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For one University of Waterloo software engineering student who is set to graduate this April, job offers from both Canadian and United States tech firms have been flooding in all year.

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But his decision, in the end, was a no-brainer: He accepted an offer to work as a software engineer for one of the best-known companies in Silicon Valley after interning at social media platform X.

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“A lot of the U.S. versus Canada stuff seems obvious,” he said, asking not to be named due to concerns it could adversely affect his career. “American salaries are easily double or triple Canadian salaries right after graduation, and the gap only gets bigger with seniority.”

In many ways, his story is nothing new.

The U.S. has long been a preferred destination for Canadian tech talent. One study by Charles Plant a consultant who researches startups in Canada, found that 10 per cent of all STEM grads in Canada end up working in the United States, with those from McGill University, Waterloo and the University of British Columbia most likely to head south. Among software engineering graduates, the numbers are even higher — an unofficial count of UWaterloo’s 2022 software engineering class of 2022 showed that 71 per cent accepted job offers in the U.S.

Canada’s tech industry got a boost during U.S. President Donald’s Trump first term, when anti-immigration sentiment and a visa crackdown in the U.S. brought a sizable migration of foreign talent to Canada. But this time, the forces appear to be reversing: Trump’s alignment with Silicon Valley just as Canada is toughening its immigration rules, and that has some fearful that a fresh tech-worker exodus from Canada is imminent.

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“There is tremendous potential for the movement of Canadians, permanent residents and foreign nationals” to the U.S., according to Annie Beaudoin, a Canada-U.S. immigration consultant and law professor at Queen’s University and the University of Montreal.

James Hinton, a senior fellow at the Centre for International Governance Innovation (CIGI), said the tide is already starting to shift when it comes to the global talent pool.

“A lot of the good talent that Canadian firms have been able to recruit in the last (few) years have now been moving directly to the U.S. or working for U.S. firms in Canada,” he said. “It’s … a hollowing out of tech talent within the country, when we need to be hunkering down and improving our economic position.”

Trump has not yet indicated if changes are coming the U.S.’s H-1B visa program, but Elon Musk, the entrepreneur who heavily backed Trump’s bid for the White House, made headlines in December when he declared he was ready to go “to war” with the president’s anti-immigration base to defend the program, which allows U.S. companies to hire highly skilled foreign workers in specialty jobs such as engineers, computer scientists and systems analysts.

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The U.S. issues 85,000 H-1Bs every year — with 20,000 reserved for non-U.S. students with a master’s degree or higher from American universities — via a lottery system. U.S. tech giants are among the program’s biggest beneficiaries. Musk’s electric car company Tesla Inc., for example, received 1,787 H-1B approvals last year.

Trump has promised to bring manufacturing back to the U.S., which he acknowledged would require more foreign workers via “legal immigration.”

“We need people, and I’m absolutely fine with it. We want to have it,” he said on Monday during his first news conference after taking office.

Any H-1B reform would be “highly likely” to attract foreign tech talent working in Canada to give the U.S. a shot, said Beaudoin.

Canadian citizens would be less affected by changes to the H-1B visa program, given that only one per cent of them are issued to Canadians. But Canadians are eligible to work in the U.S. under the TN visa provided under the U.S.-Mexico-Canada Agreement (USMCA) free-trade deal.

And Canadians are easy targets for U.S. firms for another reason, according to Jonathan Grode, U.S. practice director and managing partner at immigration law firm Green and Spiegel, which is headquartered in Toronto with offices in the U.S. and EU.

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“Once they secure (a visa), they can enter the U.S. without having to go through extreme vetting,” Grode said. “It puts Canadians at an advantage over the rest of the world.”

Bilal Akhtar, a Canadian software engineer for A.I.-powered data platform DataBricks who graduated from UWaterloo’s software engineering program in 2019, said that most of his peers already landed in the U.S. post-graduation, but that he could the floodgates opening further if immigration rules are relaxed.

“I can definitely see more folks going (to the U.S.) if Trump makes it easier for skilled workers to work there,” he said.

