Why Axis

After attracting thousands of skilled immigrants over the last three years, Canadian tech sees another opportunity in U.S. visa changes

The Peace Arch border crossing between Canada and the United States, near Seattle and Vancouver in March 2020.
The Peace Arch border crossing between Canada and the United States, near Seattle and Vancouver in March 2020.
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With the U.S. suspending an immigration program Silicon Valley has used to attract some of the world’s top tech talent, Canadian companies are hoping to take advantage. But Canada will face stiff competition for those workers—despite the success of a skilled-worker program that has already brought thousands of immigrants north.

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Talking Point

Canadian tech firms say they plan to hire from the pool of skilled workers affected by U.S. President Donald Trump’s move to freeze a key visa beloved of Silicon Valley. Ottawa’s new fast-track program has already brought in thousands of immigrants previously living in the U.S. over its first three years, The Logic’s analysis shows.

U.S. President Donald Trump signed an executive order Monday suspending new H-1B visas until at least the end of the year. The order also cut off programs used by the spouses of foreign workers and by companies transferring employees to U.S. offices. 

The H-1B program “allows [American] employers to cream-skim the top talent” from universities around the world, said Mikal Skuterud, a University of Waterloo economist. “These are the people driving a lot of the patent creation in the U.S.” In a 2019 study, for example, Skuterud and his co-authors found that university-educated Indian immigrants in the U.S. out-earned their domestic-born peers, but the trend was reversed in Canada. That’s not simply the consequence of the pay differential between the two countries—it’s because the most in-demand workers are choosing the U.S. over Canada, he said. 

About three-quarters of H-1B visas each year typically go to tech workers. U.S. tech giants including Alphabet, Apple and Amazon have criticized Trump’s move, arguing immigration has contributed significantly to the country’s economy. Canadian firms and executives have responded by advertising open positions and encouraging H-1B holders or workers who were hoping to move to the U.S. to apply here instead.

Kaz Nejatian, general manager of Shopify’s financial solutions division, registered an engineer-focused domain that redirects to the e-commerce giant’s careers page. Other Canadian tech firms that are continuing to hire despite the pandemic are also looking to recruit among those affected by Trump’s order. “This is positive for Canadian companies,” Louis Têtu, CEO of Montreal-based AI company Coveo, told The Logic. “We can keep [and] attract R&D workers.” Telehealth firm Dialogue, textile computing startup Myant and international student recruitment platform ApplyBoard all encouraged such workers to consider their job openings. Toronto-based fintech firm Wave is “100 per cent” looking to hire workers affected by Trump’s order, said chief people officer Ashira Gobrin. The Council of Canadian Innovators, a scale-up lobby group, is launching a portal for displaced H-1B workers to connect with HR teams at member companies.

But Canada will face competition for the top talent displaced by Trump’s H-1B changes, and the domestic tech sector’s pandemic-induced staff cuts and hiring reductions could also limit the upside.

One recent program has already brought thousands of skilled immigrants from the U.S. to Canada, The Logic’s analysis shows. Under the Global Skills Strategy (GSS), Ottawa promised to process work-permit and visa applications for highly skilled foreign workers in two weeks each—down from the several months fast-growing tech firms said it previously took. The program, launched in June 2017, has proved particularly popular among immigrants living in the U.S., The Logic’s analysis shows.

U.S. residents accounted for 20,986 of the 64,552 temporary-residence applications Canada approved under the program between June 12, 2017 and March 30, 2020, according to data from Immigration, Refugees and Citizenship Canada (IRCC). Canada greenlit just 971 U.S. citizens over that same period, suggesting that the vast majority of the skilled workers coming north were immigrants.

Many of those are likely to be Indian citizens working in the U.S.—the country topped both IRCC application lists, but almost half those approved were not residents. The surge in U.S.-based GSS applicants follows repeated signals that Trump wanted an overhaul of the H-1B program. He ordered a review shortly after taking office in January 2017, and his administration has subjected applications to increased scrutiny, leading to delays.

Indian tech workers are likely to be the most significantly affected by the U.S. freeze; applicants from the subcontinent received 71.7 per cent of new and renewed H-1Bs in the 2019 fiscal year. They also face long waits for permanent residence, the step before citizenship. Under the U.S. system, applicants from a single country can receive no more than seven per cent the total number of green cards issued annually; Indian citizens made up three-quarters of the 800,000 people on the waitlist at the end of last year.

Canada’s system has no such citizenship-based caps. Its point-based approach favours the kinds of candidates who would qualify for an H-1B visa, according to Robin Seligman, a Toronto immigration lawyer. “Canada wants you,” she said. “Young, educated techie—perfect.” 

Unlike the U.S., Canada has tried to keep its immigration system open during the pandemic, Seligman said, citing waivers for essential foreign workers who aren’t able to submit biometric data and changes to the post-graduate work permit allowing international students to qualify even if they take courses online from outside the country this year. 

Skuterud said even existing H-1B holders might be looking for jobs in other countries, given the new limitations on spousal visas, concerns about their ability to renew their status and the U.S. political climate. But “it’s not clear Canada’s the second option for these people,” he said, noting that they have “opportunities all over the world.”

Thousands also move the other way across the border each year, feeding longstanding concerns about Canada’s “brain drain.” Applicants born in Canada received 4,615 H-1B approvals in fiscal 2019, but that doesn’t account for immigrants leaving for the U.S. 

More than 16 per cent of clicks in May on postings for Canadian tech jobs on Indeed were from people outside the country—in line with the share in mid-2019, according to the company’s in-house economist Brendon Bernard, although he said it’s too soon to assess job seekers’ reaction to the U.S. immigration changes.

Immigration Minister Marco Mendicino’s office did not directly respond to questions about whether the government has seen any increase in applications since the Trump order was announced on Monday, or whether it was considering changes to attract affected workers. “We actively seek to bring the best and the brightest from around the world to drive our economy forward,” said spokesperson Kevin Lemkay, adding that Ottawa is monitoring the situation.

Innovation-economy firms have already been the biggest beneficiaries of the GSS. Half the top 10 occupations in IRCC’s approved applications list were computer-related, accounting for 36 per cent of the total between them. 

But how many H-1B holders and hopefuls come to Canada following Trump’s move will depend in part on companies’ capacity to hire them right now. For many temporary programs, “you need a job offer,” said Seligman. More than 98.6 per cent of successful GSS applicants so far have been granted employer-specific work permits, although the number of open ones has been slowly increasing year over year, according to IRCC data.

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Many startups have laid off staff and frozen recruitment amid the pandemic. While tech jobs had declined less than other fields, they were still down year over year, Bernard told The Logic last month. Overall, Indeed had 41 per cent fewer job postings as of June 12 than at the same time in 2019. 

Skuterud believes Canada should create more programs like the GSS to attract high-tech workers affected by Trump’s changes. “These people are exceptional talents,” he said. “If there’s any way that can compete for [them], that seems like a no-brainer to me.” 

With files from Zane Schwartz in Toronto