Don’t Blame Canada For Raiding America’s Tech Talent

(Bloomberg Opinion) -- America’s prosperity depends on attracting foreign talent. Yet due to a dysfunctional immigration system, millions of workers face insurmountable hurdles to gaining permanent residence. It was always a risk that other governments would take the opportunity to lure skilled workers away from the US. Now it’s happening, thanks to a somewhat unlikely rival: Canada.

Last month, the Canadian government introduced a new work permit targeting US-based knowledge workers. Foreigners living in the US on H-1B visas — typically professionals with skills in STEM fields — are eligible for a three-year work permit allowing them to work for any employer in Canada. Spouses of visa holders are free to pursue employment — unlike in the US, which restricts their ability to work.

Canada said it would accept up to 10,000 applications from interested H-1B visa holders in the program’s first year. It got that many in less than 48 hours. The government’s already received requests from Canadian tech companies asking that the program be doubled.

This talent-poaching scheme is a model of creative policymaking, and should be causing alarm in Washington. Once the world’s most desirable destination for science and engineering talent, the US is now losing tens of thousands of foreigners each year to Canada, Australia and others. It’s easy to see why. In theory, workers on employer-sponsored H-1B visas can stay in the US for up to six years, then apply for permanent residence. Yet nonsensical rules, bureaucratic paralysis and caps on the numbers of green cards issued to citizens of any single country mean the wait can last decades. Some Indian workers with advanced degrees face estimated queues of more than 150 years. (The posthumous green card would be a characteristically American innovation.)

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In Canada, the process takes as little as six months.

Meanwhile, workers and their families in the US are at the mercy of the technology industry’s shifting labor demands. The US requires that H-1B visa holders who lose their jobs find another employer to hire and sponsor them within 60 days or face deportation. At least 50,000 have had their visas revoked since last fall, when giants like Amazon and Meta started shedding staff amid a slump in tech stocks. Facing this uncertainty, even H-1B workers who’ve kept their jobs are taking up Canada’s offer to move there instead.

The US will pay for this abject policy failure. H-1B workers hand over at least $85 billion a year in federal and state income taxes, support Social Security and Medicare through payroll taxes, and generate tens of billions more in consumer spending. Far from replacing native-born workers, each H-1B visa holder in the US creates roughly two new jobs, by enabling companies to invest in domestic expansion rather than send positions overseas. If scientists and engineers keep leaving, many of their would-be employers will follow — eroding US productivity, reducing economic growth, and lowering living standards.

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President Joe Biden should call on Congress to admit more immigrants with the skills businesses need and grant them permanent residence more readily once they’re here. Canada is teaching the US a useful lesson. It’s to be hoped Washington is paying attention.

—Editors: Romesh Ratnesar, Clive Crook