Some tech workers in Canada are already eyeing a move, including foreign workers who came to the country under Ottawa’s 2023 program for H-1B holders — which exceeded the maximum quota of 10,000 applications in one day.

One Vancouver-based Alphabet Inc. employee who asked not to be named out of fear it could hurt her career, spent half a decade in the U.S. working in key roles for Big Tech. She obtained an H-1B but saw a near-impossible path to a U.S. green card, which would have allowed her to live and work in the country indefinitely. The U.S. has a seven per cent country cap on green cards for foreign workers, meaning decades-long wait times for heavily populated countries like India, where she hails from. She moved to Canada under Ottawa’s H-1B scheme instead, keeping her job but taking a 40 per cent pay cut.

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“I’m building a life in Canada, but the networks and opportunities are bigger and better in the U.S. I may try again for the U.S. down the road,” especially if any major immigration reform is made, she said, adding that some of her peers who came to Canada via the same route have already left the country due to cost of living and job search challenges here.

U.S immigration policy isn’t the only factor that could work against Canada. Changes such as Ottawa’s proposed capital gains tax hike, which is now in limbo with parliament suspended, have already scared away some entrepreneurial talent.

“If I’m a software engineer or someone working in tech, this all leads me to think (Canada) sounds like a declining market,” said Rob Darling, founder of Kitchener-based runQL, a query platform startup.

Grode, the immigration lawyer, said that over the last year, he has experienced an unprecedented uptick in Canadian business owners wanting to relocate to the U.S. “It went from one to two (inquiries) a month to literally daily,” he said.

Despite the concerns, there is still a great deal of uncertainty about which way the U.S. will go on immigration.

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According to the Wall Street Journal, Trump may push to accelerate the renegotiation of USMCA, but it is unclear whether the TN visa rules will change as a result.

CIGI’s Hinton expects that the U.S. will try to “extract as much value as they can from Canada … including top talent, whether that’s getting them to work in the U.S., (or driving) companies to move to the U.S. and to be acquired in the U.S., strengthening their economic position.”

The fears come amid some positive signs for Canada’s tech sector. Around 300,000 tech jobs have been created in Canada over the past six years, according to a 2023 report by the Computing Technology Industry Association (CompTIA), an information technology (IT) industry body, while Ottawa has launched and funded strategies in recent years to attract and retain tech talent in the country.

Akhtar, the software engineer, says that he’s seen some peers opt for Canada because of a more predictable immigration system: “Once you qualify, you just get (your permit),” he said. “There’s no lottery and no randomness in the system.”

Canadian firms also generally have policies preferable to U.S. ones when it comes to vacation days and parental leave. Akhtar plans to return to Canada in the future to be closer to family and because he appreciates Canadian culture.

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“We have a lot of good ingredients here. We just need to use them well,” he said.

But the U.S.’s higher salaries, coupled with access to networks, capital and cutting-edge projects, remain an attraction.

Overall, tech workers’ salaries in the U.S. are 46 per cent higher than in Canada after adjusting for the exchange rate and cost of living, according to a 2023 report from Toronto Metropolitan University.

Working for a U.S. firm “might mean longer hours or being farther from family, but the opportunity to work on frontier projects, and get (well compensated for it), more than makes up for it,” said the UWaterloo student interning at X.

The question for Canadian policymakers will be what to do about it.

“Canada’s ability to compete is at the heart of the brain drain issue,” Plant, the consultant who researches startups in Canada, wrote in a 2021 research paper. He argued that to compete on hiring, Canadian firms would need to attract larger venture capital rounds so they have the firepower to be aggressive on talent.

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In Hinton’s view, rolling back the capital gains tax hike isn’t anywhere near sufficient to reel in tech talent and companies.

“We have to be more attractive (than) what the U.S. is offering and accelerate the opportunity for firms to come here,” he said. “In the digital economy, even if you get 90 per cent right and 10 per cent wrong, you lose. One gap in an innovation policy … can lead to all the value draining out.”

• Email: ylau@postmedia.com

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