I'm not a lawyer in Canada, but I can give you my opinion. Feel free to disregard it - I'm not claiming to know more than a professional, I'm just a guy on the internet. But hey, I can have an opinion.
I explained the whole situation to her, She has advised me to not cancel my work permit application because it allows me to work full time right now in Canada. She has advised me to wait and see how the IRCC responds to my application of work permit (PGWP). She explained that the department of temporary and permanent residencies work separately....
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I also asked if my PGWP application is refused based on my current status being PR, then she suggested I would have a letter of reason for refusal from the office which would state that I am a PR right now and using that I can keep on working till I apply for my PR card renewal.
Ok, I can sorta understand this part. Doesn't hurt to wait and see, and makes sense to see if they reply saying you're already a PR, that will make it even clearer.
She said if I apply for my PR Card it completely depends on the Visa Officer if he would renew my PR card or not.
I don't agree with the emphasized bit. If you are a PR, and you have complied with the residency obligation, the officer does not have the discretion to deny you a PR card (barring criminality etc, but that doesn't apply here). The officer may well ask you to prove RO, and ask for further documents etc, but again, IF you are a PR AND you have complied with your RO (and you have proved this to the officer), I do not believe he can deny you the PR card.
Legally, I am PR in their record and I should apply after completing the residency obligation.
Yes, I agree.
However she advised that along with my application documents for PR Card application, I should write a letter to the office as well on humanitarian grounds explaining everything and try bringing cultural context in it as well while telling why I didn't came to Canada in 10 years after leaving. Just application documents won't be enough. If I write that letter then there might be a possibility of getting a PR card renewed from the Visa officer.
Here, it feels like your lawyer is covering her bases. I don't see why H&C is needed - you are a PR, and you have met your RO. You don't need to ask for H&C consideration. However, I also can't see why this would hurt your case so whatever, why not. I disagree with the "might be a possibility bit", for the same reasons stated above.
I also asked if my PGWP application is refused based on my current status being PR, then she suggested I would have a letter of reason for refusal from the office which would state that I am a PR right now and using that I can keep on working till I apply for my PR card renewal. She also told that any further document request or response in a online PGWP comes late and probably by the end of 3 months and till that time my Residency obligation would be coming close to be fulfilled.
Makes sense.
However if my PR card renewal request is refused and PR status is taken from me after I apply (after a PGWP application is refused for first time), then I have to rush immediately towards a Canadian border and reapply for a PGWP and get the work permit immediately without waiting since I won't have much time left till then. I can apply for a PGWP only within first 6 months of getting a degree which is starting of November for me.
However one thing is not sure, that if my PGWP application is not refused but kept on hold (like my parent's visitor visa) until further documents like PR renunciation etc are given, what will I do then. The lawyer advised me to wait and see how they respond to my application of PGWP which I have submitted 15 days back. She said we have to respond according to what they say.
I don't see how they will both refuse your PGWP for being a PR and then not give you a PR card. That doesn't make sense. Either you're a PR or you're not. If they say you're not, you get PGWP. If they say you're a PR, you don't need the PGWP.
Also, you do NOT need a PR card unless you want to travel outside Canada. You should still get your old documents and go apply for a SIN number. I don't see any reason why you should wait for that, it's got nothing to do with your PGWP or any immigration applications you put in.
If you get your SIN (beginning with a 5), then you really can start working immediately.
So, in summary
1. Your lawyer does sound credible. She may be deliberately simplifying things for you, but on the whole she doesn't come across as a lawyer who doesn't know her stuff (this does happen, there's an unfortunate case on the forum from a few days back)
2. I still think that you should use your old PR documentation to go get a SIN. If you get a SIN, that's that.. you can start working immediately. It will take you 30 minutes. If Service Canada asks why you didn't get a SIN before the docs expired, just say that you were a child and you didn't know you needed one. You don't need to go into exhaustive detail about your situation, I'm quite certain they won't care.
The worst case is they deny you.. they aren't going to report you to IRCC or impact any applications you may have. So you walk out of the office exactly where you are right now.
3. A second opinion is entirely up to you. Personally, I would get one - not because this lawyer is bad, she doesn't sound bad - but because your case is somewhat unique and obviously your current lawyer hasn't dealt with exactly this situation before. Perhaps another lawyer has seen this play out and knows exactly what will happen. If you can afford it, then why not.