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H-1B Headaches: Why US Companies are Moving to Canada

Is the H-1B visa program causing you more stress than relief? Find out why a Canadian business expansion could be just the cure you’re looking for.

As the H-1B visa program in the US has become increasingly complex and unpredictable, tech companies are looking beyond their borders for a more effective way to attract and retain top global talent.

Expanding to Canada is a solution that allows US companies to avoid the headaches involved with the H-1B program while still tapping into the global talent market – and taking advantage of the many other location benefits.

Let’s explore the H-1B problem further and see why Canada could provide some much-needed relief.

What is an H-1B visa?

The H-1B visa is a non-immigrant visa that allows US employers to temporarily employ foreign workers in specialty occupations, such as IT, finance or engineering. Employers must apply for H-1B visas on behalf of candidates who, if approved, can stay in the US for three years and apply for an additional three-year extension after that.

It seems like a win-win scenario for both parties. Companies can access great talent from across the world and qualified candidates get the opportunity to live and work in the US. However, due to immense demand, there’s a hard cap on the number of visas available each year and they’re granted via a random selection process (called the H-1B lottery) each spring.

How are employers and workers affected?

Even with the cap, hundreds of thousands of H-1B applications are registered by thousands of companies each year – in hopes of recruiting and retaining top global talent.

To give you a sense of how few H-1B hopefuls are accepted, let’s look at the last three years:

H1B Visa Data

Source: H-1B Electronic Registration Process, USCIS, April 2022

As you can see, out of all the registrations, only a small percentage of H-1B visas are granted each year – and the acceptance rate is on the decline, meaning that unless there are substantial changes to the policy, the coming years will see companies and workers scrambling to find alternative solutions that are more predictable and in their control.

For an increasing number of US companies, the promise of securing top talent isn’t enough to take on the risk and uncertainty that comes along with employing H-1B holders.

Finance and HR teams are busy enough as it is. Spending extra time and resources on the H-1B registration process – including fees that can cost the employer anywhere from $1,700 to $6,500 per selected applicant – only adds to their struggle.

On the other side of the coin, talented foreign workers who once dreamed of a life in the US are considering more realistic options and shifting their gaze to countries with more open-armed immigration programs, like Canada – which is the top destination for global talent according to Boston Consulting Group.  

So, if the H1-B program isn’t helping companies or talent, there’s somewhere else they can turn.

Making a case for Canada

Consider this: If the world’s best talent is looking for work outside of the US, isn’t that where your company would want to be?

Establishing a business entity in Canada not only gives your current H-1B holders a place to call home, without worrying about losing the lottery every three years, it can help you attract new talent and take advantage of all the other benefits of doing business north of the border, like these:

  • Pro-business environment: Canada has a stable and predictable business environment with low taxes, favourable regulations and a supportive government.
  • Strategic location: Canada is strategically located near the US and has strong trade ties with both the US and Asia, making it an ideal location for businesses looking to expand into new markets.
  • Streamlined immigration system: Canada has one of the most efficient business immigration systems in the world, with some applications being processed in as little as two weeks.
  • Improved quality of life: Canada is known for its high standard of living, with a strong social safety net and a high quality of life for employees.
  • Diversification: Expanding to Canada can protect against economic uncertainty and can help businesses diversify their operations, reducing risk and increasing stability.
  • Access to government funding and incentives: The Canadian government offers various funding and incentives programs to support business expansion and investment.

Plus, Canada works in the same time zones as the US, has a similar working culture and has daily flights departing from Canadian international airports to anywhere in the US.

Are you convinced yet?

Did you know?

Waterloo is one of the top 5 destinations in Canada for immigration. We welcomed nearly 28,000 new immigrants from 2016 to 2021, which is double the previous five-year period.

We can help

If a Canadian expansion sounds like a much-needed cure for your H1-B headaches, we can help.

Waterloo EDC is a complimentary concierge service that helps growing businesses locate, re-locate or expand to Waterloo – a fast-growing community that’s known for its thriving business ecosystem, world class post-secondary schools and proximity to Canada’s largest city, Toronto.

City Life in Uptown Waterloo

Worth exploring? Here’s how the next few steps would work:

  1. Connect with local economic development experts (that’s us). We’ll help you develop a custom expansion plan, introduce you to local experts and business leaders, find real estate/office space and navigate the various government immigration and funding programs. And all our services are completely free.

How? We’ll start by having a 30-minute call to meet each other and discuss your current situation and challenges. We’ll use this time to give you some background on what we do, too.

  1. Create a plan. We’ll gather all the details we need to map out a plan – including the size of your team and what type of office space you need. You can model your expansion after companies that have come to Canada before you, like Google, MasterClass and Enlighted to name a few.

How? We’ll meet with you and your team to ensure we have a strategic plan in place. During this phase, we’ll share data, success stories and other resources that will help you build a strong case for expansion in Waterloo.

  1. Connect you with experts. Next, we’ll connect you with legal, tax, and immigration experts who can assist you during each step of the expansion process. For example, to tap into Canadian immigration programs, you’ll need to establish an entity in Canada and have a Canadian bank account. An experienced immigration lawyer can help you find the best program for your needs, like moving a large group of employees to Canada at once, for example.

How? We’ll set up introductory calls with our trusted expert partners so we can bring them up to speed on your situation and needs. We’ll stay by your side throughout the process so we can help translate anything that’s confusing and share learnings from other clients that have moved here.

  1. Set up your office. This is when things start to feel real. We’ll help you find the right real estate for your expansion needs. Depending on the size of your team and what type of physical space will be most conducive to meeting your goals, there are lots of options.

How? First, we’ll establish what type of office space you need – whether it’s a shared workspace, an innovation outpost or a full-scale office space. Then we’ll send you a list of options to consider, with an option to visit your top options in person during a trip to Waterloo.

  1. Bring your people here. Working with your immigration lawyer, we’ll assist you with government applications to make sure everyone gets here. Unlike the US, Canada’s work permit policy is not limited by a lottery or annual quota. Canadian immigration is family friendly as well as accompanying spouses and common-law partners are able to obtain an open work permit, too. Most importantly, there is a clear pathway for qualified foreign workers and their family members to obtain permanent residence to make Canada their home. Some programs require a referral, which we can provide. Once you’re here and settled, we’ll help you get integrated into the business community and start building your team.

How? We’ll help you with your LMIA (Labour Market Impact Assessment), background checks and other admin details so your new employees can be working in Canada within a few months. We can also connect you with local leadership candidates who can help you grow your business and team.

" When you hear the word immigration you think ‘long process, complex government forms and scary background checks’ and it often deters companies from exploring immigration as an option. But, it’s easier than you might think. "

Erin D’Alessandro

Director of Business Development & Client Services, Waterloo EDC

Learn more

Expanding your business in Canada doesn’t have to be a long process. In fact, it can happen within months with the appropriate guidance and support. Ready to get the conversation started? Contact us to get in touch with one of our Market Development Managers today.

If the timing isn’t quite right, we’d love for you to keep Waterloo in mind. You can watch this webinar to learn more about Canada’s business-friendly immigration programs or subscribe to our blog to get all the latest news and updates from Waterloo right to your inbox.