Nearshore Americas

Canada Welcomes Tech Workers Escaping US Visa Hassles

For André Ferreira, a move to Canada was all about finding peace of mind. The Portuguese software engineer had been living in the United States since 2016. But with his visa expiring and his chances for renewal in doubt, he finally decided to relocate from New York to Calgary.

Ferreira is one of a growing number of tech workers who have left the United States due to hostile government rhetoric and regulations. Meanwhile, the Canadian government hopes to attract skilled tech professionals negatively impacted by the US immigration system.

Software engineer André Ferreira

“I would have had to wait for years to see if I could stay in the [United States] permanently,” Ferreira said. “Here it’s a much quicker process… Six months after you land you can apply for permanent residency which allows you to stay, without fear of having your residency tied to your employment.”

Ferreira said that constantly monitoring changes to the job market was a major source of stress for foreign-born workers in the United States. In Canada, he said, “you don’t have to worry about how the company is doing all the time… You are building a life. You don’t want to throw that out because for some reason your company isn’t doing well, or you got laid off.”

Shutting the Door on Workers

Last month, President Donald Trump issued an executive order suspending H1B visa processing for the rest of the year – an announcement that looks certain to further accelerate tech migration from the United States. According to US Citizenship and Immigration Services, more than 420,000 people applied for the 85,000 available H-1B work visas in 2019.

US President Donald Trump

The White House argues the order will create new opportunities for US citizens adversely affected by the Covid-19 crisis. But critics argue Trump is exploiting the pandemic to appeal to his base as part of his campaign for re-election in November this year.

In a statement, Facebook said the order “uses the Covid-19 pandemic as justification for limiting immigration.” The company warned: “In reality, the move to keep highly skilled talent out of the United States will make our country’s recovery even more difficult.”

Under Trump, denials for H-1B petitions for initial employment have increased from 6 percent in fiscal year 2015 to 21 percent in fiscal year 2019, according to a National Foundation for American Policy (NFAP) analysis of immigration data.

US companies such as Betterment, the investment service which employs Ferreira, are increasingly exploring their Nearshore options as a tactic to retain their foreign-born talent. Betterment were able to guarantee Ferreira’s position with the company by transferring him to Canada. To facilitate the move, the firm partnered with MobSquad, a company which supports tech workers relocating to Canada.

According to Irfhan Rawji, MobSquad’s CEO, the new visa restrictions have already led to increased interest in relocating tech talent to Canada. “The number of potential clients that have called us has gone up several times in terms of volume in the last four weeks,” he said. “We know this empirically; we’ve seen this in our website hits and the conversations we are having.”

Rawji said one factor driving Canada’s emergence as a tech talent magnet was that the country remains “very welcoming of immigrants,” and politicians have largely avoided the hostile rhetoric that has been a defining feature of the Trump administration.

He pointed to data published by the Environics Institute, a Toronto-based research group, in November last year. The report showed eight in ten Canadians agree that immigration has a positive impact on the economy.

According to Rawji, another factor behind the increased interest in Canada is foreign nationals “have an opportunity to become citizens,” whereas “you can be waiting 20 to 30 years to get a permanent residency card in the United States.” In Canada, he said, “you can get permanent residency in under a year and be a citizen in four years.”

Hunting for Talent

The Canadian government also runs several programs dedicated to bringing foreign talent into the country.

“If the United States is seen as starting to lose its edge, Canada is there and willing to capitalize,” said Eddie Kadri, an immigration lawyer based in Windsor, Ontario. “Not only does Canada offer fast and flexible work permit options for highly skilled workers, we also have innovative pathways facilitating quick transitions to permanent residence status. We offer programs such as Express Entry, the Global Talent Stream and other streams that are attractive to entrepreneurs, engineers and innovators from around the world.”

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That support has enabled global tech companies such as Google, Amazon and Microsoft to set up offices in Canadian cities. Last year, Toronto was named as North America’s fastest-growing technology market in a report produced by CBRE Group, a commercial real estate services and investment firm. In total, four Canadian cities – Toronto, Vancouver, Montreal and Ottawa – placed within the top 20 for tech talent in North America.

