‘Audacious’: Canada offers work permits to lure tech workers in the U.S., but will they come — and stay?

It was soft-launched Sunday morning and closed on Monday evening after it reached the cap of 10,000 applications.

The speed at which the spots were filled did not surprise those practising immigration law, who have been fielding inquiries by prospective candidates since Immigration Minister Sean Fraser announced the plan in late June as part of Canada’s first Tech Talent Strategy.

“That’s what we anticipated and that’s exactly what happened,” said Toronto-based immigration consultant Kubeir Kamal, who helped a number of clients apply for the Canadian program but still had three missing the tight timeline.

There are some 600,000 H-1B visa holders in the U.S., who have professional backgrounds in a variety of high-skilled occupations in biotechnology, chemistry, computing, architecture, engineering, physical sciences and health care, among others. But the majority are from India and work in IT.

The American visa allows foreign workers to stay for up to six years. But the holders must leave the U.S. if they lose their jobs and can’t secure another employer within 60 days or fail to obtain their green cards (a permanent residence document) by other means.

The number of new H-1B visas issued annually is capped and they are awarded through a lottery system.

Many H-1B visa holders are at risk of losing their status because of the volatile economy.

According to U.S. Citizenship and Immigration Services, about 50,000 foreign workers had their H-1B visas revoked between October 2022 and April 2023, after they lost their jobs. Of those, only 38,000 managed to get a green card or obtain another non-immigrant status.

But the Canadian program is likely aimed not only at people who have just lost their jobs, experts say.

Jack Kim, a corporate immigration lawyer at Fragomen’s Toronto office, called Canada’s special program “audacious” because it directly targeted candidates already in a third country’s talent pool.

“The people that they’re targeting seem to be the people who are looking for an insurance policy,” said Kim. “They have H-1B visas. They have some sort of solution in the United States. But because of the layoffs going on or because of what’s happening in America, they decided to have an insurance policy.”

The Canadian program offers study or work permits for the accompanying family members of the principal applicants. The recipients of the Canadian open work permits are not obliged to move to Canada or work for a Canadian employer, Kim noted.

It’s a good option for American employers who have employees’ H1B visas expiring soon, he said, because their foreign employees can now potentially work remotely in Canada, in the same time zone, rather than return to their country of origin.

“This is actually a true parking program,” said Kim. “In most Canadian work permit categories, they require some sort of Canadian nexus. You have to work for a Canadian company, have Canadian projects or report to a Canadian manager. This is not the case.”

Immigration lawyer Mark Holthe said Canada can’t compete with the U.S. when it comes to wages and job opportunities but it offers clearer and quicker pathways for permanent residence, as well as attractive social benefits such as public health care and safety.

“Look, these individuals clearly are going to be making $50,000 to $100,000 more working in the same jobs in the U.S.,” said Holthe, who is based in Lethbridge, Alta. “So it’s not a money thing. So you’re trying to instil in them confidence in the country and this is a place you want to come and live in.

“I don’t think you can say that they’re going to be better off economically by coming here. They’d be worse. But it’s all the other social things. What’s really important to you as you get older and you start to have kids and you start a family and those things? That’s the target market we’re hitting now.”

Canada taxes based on residency, which could mean an open work permit holder won’t need to pay income taxes if working remotely in the U.S., but Holthe said that scenario is unlikely.

“The only reason they can keep their status in the U.S. is because they’re employed with a U.S. company,” he said. “So they’d never be in a situation where they’re deciding to stay in the U.S. and just work for the (Canadian) company unless it’s like freelancer on the side.”

Kamal believes the ultimate goal of Canada’s new program is to create a talent pool for the duration the workers are here to attract more companies to set up base in the country. Many of these newcomers, he said, will likely return to the U.S. after obtaining their permanent residence — and maybe citizenship.

Software companies in Canada such as Shopify and Google, too, have laid off people, including temporary foreign workers, said Kamal, and many of the workers already here are frustrated at the prospects of more direct competition for the coveted permanent residence spots.

“At the end of the day,” said Kamal, “it seems like Canada would become the outsourced option for the American companies. And if that is what the Liberals are trying to do, maybe they are in the right direction.”

Kim said it remains to be seen how the Canadian government is going to measure success in this program.

“There is a huge bet that if somebody does decide to come to Canada at some point in time, they will decide to remain here,” he said. “If you have 10,000 people and 10 per cent decide to remain, you still attracted a thousand people. Maybe that’s the bet here.”