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Canada has been having success in attracting more high-tech companies and employees from the United States. This trend began in 2008, when such companies in the U.S. could not obtain the number of H-1B visas they needed due to the limited number available. Microsoft opened a development office in Vancouver at that time.

Since then, the problem for companies has only grown. The Trump Administration has made the H-1B program more restrictive and companies have to deal with even more uncertainty about whether they will be able to “capture” an H-1B visa. In response to President Donald Trump’s “Buy American, Hire American” Executive Order, even the cost of obtaining an H-1B visa is rising precipitously. This is due to the number of Requests for Evidence being issued (at close to 70% in the 4th quarter of FY 2017). In addition, denial rates are up and processing times, according to the American Immigration Lawyers Association (AILA), have almost doubled in the past four years. Even so, Silicon Valley and other areas of the U.S. (Texas, New York, and New Jersey) still draw high-tech companies and employees, but Canadian entrepreneurs are ready to take a bigger piece of that pie.

Such companies as Mob Squad in Canada are working on persuading some Silicon Valley companies to move workers to Canada. Mob Squad works as an intermediary to bring employees to Canada in four weeks’ time. It is less expensive to live in Canada than it is to live in San Francisco, therefore salaries can be lower. Applying for permanent residence is faster and less burdensome than it is in the U.S. For some foreign nationals, the last straw has been the Administration’s threat to eliminate H-4 EADs. For others, it is the long waits for H-1B adjudications that have left them without U.S. work authorization.

In the meantime, the Canadian government is working hand in glove to fast track high-tech workers. In 2017, the Trudeau government started the Global Talent Stream Program to grant work permits in a few weeks’ time. In the midst of the NAFTA debate, Prime Minister Justin Trudeau brought his “charm offensive” to the San Francisco Bay Area and offered “a two-week, fast track employment permit for certain workers, dubbed the ‘global skills strategy visa.’” He stated: “We know that bringing in great talent from around the world is an enormous benefit, not just to the companies that want to do that, but to Canadian jobs and to our country as a whole, so we’re going to continue to do that . . . . “ The results are clear. “Toronto’s tech scene is so hot the city created more jobs than the San Francisco Bay area, Seattle and Washington, D.C., combined last year, while leapfrogging New York in a ranking of ‘talent markets.’”

 

The North American Free Trade Agreement (NAFTA), signed into law in 1993, eliminated trade barriers and increased investment opportunities between the three signatory countries, the United States, Mexico, and Canada. After more than 25 years, the agreement was seen to require revisions, particularly as to labor, digital trade, and data flows. A revision to NAFTA, called the United States, Mexico, Canada Agreement (USMCA), has passed both the House of Representatives and the Senate with broad bipartisan support.

The new treaty is expected to become effective in the spring of 2020, after ratification in Canada. A proposal to the USMCA would have changed the Treaty NAFTA visa (TN visa), but it did not materialize.

During the negotiations, in accord with the President’s “Buy American, Hire American” Executive Order, the Trump Administration reportedly wanted to reduce the scope of TN visa status by limiting the number of eligible professions and, possibly, capping the number of visas available. Canada and Mexico wanted the opposite – to expand the number of eligible professions and update the listed professions to bring them more in line with current technological demands. None of these changes were incorporated into the USMCA.

However, the Department of Homeland Security is applying a higher level of scrutiny to the TN visa category. New guidelines were issued regarding the economist category. Now, a broad range of other professions related to economists, such as financial analysts, market research analysts, and marketing specialists, will no longer qualify for TN visas. Credentials are being questioned and even those who already hold TN status may have renewals denied.

Canadians are seeing additional restrictions at Ports of Entry. Previously, it was possible for a Canadian citizen to obtain L-1 visa status, either for an initial approval or a renewal, at the border, without having to file an application with USCIS. However, in 2019, without issuing any policy memo, Customs and Border Protection (CBP) began refusing to adjudicate anything other than an initial L petition or applications for intermittent or commuter Ls at the border. All other categories of Canadian L visas now require costly filings by petitioning employers with USCIS. Employers can expect long processing times, or having to pay an additional $1,440 fee for expedited “premium processing,” not to mention dealing with the costs and delays of Requests for Evidence this type of visa has drawn lately.

In the meantime, Canada is taking advantage of stricter scrutiny of all U.S. work visas by “inviting” frustrated companies to move their offices, or just their employees, to Canada. Even during the USMCA negotiations, Canadian Prime Minister Justin Trudeau was encouraging companies to consider their new two-week fast track employment visa process. Whether this will affect U.S. policies, remains to be seen.

If you have any questions about TN or Canadian L visa statuses, or the USMCA, please reach out to a Jackson Lewis attorney.