Changing US immigration policies lead businesses to Canada to find talent
Article 3 minute read

Changing US immigration policies lead businesses to Canada to find talent

10 July 2018

With new immigration policies in the US making it more complex for businesses to hire talented candidates, they are looking north to Canada.

It’s easy to understand why the USA is an attractive market for companies looking to invest overseas. It ranks sixth in the World Bank Ease of Doing Business Survey, it represents 25% of all economic activity globally and it is home to a quarter of the top 500 companies in the world. It has offered a reliable and consistent record of economic growth, giving businesses considering expanding into the USA the confidence they need to grow their footprint.

However, the size and scale of the US economy can prove challenging for companies planning to expand into this market. The federal system, with legislative requirements varying by state, makes the USA sometimes feel like 50 separate jurisdictions. Plus, 2017/18 have proven to be an uncertain time with a new administration flexing its muscles, issuing executive orders and proposing changes to existing policies.

From tax changes to tariff disputes, businesses are having to react to a changing competitive and commercial landscape. Another area our clients are finding challenging are changes in immigration policies brought forward by US President, Donald Trump. These are adding additional complexity, making it more difficult to bring talent in from overseas and more competitive to recruit the limited home-grown equivalents.

Immigration policies

In April 2017, Donald Trump, introduced ‘Buy American and Hire American’, an executive order which reformed the H-1B visa program to the benefit of American workers. This order aims to facilitate an environment with higher wages and employment for American workers and this general attitude seems to have also pervaded other visa programs, such as the L1 intra-company transfer scheme which now has additional interview steps included. The plans will also limit work permits for spouses of those who receive visas.

These changes have slowed down the process and reduced the number of successful applicants. This is putting some business off plans which involve sourcing numerous staff from overseas. The restriction has particularly impacted the tech industry, which hires specialist, but geographically diverse staff. The real question is how quickly can the domestic economy fill the gaps and provide these multi-nationals with local alternatives to this international talent pool.

New complexities for global business

American businesses are struggling to find talent, particularly in tech and STEM positions. Apple for example have taken their complaints straight to the President, whereas Microsoft have opened an office in Canada to compensate for the uncertainty around talent. Infosys have focused on robust internal training programs and some businesses have joined forces with local education initiatives. All adding much more complexity and challenge to doing business in the USA.

The competition for talent

Canada is not only taking notice, they’re taking advantage of this opportunity to lure investments through their immigration policies, which make it possible to obtain a work permit within two weeks. They are playing the talent game and in June 2017 launched the ‘Global Skills Strategy’, fast tracking highly skilled workers from abroad. This has attracted foreign tech companies and start-ups.

This competitive stance is nothing new with SR&ED (Scientific Research and Experimental Development), tax credits already being offered Federally and Provincially. These were designed to attract multi-nationals to locate their R&D departments in Canada as opposed to the southern alternatives, for example California.

Another program recently developed in Canada are “Innovation Superclusters” which are designed to attract 50,000 new middle class jobs over the next 10 years. There are five Superclusters that include AI, Oceans, Protein, Digital and Advanced Manufacturing.

Alongside lower cost property, similar international outlook and skill/language skill,s these initiatives have already made Canada a realistic alternative to the USA for some businesses. Recent immigration changes are additional fuel to the fire and in some instances will be enough to tip the balance in Canada’s favour.

Contact our local TMF Group experts

TMF Group has the local knowledge to help you identify and face any challenge or opportunity for your business. Whether you want to set up in the US or Canada or just want to streamline your American operations we have the local knowledge to help. Talk to us today.

Learn more about TMF Group in the US.

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