult for me to obtain a TWP if my intention is to arrive in Canada and set up a business from scratch, where a start up Visa would be more applicable (but not necessarily more attainable). The company offering me the permanent position may be open to offering me, or more specifically, my company (whether it's UK or CA based) a 2 year contract to do the work I'd intended to do on the permanent contract. In which case I effectively become a consultant. I'll need to review the points again to see if I qualify for express entry, but I believe so. I've no intention at this stage to go for PR and wanted to take this opportunity to live abroad for a few years given the intracompany connections. I will be seeking legal advice from the immigration lawyer they've put me in touch with to review this scenario if I get no where with salary negotiations on permanent employment.

My experience with this so far is that I'm now on the fence of this being more hassle than it's worth, because I was hoping they'd to meet me at the proposed costs (or at least within 90% of it), but as I understand it, there may be internal constraints which prevent them from doing so (such as publicly advertising the role locally at the base salary). All I know is that I can secure work in London and commute in by train as I currently do (given that I live 50 miles away), which will result in ~30% higher salary and thus disposable income for very little change of personal and family circumstances or having to become a contractor. But I'm not giving up yet!

Kind Regards,

Edo

As others have said, you do lose out on benefits by going as a contractor but above all you lose out on company pension (RRSP - if your company offers one). Also, if you take home dividend instead of being on a T4 then you also do not pay into CPP which means you will not have a state pension either after retirement.

Now it all depends on what age bracket you currently are or how much longer you can work potentially until retirement. Personally I like to switch between full time and contracting purely for career growth. Because as an employee you have access to certain training and development through your company which is something you may not have as a contractor (or at least as is the case in my industry).

From a financial perspective, it really hurts to pay 35% of your salary into an unfair and biased tax system when you are full time, whereas the control that you have over your money as a contractor is just so amazing plus rates are usually higher to compensate for the risk and uncertainty.

dbd33

Doesn't that imply some form of tax fraud? Most of the avoidance arrangements (rent a room in your house, write off a car, etc.) are no longer available so, in order for a contractor to have a tax advantage over an employee the contractor is assuming some degree of risk. Fair enough, if it's what you want to do, but it's a factor to be considered. I became more adventurous in tax planning after becoming a citizen.

Aviator

One of the big reasons CRA have hired more auditors and are doing many more payroll audits. One of the requirement in an audit is to list all employees and all contractors. Then the questions follow!
It is not really a choice for either party. If CRA determine an individual was an employee rather than a contractor as they claim, the individual gets any additional tax bill, if any, the employer gets a bill for both employee and employer deductions. Certain industries are also being targeted.

The benefits of being self employed are nowhere near what they were before this govt weighed in on it.

Aviator

The rules around Employee or Self Employed
https://www.canada.ca/content/dam/cr...rc4110-18e.pdf

Siouxie

It's not going to be so simple to get a TWP unless you come on an Intra Company Transfer - the company otherwise will have to advertise the position Canada wide for many weeks and prove that there isn't a Canadian Citizen nor Permanent Resident anywhere in Canada willing, qualified nor able to take the position, in order to get a positive LMIA to be able to offer you the position and for you to get a TWP. It's an onerous procedure and many don't get approved. https://www.canada.ca/en/employment-...n-workers.html

As a Start up applicant you should be able to obtain a TWP. https://www.canada.ca/en/immigration...k-permits.html

Edo

Nope, I do not support tax fraud at all. I am just using the same rules and laws to my advantage that the govt. has made for the billionaires and big corporations to become richer