Can Canada Trump the United States?

March 24, 2017

The current state of the foreign labor market in the United States is in limbo. The country has suspended the fast processing of H-1B visa applications, which are popular with technology companies.

The current administration is arguing that this specific visa class has been exploited by companies who in turn bring in low-cost foreign workers, while leading technology companies have been left uncertain about the future of their workforce. Capped at approximately 65,000 foreign individuals a year, not including those graduating from American post-secondary institutions, the H-1B non-immigrant visa allows American companies to employ graduate-level workers in specialized fields.

With growing employment uncertainty for American technology companies, their current foreign workforce, and aspiring applicants, can the concerns south of the border be leveraged for gain in Canada?

Following a series of consultations with the nation’s technology leaders, the Canadian government has crafted a policy response seeking to expand upon available specialized temporary foreign skilled workers in the country in the hopes of accelerating innovation. Canada’s Global Skills Strategy seeks to grow Canadian businesses, create more Canadian jobs and foster a competitive edge against the best companies in the world, by attracting skilled workers. The program is aimed at a June start.

The key assessment, per the government’s assessment, holds in closing the skills gap in Canada for firms looking to grow their information technology demands. A key aspect of Canada’s response is that rather than taking months, applications can be processed within two weeks, with the option of extending visas, and eventually progressing to permanent status. The strategy seeks to introduce a new work permit exemption for short-duration work terms and initiate faster processing for global talent, by facilitating and accelerating investments that create jobs and growth for high-growth Canadian companies, and for global companies that are looking to make investments in the country, to relocate, or to establish new production or expanding subsidiary ventures in Canada.

The focus on creating new jobs and gaining talent in Canada has the government assuming that this process will be largely driven by employer action and depending upon them to initiate the desired momentum. The government seeks to provide Canadian technology sector the talent that it needs, with the hope that investments will help develop a talent pool and snowball into a burgeoning industry.

So, why choose Canada?

The current strategy is dependent on the initiative of employers. Though a step in the right direction, more needs to be done to leverage the positives of Canada’s technology sector.

Developing “Silicon Valley North” and marketing it as a brand is necessary because of the growing presence of technology in all aspects of Canadian life, from finance to agriculture, technological innovation is changing the manner in which business is conducted. Now moving beyond an avid consumer base for technology products and services, the country can highlight its major technology hubs and those cities, the availability of opportunity, with overall quality of life, and market Canada as the place to be to create and develop technologies, for prospective employees.

Just take the average cost of living in major Canadian cities as an exploration. Using data from Numbeo that equalized net income earnings in three Canadian cities against San Fransisco, with all other things being equal, you can assume that consumer prices including rent in Vancouver are 46% lower than in San Fransisco, and the consumer index including rent in Montréal is 57% lower.

Holding the middle of calculated cost totals against the American metro of technological innovation is Canada’s largest city, Toronto, with a consumer price index including rent at a discount of 50%—but holding onto a surprising local purchasing power of 17% higher than in San Fransisco, making each earned dollar in the city approaching nearly a fifth of extra surplus value for the GTA consumer.

Now despite the overwhelming cost positives, there are challenges for potential tech workers in the country. Take for example the housing challenges in markets such as Vancouver and Toronto. Let alone for foreign workers, this is has become a real challenge for the inhabitants of each city. Though the influx of skilled and specialized workers, as the government expects, will be high paid workers, more needs to be expected from policy makers to make Canada structurally appealing for developing “Silicon Valley North.”

The opportunity of work visa and entry restrictions in United States has opened a strategic marketing opportunity for Canada.

Put simply, the expected onus of employers by the Canadian government to alone increase the available skilled workforce, and in doing so create a vibrant technology sector in the country, is wishful thinking. To make Canada the place to be for technological innovation there needs to be a converted effort to surpass conventional wisdom, moving beyond California’s Bay Area, reinforcing the viability of the job markets in Vancouver, Toronto, Montréal, and more, for both foreign workers and Canadians employees. There exists a need to effectively market Canada and address the structural issues at play.

The single best strategic leverage for developing the technology sector in Canada rests in the non-monetary incentives that make it unique. Behavioral science has found that more than just a job and a salary, people are looking for an experience. Research has found that offering people a non-monetary experience is more of an motivating force than giving people a monetary transfer equal to the cost of the object at interest.

Policy makers, employers, recruiters, and aspiring applicants should acknowledge this reality and should understand that the role of non monetary incentives are a real player in framing decisions, especially when it comes to employment. Further, when an individual frames a decision, one key cognitive bias often at play is the availability bias. The availability bias finds that people tend to give greater weight to to what comes to mind more easily, often framed by popular sentiments or recent events. And problematically for Canada, when it comes to the technology sector, when potential candidates seek out opportunities in the job market they think inherently about Silicon Valley first.

The proactive marketing of “Silicon Valley North” is a necessity, and coupling the financial gains available to prospect employees in Canada, there must be a greater push for marketing the non-monetary incentives of taking up opportunities in Canadian cities. The availability of opportunity must be paired with marketing the quality of life in Canada’s growing technology hubs so that it becomes common knowledge.

Canada’s Global Skills Strategy is a step in the right direct, but it does little to address the inherent challenge at hand. There exists work needed to be accomplished in order to incentivize available opportunities and the non-monetary incentives for skilled foreign workers, and leverage their interest and experience to develop the industry at home, and importantly the skill-set of Canadian workers and upcoming university students.

The current strategy of the government of Canada focus on expanding the industry based upon employee action, needs a more holistic approach. By addressing the structural challenges and promoting the incentives of working in the country, it together will help develop a vibrant and industrial technological sector within Canada.