E.g., 09/24/2023
E.g., 09/24/2023
Canada's New Tech Talent Strategy Takes Aim at High-Skilled Immigrants in the United States
Graphic image of man's hand touching screen with word skills

The global competition for talent is heating up as more countries introduce policies to make it easier to attract, admit, and retain immigrants with sought-after skills such as those in science, technology, engineering, and mathematics (STEM) and in fast-growing sectors such as health care. Canada struck the latest salvo in this contest with a new Tech Talent Strategy unveiled in late June. One of the most eye-catching elements is a new dedicated work permit stream that explicitly targets high-skilled immigrants in the United States who hold an H-1B nonimmigrant visa. This new pathway, which goes live on July 16, will provide over the next year up to 10,000 H-1B visa holders a three-year open work permit (meaning they can work for any employer) while crucially also offering work or study permits to their accompanying family members. The Tech Talent Strategy also seeks to woo digital nomads (workers working remotely in another country) and prospective entrepreneurs.

Canada has long advertised its immigration pathways to H-1B visa holders, who often face complications retaining their visa and transitioning to legal permanent residence in the United States. But moving from billboards to actual policy represents the most explicit effort yet by the Canadian government to market itself to talented workers who may have limited options to stay in the United States.

As Canada and countries including Germany, France, Australia, and the United Kingdom sharpen their attempts to compete for the skilled workers they see as most beneficial to their economic growth, the United States is sitting on the sidelines. Although long the premier global destination for immigrants drawn by the allure of the American Dream, the United States is operating with immigration policies, last revised in 1990, that are poorly suited to current and future economic, demographic, and social realities. Immigration will be key for driving future U.S. economic growth and competitiveness, therefore, the United States cannot afford to remain complacent. The question is whether Congress will face the reality that the country’s long-held ability to attract the world’s best and brightest—and retain them—may be waning.

Taking Advantage of U.S. Inaction in the Race for Talent

While H-1B visas offer hundreds of thousands of college degree holders the opportunity to work in the United States in skilled occupations—albeit in numbers far smaller than U.S. employers need—the way the visa program is run presents numerous challenges. Employer sponsors must renew their workers’ H-1B every three years. H-1B workers who are laid off generally have just 60 days to find a new employer sponsor if they want to remain in the United States, a challenge many faced amid a wave of layoffs recently in the tech sector. H-1B holders’ spouses—a large portion of whom are highly educated themselves—are not allowed to work in most cases. H-1B visa holders, particularly those already in line for a green card, cannot be promoted without additional paperwork for themselves and their employers. And for the many H-1B workers from China and particularly India, waits for green cards are impossibly long due to annual and per-country caps. If everyone currently in line for an employment-based green card stayed in line and remained alive, Indians would endure a nearly 200-year wait to secure legal permanent residence; Chinese would face a nearly 20-year wait.

Canada’s new policy toward H-1Bs smartly exploits weaknesses in the U.S. system: offering work and study permits for spouses and other family members and the potential for a permanent future. While Canada is offering temporary status, the Canadian system generally has more avenues for skilled workers to adjust to permanent status, particularly for those who have accrued Canadian work experience.

Canada's new policy is highly unusual in its explicit targeting of visa holders in another country. But the Tech Talent Strategy’s overall goals fit into a broader trend of countries positioning themselves to attract and retain talent with an eye to what their “competitors” are doing. Many advanced economies are dealing with shortages of workers across the skills spectrum, driven by a growing mismatch between jobs and available workers with the requisite skills, difficulties retaining employees in jobs with low wages or uncompetitive working conditions, and a shrinking workforce. Demographic projections suggest that these pressures will worsen as birth rates fall and workforces decline. Immigration can help address current and projected labor market needs, alongside other interventions such as reforming education and training curricula, both by admitting workers for hard-to-fill jobs and by slowing the rate at which populations shrink. In the case of the United States, for example, all population growth after 2042 is projected to come from immigration.

Strategies to Attract Talent

In recent years, governments have sought to attract immigrants with in-demand skills through a couple of approaches. Some countries have expanded pathways for immigrants with in-demand skills, whether by creating new visas, expanding existing pathways, or behind-the-scenes tweaks to make it easier to apply for and receive visas. Germany, for example, estimates it will need an additional 400,000 immigrants per year to meet labor market needs. Consequently, it recently approved reforms to its Skilled Immigration Act that will make it easier for immigrants to qualify for various skilled immigrant pathways (by relaxing certain German-language, education, and credential recognition requirements) and create a points-based, one-year visa for prospective jobseekers to come to Germany and look for work. Other examples include start-up and tech visas introduced by Canada, Chile, Estonia, France, Portugal, Singapore, and other countries to provide a new expedited pathway for workers and entrepreneurs (typically in tech-adjacent sectors), often accompanied by start-up support or even seed funding from government or industry bodies. The United Kingdom, Australia, and a handful of other countries offer talent visas to admit skilled professionals with specific skillsets. The United Kingdom’s High Potential Individual visa, introduced in 2022, provides a two- or three-year visa for graduates of qualifying universities, while Australia’s Global Talent visa is open to professionals with exceptional experience and high wages in certain qualifying sectors.

