April 10, 2019 6:00 am
Updated: April 13, 2019 10:20 am

2 years in, Trump’s immigration squeeze is feeding Canada’s tech talent pipeline

Canada's tech industry is booming right now. Who do we have to thank? Well, Donald Trump of course. Mike Drolet reports.

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Toronto looks like “quite a different place,” said Peter Macnee, CEO of Statflo, a customer-outreach platform for wireless and tech retailers.

Macnee, a consummate mobile-industry executive, left his native Canada in the late 1980s and never looked back — until recently. Just 10 years ago, he recalled, raising Canadian capital for Canadian tech ventures was “challenging.”

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Today, though, Toronto is “second only to Silicon Valley,” declared Macnee, who launched Virgin Mobile Latin America from Miami. “It’s tremendous what’s happening in the city from a tech point of view.”

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So when he saw the opportunity to lead a promising tech startup back home, he took it.

Macnee’s story is becoming increasingly common in Canada’s tech industry as Washington throttles visa processing for skilled foreign workers while Canada ramps up its immigration targets. And Canadian companies’ ability to attract foreign talent isn’t limited to Canadian expats.

Sixty-five percent of international tech employers polled in a recent survey by immigration consulting company Envoy Global said they are sending more employees to Canada and hiring more foreign nationals from north of the border. Nearly 40 per cent said they’re considering expanding into Canada, and more than 20 per cent said they have already established at least one Canadian office.

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There are a number of tech firms, either based in California or international tech firms with significant offices in the United States, that have opted to open Canadian offices — the principal reason being that [they] can attract and keep workers in Canada,” said Peter Rekai, a Toronto-based immigration lawyer.

And the forces pushing top brains away from the U.S. are as strong as those pulling them toward Canada, said Dick Burke, CEO of Envoy Global.

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The push factor

Obtaining visas for foreign professionals has become notably harder under the Trump administration, Burke told Global News.

“The interpretations given by immigration officials on various [visa] programs are … much narrower than they used to be,” he said. “The whole environment has changed.”

For example, the U.S. government turned down 25 per cent of applications for H-1B visas, a key program tech employers use to sponsor highly educated workers. That share is up from just five per cent in 2014.

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Public data also shows that in 60 per cent of cases, U.S. authorities are asking companies to submit additional information to back up their case for H-1B sponsorship, something called a “request for evidence,” or RFE. In 2016, fewer than 30 per cent of applications saw an RFE.

RFEs mean both additional paperwork and costly delays for companies. The National Foundation for American Policy estimated that project delays and contract penalties caused by RFEs cost U.S. businesses “millions of dollars” in 2014, when such requests were still relatively rare.

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It doesn’t help that Trump is also thinking about rescinding the H-4 visa, a popular program launched under the Obama administration that allows spouses of H-1B visa holders to live and work in the U.S. That has a lot of foreign professionals wondering whether they want an H-1B visa at all, Burke said.

That uncertainty has become typical of the way U.S. immigration policy is implemented, including to Canadians applying to work in the U.S. under NAFTA, Rekai said.

And that unpredictability is fuelling anxiety, both among foreign workers whose future hangs in the balance and among employers.

“Americans are willing to pay more … to get the foreign talent,” said Burke. But “businesses don’t like uncertainty.”

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The pull toward Canada

The U.S. immigration squeeze appears to be sending more brains up north. Toronto, for example, added a whopping 82,000 tech jobs between 2012 and 2017 — more than San Francisco — according to research by CBRE Group.

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Foreigners now account for a quarter of the clicks on software developer and engineering jobs posted on Indeed Canada, the company indicated in a recent report. In particular, interest from India doubled between 2017 and 2018, with Canadian tech jobs now getting as many clicks from that country as from the U.S.

Indian nationals also make up the largest share of Canadian work visa applications crossing Rekai’s desk, with China taking up the second spot.

That may not be a coincidence. India and China are the two largest suppliers of foreign workers through the H-1B program, accounting for 52 and 10 per cent of applications, respectively. And although the U.S. is thinking of scrapping its country quotas for the allotment of green cards, Indians currently face the longest wait times to obtain permanent residence, as the country is allotted just seven per cent of the permits each year.

Canada, in the meantime, has rolled out the red carpet for high-skilled foreign workers and their employers.

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The Express Entry program, which launched in 2015 under the Harper government, offers a fast-track path to permanent residence for applicants who are fluent in at least one official language and have either a job offer from a Canadian employer or in-demand skills for jobs that Canadian companies are struggling to fill. The program promises processing times of up to six months compared to an average of 12 to 14 months for regular candidates.

Some high-skilled workers may be eligible to apply for permanent residence from the get-go, Rekai said.

“If you’re 30 years old and if you have [a master’s degree] and you’ve already worked for four years, say, in India — you might even have a shot of applying immediately,” he told Global News.

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Foreign students in Canada also have an opportunity to get on the fast track to permanent residence, Rekai said. Most graduates from Canadian institutions can get temporary work permits, which may enable them to accumulate enough experience with Canadian-based employers to qualify for Express Entry, he said.

There’s also Global Talent Stream, the brainchild of the current Liberal government, which promises two-week processing for work permits for high-skilled workers with hard-to-find qualifications or unique experience.

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Overall, Ottawa has committed to bringing in 350,000 foreign nationals by 2021, equal to nearly one per cent of the population. Most of the newcomers will be workers who qualify under Canada’s points system, the government said.

Businesses have taken notice. Sixty-five per cent of employers surveyed by Envoy Global said they viewed Canada’s immigration policy more favourably than the U.S.’s.

But a surer and easier path to visas and permanent residence isn’t all that’s pulling talent north of the 49th parallel.

While some global tech companies are temporarily “parking” foreign nationals in Canada with a plan to eventually transfer them back to the U.S., many are establishing a permanent presence in tech hubs like Toronto, Ontario’s Kitchener-Waterloo corridor, Vancouver, Montreal and Ottawa.

WATCH: Toronto is fastest growing tech city in North America

U.S. tech giants have been scaling up their presence in Canada for years. Google’s Canadian headcount, for example, has grown from just 40 employees in 2006 to more than 900 in the span of 10 years.

Amazon employs over 800 tech workers in Toronto and recently announced plans to add another 600. The company is also expanding its presence in Vancouver, a move it says will grow its total workforce in the city from 2,000 to 5,000 by 2022. Most of the jobs will be focused on e-commerce technology, machine learning and cloud computing.

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Mid-size tech companies are now following in those steps, too, said Burke.

At Statflo, Kevin Gervais, who co-founded the company with his brother Ian, said he is “doubling down” on Toronto. The firm has been able to sponsor a number of employees under different work visas and is seeing unprecedented interest from job applicants from the U.S.

“It has really expanded the pool [of talent] that we would look at,” he said.

© 2019 Global News, a division of Corus Entertainment Inc.

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