One obstacle to attracting even more talent is that salaries for tech workers in Canada are still lower than in major US cities. Nevertheless, Daniel Ujczo, an international trade lawyer at Dickinson Wright PLLC, believes that Canadian tech salaries could soon rival those in the United States.

“Companies are recognizing that they have to create financial incentives to attract talent,” Ujczo said. “Salaries will continue to go up.”

Ujczo said that other advantages mitigate the lower average salaries. He pointed to Canada’s free healthcare system and its employment laws (which bolster job security for workers) as factors that offset the salary imbalance between the two North American countries.

In the coming years, Ujczo expects Canada’s tech hubs to grow exponentially in terms of both size and influence.

“We see large clusters across Canada… where you have these thriving immigrant populations that continue to attract talent from across the world,” he said. “It’s the story of North America, once an immigrant population settles in that becomes a magnet for more talent.”

Stephen Woodman

Stephen Woodman is an independent journalist based in the Mexican city of Guadalajara. He has six years’ experience covering business and culture in Latin America. Stephen has been published in numerous international media outlets, including The Financial Times, BBC News and Reuters. To share story ideas, drop him a note here

3 comments

  • “In reality, the move to keep highly skilled talent out of the United States will make our country’s recovery even more difficult.”

    Employers have a long history of predicting gloom and doom when the access to cheap foreign labor is threatened. In reality we have prospered each and every we limited immigration. There was the great tomato scare of the early 1960s.The head of the California Agriculture Department told Congress to expect a 50% drop in tomato production if the Bracero guest-worker program got the ax. That drop didn’t happen. Instead, tomato farmers were forced to mechanize. Output rose and prices fell from $30 a ton in 1960 to $22 a ton in 1970. In 1960, California farmers paid 45,000 workers to pick 2.2 million tons of tomatoes. In 1996, just 5,500 workers picked 12 million tons. Tomato acreage grew from 130,000 acres in 1960 to 360,00 acres in 1996. Tomato consumption rose from 44 pounds per person in 1960 to 75 pounds in 1994.

    Then consider:

    “The crop of the present year, although deemed a short one, taxed the labor capacity of the state to the utmost. If such was the situation this year, what will it be when the numerous young orchards now just coming into bearing will be producing full crops? The labor is not now in the country to handle such an increase in production.”
     
    That was written in 1883 against the Chinese Exclusion Act of 1882. Fruit farmers in California claimed crops would rot in the fields if more Asians were not brought in for the harvest. The rotting didn’t happen.

    Limiting immigration creates more jobs and higher pay for Americans. The net impact is that the nation, as a whole, has always done better limiting immigration. In the real world the small harm suffered by corporations in having to pay higher wages has always been more that offset by other economic factors.

  • In the U.S. we have seen most of the generally available H-1b visas go to Offshore Outsourcing companies. Offshore Outsourcing companies specialize in removing jobs not creating them. Tech companies have huge contracts with these Offshore Outsourcing companies:

    Google earns 140,000$/yr in profit per employee.
    Apple earns 400,000$/yr in profit per employee.
    Facebook earns 635,000$/yr in profit per employee.

    Our domestic (U.S.) companies earn a huge profit per employee, but still they need unlimited visas? Why? Frankly they could have every employee in my company (we are only about 2 miles from Facebook), for 200k/year (less in many cases). That would still get them about 550,000$/year in profit for each engineer they hired away from our company. But they don’t do that because the news would get out and soon everyone in these companies would start asking for a higher salary.

    Further, executive compensation is dependent on increasing profits. If you can quickly replace an American with a cheaper person on an H-1b visa. You can get a salary cost reduction, often across a whole department, without creating conditions where people will ask for a higher salary generally, in fact they will be scared to do so.

    This is why the lottery system for H-1b visas (which is largely gamed and won by Offshore Outsourcing companies) has not changed for 30 years. Trump has as part of his executive order, put in a provision to change this from a lottery system to one based upon a salary ranking.
    The tech companies hate this and that is why Joe Biden (who is completely bought off by donor class political action committees) has said he will complete rescind Trump’s executive order, on Day-1.

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