In July 2023, Canada introduced a new visa program aimed at recruiting skilled professionals currently working in the U.S. under H-1B visas. The initiative allowed Canada to leverage the international appeal of the U.S. while offering a more stable immigration pathway for high-skilled workers frustrated by the instability of the American system. Unlike the U.S., Canada’s program does not require employer ties or impose country-specific quotas, which often complicate long-term employment in the U.S. As a result, Canada’s program received 10,000 applications within 48 hours of its launch.
The departure of 10,000 high-skilled workers from the U.S. labor market had the potential to disrupt critical industries and affect business continuity. However, new data from Immigration, Refugees, and Citizenship Canada (IRCC), obtained by the Niskanen Center, indicates that this concern has not become a reality. Despite the initial wave of interest, only 1,205 H-1B workers arrived in Canada in the first year of the program’s existence, representing just 12 percent of the original applicant pool.
The visa criteria were simple: applicants needed to hold a valid H-1B visa and live in the U.S. at the time of application. The online application system required applicants to upload documentation verifying conditions, so most probably applicants met these basic eligibility requirements. Therefore, denials are not likely to be responsible for the relatively lackluster year one arrival rate.
Administrative delays also seem like an unlikely cause for the program’s slow uptake. Although specific processing times for this visa are not available, the estimated processing time for work permit applications processed from the U.S. is approximately 15 weeks, or 3.5 months. Given that all applications were submitted between July 16th and 17th, 2023 and that about half of the active participants arrived within the same calendar year, it seems improbable that processing delays have prevented the arrival of over 8,000 applicants.
On the contrary, the data suggests that many applicants viewed the program as a backup option. This concern was raised by some stakeholders when the program launched, noting that while unsuccessful H-1B lottery registrants have long considered Canada a second-choice destination, this program does not benefit them. Only those fortunate enough to have secured an H-1B visa and already begun work in the United States are eligible. Despite offering comparable —and in some ways superior— visa terms, such as an open work permit not tied to a specific employer and the ability to self-sponsor for permanent residence after just one year, many still seem to prefer the immediate benefits of working and living in the U.S. The near-term advantages of remaining in the U.S. likely outweigh the long-term stability Canada offers for many of the program’s targeted workers.
Despite the program’s long-term benefits, eligible applicants may still have incentives to stay in the U.S., at least for the meantime. Canada’s open work permit offers greater flexibility than the H-1B, as it is not tied to a specific employer. However, Canada’s unemployment rate compared to the U.S. could make finding a job more challenging. Since the program does not require workers to have a job offer before arriving, participants would have to leave their jobs in the U.S. to search for employment in Canada, potentially exchanging short-term instability for long-term stability.
As the data below indicates, the age distribution of participants who have relocated to Canada is similar to that of H-1B holders in the U.S., although it skews slightly younger. More notably, participants in Canada are much less likely to have dependents with them. This may seem surprising, given that Canada’s program allows all adult dependents to obtain work authorization, whereas in the U.S., spousal work authorization is more restricted. However, younger, single individuals may be more willing to accept short-term instability, while those with spouses and children more deeply rooted in the U.S. may be less inclined to relocate.
Overall, it seems that the U.S. has not yet been significantly impacted by the launch and implementation of the Canadian visa. However, the program may reopen to more applicants in the future. If the U.S. does not take stronger steps to retain its most sought-after immigrants, competitors like Canada will continue to offer more appealing pathways, potentially drawing away the talent that fuels the U.S. economy and drives American innovation.
