Jun 25, 2022 - Technology

Canada aims to make America's tech talent loss its gain

Illustration of the Canadian flag composed of tech circuitry.

Illustration: Rebecca Zisser/Axios

Canada sees a big opportunity in drawing tech talent north of the U.S. border and is making moves to seize it at every turn.

What's happening: Canada’s approach to immigration laws, increasing government support and a polarized U.S. have helped lead the Great White North into a tech boom.

Why it matters: As U.S. tech giants face continuing difficulties in bringing in foreign high-skilled tech workers, Canada is adding more and more.

  • Toronto is quickly catching up to San Francisco and New York as a top city for tech talent.

By the numbers: In 2021, Canada announced that it had welcomed the most immigrants in a single year in its history. Meanwhile, immigration to the U.S. in 2021 sharply declined by almost 50%.

  • Canada’s startup scene has thrived, with venture capital invested in startups jumping from $2.1 billion in 2016 to $13.7 billion in 2021, per Pitchbook data.
  • In April, Canada said it would dedicate $1 billion (about $780 million USD) over five years to create an agency focused on investing in science and technology innovation.

Between the lines: Canada's gains in tech talent started during the hard-line immigration policies of the Trump era, which seems to have pushed people out of the U.S. as much as it lowered domestic immigration rates.

What they're saying: Canada wants to be the go-to place for tech entrepreneurs, governments leaders said last week during onstage interviews at Toronto's Collision tech conference.

  • “For me, it's not good enough to be in the parade. We want to lead the parade,” said François-Philippe Champagne, Canada's minister of innovation, science and industry, during an onstage interview.
  • "Immigration is the greatest competitive advantage we have," said Sean Fraser, Canada's minister of immigration, during an interview with Axios at Collision. "Immigration isn't what we do, it's who we are."

Context: Immigration is far less politicized in Canada than it is in the U.S., and Canada's parliamentary government system makes it easier to pass immigration laws based on current economic need or global climate.

  • In 2017, Canada launched a Global Skills Strategy visa program to make it easier to bring in foreign workers with specific technology or business skills, allowing firms to have a position pre-approved and get visas within two weeks — a stark contrast to the months-long U.S. visa process.
  • The Canadian government is also aiming to pass a bill that would speed up immigration supporting particular labor needs based on sector, Fraser said.

Be smart: The biggest and richest tech companies in the world are all U.S. born. But Canada's leaders think that could change fast.

  • Fraser pointed to Canadian company Shopify, founded by a German immigrant: "We're trying to set the stage so people around the world say, holy smokes, Canada is begging us to come to business there, and providing us with the tools we need to succeed once we come."

Meanwhile, in the U.S.: The tech industry is struggling with a massive immigration backlog, as Axios previously reported.

  • Excruciatingly long waits for green cards means the U.S. loses out on tech talent, resulting in calls for fixes to the system from major companies like Microsoft and Google.
  • The U.S. has an annual limit of 85,000 H-1B visas per year, far too few for the number of applicants. Canada does not have a similar cap.

Yes, but: Canada has its own backlogs.

  • There are complaints that Canada's Startup Visa Program, launched in 2013 and meant to draw people to start companies in Canada, is too slow.
  • Canada must also make room for its new residents: "We have to do some long-term planning to make sure that we establish a greater absorptive capacity in our communities," by building new housing, said Fraser.

The bottom line: Canadian government leaders are bullish that immigration and tech sector growth is key to economic success.

  • "Beyond the magic with these world-class cities like [New York and San Francisco] ... the tech opportunity in [Toronto] is every bit as large," said Fraser.
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