OTTAWA – Prime Minister Mark Carney has identified a potential opportunity for Canada to attract global tech talent, especially in light of the U.S. government's recent decision to impose a $100,000 fee for new applications for the H-1B visa, aimed at skilled workers. This visa, essential for many professionals in the tech industry, is typically valid for three years and is predominantly utilized to recruit individuals with specialized skills, particularly within computer-related fields.

Since 2012, approximately 60 percent of H-1B visas have been awarded to applicants in the tech sector, signaling the importance of this visa type. Initially, the application fee was set at $215, which has now dramatically increased. The Trump administration’s reasoning for this significant hike centers around the protection of American workers. It argues that the influx of foreign workers undercuts wage levels, as these individuals may accept lower salaries compared to their U.S. counterparts. Consequently, businesses could be incentivized to hire less-expensive foreign talent, resulting in job losses for American workers.

The Economic Policy Institute highlighted that 60 percent of H-1B visa positions were paying below the median wage for the respective jobs, further arguing that the visa program needs reform to protect local employment.

Prime Minister Carney sees a silver lining in this context, as he believes the higher visa fee may deter many skilled workers from migrating to the U.S. Carney remarked, “Not as many of those people are going to get visas to the United States. And these are people with lots of skills that are enterprising, and they’re willing to move to work.” He emphasized that Canada plans to leverage this situation to enhance its attractiveness to international tech talent.

However, despite this opportunity, Carney acknowledged that any welcoming of skilled workers will take place alongside the government’s plans to reduce both temporary and permanent immigration levels. The existing target is to minimize non-permanent residents in Canada to 5 percent of the population by the end of 2027, a plan that is under review with an updated immigration levels plan expected to be released soon.

Challenges may arise as Canadians also seek opportunities within the U.S., utilizing alternative visa options like the TN visa stemming from the Canada-United States-Mexico Agreement (CUSMA). This alternative may shift the focus of American firms towards hiring Canadians rather than seeking international candidates, especially if the H-1B fee exacerbates local labor shortages.

Insiders like Benjamin Bergen, from the Council of Canadian Innovators, noted that some American companies may exploit loopholes by hiring tech talent for Canadian branches before transferring them to the U.S., further complicating the competitive landscape.

Income disparity also plays a significant role in talent migration. Senior policy analyst Angus Lockhart pointed out that American tech jobs generally offer salaries about 46 percent higher than comparable roles in Canada, leading many skilled Canadians to gravitate towards the U.S. for better financial prospects. The allure of the H-1B visa, which provides a longer residency path in the U.S., adds to this incentive.

To attract and retain tech talent, Canada must create a compelling environment for tech companies to thrive. Bergen suggested that beyond simply reacting to American policy changes, Canada should focus on integrating Canadian-produced technology within public service sectors as a strategy to bolster the local ecosystem. He noted that countries like Denmark and Israel have successfully employed this civic procurement model.

Furthermore, the structure of the H-1B application places the financial burden on employers, who bear the cost of the $100,000 fee. This could deter firms from hiring international workers for lower-paying positions, as highlighted by Lockhart, who stated that while high-level talent may still be in demand, the fee poses a dilemma for businesses looking to fill roles at the lower end of the tech pay scale.

This shift in immigration policy and its implications for both Canada and the U.S. presents a complex landscape for tech talent migration moving forward. As the Canadian government prepares to respond to this evolving scenario, the potential for enhanced recruitment of skilled workers from abroad hangs in the balance.