Canada Hopes Trump’s $100,000 Visa Fee Redirects Talent North
A worker inspects Bitcoin mining machines at a computation center in Joliette, Quebec.
(Bloomberg) — For years, Canada’s highly-skilled industries such as technology and health care have suffered a brain drain to the US. Some executives believe President Donald Trump’s move to make H-1B visas more expensive will change the dynamic.
Most Read from Bloomberg
Trump signed an executive order Friday imposing $100,000 fees on new H-1Bs, creating confusion and frustration for companies that rely on the program to bring in global talent in computer programming, engineering and other roles.
The fee is a significant opportunity for Canada, according to some tech industry players, at a time when the country is seeking answers to low productivity growth and the economic drag of US tariffs.
“Cities like Vancouver or Toronto will thrive instead of American cities,” Garry Tan, CEO of famed San Francisco startup incubator Y Combinator, which has helped start Airbnb Inc. and Stripe Inc., said in a post on X. Trump’s policy is a “massive gift to every overseas tech hub” by erecting a “toll booth” for smaller US firms to hire talent, he said in the post, which was later deleted.
Companies including Amazon.com Inc., Microsoft Corp. and Alphabet Inc. already maintain offices in major Canadian cities and could accelerate hiring there to skirt the US fee — while also paying lower salaries than those south of the border. Amazon had more than 8,500 corporate and technology employees in its tech hubs in Vancouver and Toronto as of a year ago, according to information disclosed by the company. Microsoft had 2,700 staff in a development hub in Vancouver as of April.
During a speech in New York on Monday, Prime Minister Mark Carney observed that Canada’s universities are some of the biggest producers of talented graduates in artificial intelligence and quantum computing, but “most of them go to the United States.”
Then he added: “I understand you’re changing your visa policy here, so we’re going to hang on to a few of those.”
Currently, the world’s top computer science schools funnel graduates into American tech hubs, thanks in part to H-1B sponsorships. Canadian citizens in many professions have an easier route through so-called “TN visas” under the US-Mexico-Canada Agreement.
Higher salaries and better weather are part of the attraction for Canadian-educated engineers. The median tech worker earns 46% more in the US than in Canada, according to a 2023 report from The Dais, a public policy and leadership think tank at Toronto Metropolitan University.
“That’s been Silicon Valley’s playbook for many years, and all the top talent have been moving to the US,” said Dan Burgar, co-founder of Frontier Collective, a nonprofit that supports emerging tech startups in Vancouver. The new US fee means “they’re closing the door on the very talent that built Silicon Valley.”
Prior programs to tap that international labor pool in Canada have indicated strong demand.
In 2023, Canada offered three-year work permits to current H-1B visa holders. The limit of 10,000 applications was reached within 48 hours, according to Martin Basiri, an entrepreneur who worked with the government on the program and who founded a company to match people with jobs.
He wants the Canadian government to bring back a similar program. This time, it should be tied to firms creating new jobs in Canada, in light of unemployment above 7% and concerns about immigration levels in the country, Basiri said.
The trick will be wooing people and enterprises that will boost growth but not exacerbate pressure on housing and infrastructure — some of which are also issues in secondary tech hubs such as Ireland, which attracted technology companies in part with relatively low corporate tax rates.
“We relied in the last decade on population growth to prop up GDP growth, and I don’t think that’s a sustainable model,” said Daniel Foch, founder of Valery.ca, a Toronto-based real estate tech startup.
“We need companies like Amazon and Apple,” two of the largest users of the H-1B program, “to want to move some of these jobs to Canada and get that positive economic growth.”
Competition
To be sure, other countries including the UK will likely try to lure those technology and medical workers, too, and some might offer lower tax rates than Canada. “We need to create more compelling advantages” than simply proximity to the US, said Foch.
And while Canada might attract skilled immigrants as a result of the H-1B visa fee, the benefits may be offset if Canadians are wooed to the US to replace workers from other countries. Canadians in fields such as engineering and health care have access to the TN visa at low cost to American employers.
In lieu of H-1Bs, US firms may try to bring in more Canadians using that channel. In 2023, nearly three-fifths of Canadians holding TN visas were in California, New York or the state of Washington, three primary states for technology, according to a report by the Baker Institute.
In health care, US hospitals may be reluctant to pay the $100,000 fee, exacerbating a doctor shortage in the US, according to Raywat Deonandan, an epidemiologist and associate professor at the University of Ottawa.
That could simply make the American health care system even hungrier for Canadian talent. But in a possible acknowledgment that Trump’s fee could backfire in some sectors, the White House on Monday said doctors may be exempt.
For now, in technology, some Canadians are keen to try and benefit from stricter US borders. “We’ve got to take more risks. We’ve got to stop being polite,” Burgar said. “We’ve got to stop being, you know, too Canadian.”