A second approach combines immigration opportunities with a strong marketing campaign to showcase the country as a destination for talented individuals. For example, Canada’s plans to promote itself as a destination for digital nomads follows in the footsteps of more than 38 countries and territories that have introduced dedicated digital nomad visas. Some of these programs repurpose existing visa provisions while others create new visas, but they all share a commitment to branding themselves as a destination for digital nomads and often, providing information and additional supports to help international remote workers prepare for their stay. Australia’s recent efforts to market itself as a destination for skilled workers via a new website, meanwhile, are getting attention—the site attracted more than 7 million hits in its first two months.

Retaining Recruited Talent

It is one thing to recruit talent; it is another to retain it, as illustrated by Canada’s attempt to attract H-1B visa holders and marketing efforts by other countries, Australia and Switzerland included, to woo foreign graduates of U.S. universities and other international talent.

International students represent an attractive pool for future skilled talent, given they possess degrees from host-country institutions, language proficiency, and cultural experience: all qualities that are readily recognized by local employers. Close to 6.4 million students pursued higher-level education abroad in 2020, up from 4 million in 2011, with nearly half enrolled in seven countries: the United States, the United Kingdom, Australia, Germany, Canada, France, and China.

Among their talent retention policies, some countries have sought to encourage international students to put down roots by providing them with work opportunities during their studies and/or after graduation. Germany, New Zealand, the United Kingdom, and United States, among others, allow international students to work part time while in school. But unlike the United States, countries including Australia, Canada, and Germany also offer a dedicated pathway for their international students to transition to work and stay on a longer-term basis after graduation. The main avenue for international graduates of U.S. universities to begin work in the United States is the H-1B visa. Yet these graduates must compete for the same 65,000 annual new H-1B visas with other foreign workers (20,000 additional H-1B visas are set aside for applicants who earned a U.S. graduate degree, giving foreign students just a small leg up; some additional new visas are available outside the cap). Although Canada’s new policy targets current H-1B visa holders, international students facing challenges getting an H-1B visa after graduation might benefit from other new or expanded employment and entrepreneur routes under the Tech Talent Strategy.

What the Tech Talent Strategy Means for the United States

What impact will Canada’s new policy ultimately have on U.S. ability to attract and retain international talent? Immigrant decision-making about where to go and for how long to stay is complex. Admission policies for applicants, rules on admission and eligibility for work and study for family members, and clarity about access to permanent residence are undoubtedly important considerations. But immigration policy also has to compete with the broader appeal of a destination country, including access to educational and professional advancement, pay and cost-of-living considerations, quality of life, prospects for economic growth and innovation, and the degree of welcome. Governments have far less leverage to shape and control this second set of conditions. So, it remains to be seen how effective Canada’s new policy will be in chipping away at the draw of the American Dream.

Canada’s move comes amid entrenched political paralysis on immigration in the United States. U.S. employment-based immigration policies were last updated in a meaningful way in 1990 but are built on a framework that dates to 1952. During these decades of congressional inaction, U.S. immigration policies have fallen out of line with U.S. economic needs and national interests. And while the vast, dynamic U.S. economy and U.S. cultural dominance remain a strong pull factor for the world’s best and brightest, the benefits and opportunities available to skilled migrants are much more difficult to access in the United States than in countries that offer faster and more flexible pathways to permanent residence. In addition, the U.S. benefits afforded to skilled migrants do not compare as favorably to those in countries that grant more work opportunities for spouses and supports for entrepreneurs.

Already, there are some warning signs. The U.S. share of international students has been falling (from 19 percent to 15 percent between 2016 and 2020), which could signal that the United States is starting to lose some ground in attracting talent. The United States faces the same labor market and demographic strains as other advanced economies and may likewise look to immigration in response. But the United States is letting other countries surge ahead in the global race for talent. Given that migration is driven strongly by networks of ties between sending and receiving countries, the ground that other countries are gaining in attracting skilled immigrants may have follow-on effects that perpetuate for years to come.

Ultimately, while the current administration has taken a series of steps to ease pathways for international students and workers, it will require congressional action for the United States to fully rejoin the competition for the world’s talent. Congress and the executive branch should focus on ensuring that highly skilled professionals desired by U.S. employers can not only come to the United States but can, without friction, access paths to permanent residence. One place to start could be easing pathways for talented international students to enter the U.S. workforce, and, if they are a good fit, to stay. And policymakers should focus on extending opportunities to spouses and children of skilled workers, on par with those offered by other countries.

Many, though far from all, U.S. policymakers recognize the growing competition for talent and the important role that immigration has played and will play in U.S. economic competitiveness, particularly in the face of population aging. However, political polarization makes all immigration policy topics difficult to broach.

The United States participates in the increasingly heated global race for talent disadvantaged by its inflexible, outdated immigration system. Broader acknowledgment that other countries are capitalizing on U.S. stasis and encouraging international talent to leave the United States to create opportunities elsewhere is an important first step to finding the political will to take action.