When U.S. President Donald Trump last month made a surprise announcement of a $100,000 admission fee for highly skilled foreign workers, it was widely hailed as great news for Canada.
Even Prime Minister Mark Carney thought so, believing that this would be a perfect opportunity for the country to scoop up some of the talent who would have gone to the U.S. from around the globe.
“Not as many of those people are going to get the visas to the United States,” Carney told reporters recently. “These people have a lot of skills … we are going to have a clear offering on that.”
But few realized that this could easily go the other way: desperate American employers could take advantage of the Canada-United States-Mexico Agreement to poach the talent to their north to fill those gaps.
And before Ottawa would play offence, it may need to first think about defence, said lawyer Rick Lamanna, a partner of the law firm Fragomen (Canada), whose practice covers immigration applications via intracompany transfers, the USMCA/CUSMA and other free-trade agreements.
“It’s much easier to hire these folks from Canada,” he said. “And you skirt the $100,000 fee.”
Why Canadian workers could get poached
The trade deal allows the flow of eligible skilled workers among the three countries; the uncapped U.S. TN visas, with a maximum three-year validity, allow Canadian or Mexican citizens to work in the U.S. In the 2024 fiscal year, a total of 27,871 new TN visas were issued, according to the U.S. Department of State.
While there has always been a brain drain from Canada to the U.S. given the enormous American economy and job market, Lamanna said American companies will certainly look harder to the Canadian talent pool now.
There’s only so much Ottawa can do to protect skilled Canadian workers from being poached, but immigration policies will play a key role in replenishing the lost talent, said Lamanna.
“If we’re going to lose these people, we’re going to create a pathway for others,” he said. “You replace them with equally skilled people coming in and creating a pathway to permanent residence for those, with the idea that you can retain a number of them.”
How changes to the U.S. H-1B visa could affect Canada
Matt Downer, a partner with EY Law LLP in Toronto, has received a flurry of inquiries since Trump first made the proclamation last month to require the $100,000 fee for each new petition filed by employers on and after Sept. 21 to bring in skilled foreign workers under what’s known as an H-1B visa.
He said corporate America is “nervous” about the cost and the uncertainty surrounding the yet-to-be-announced details. Although the fee doesn’t apply to current H-1B visa holders, many employers will start making job offers and must decide in the next two months whether to put candidates in the H-1B lottery with the new price tag.
About 85,000 H-1B visas are issued each year, including 65,000 for bachelor’s degree holders and 20,000 for those with postgraduate education. Last year, there were 480,000 people in the pool. With a weighted system expected to be put in place as part of the lottery process next year, Downer said those who are more experienced and making higher wages would be favoured.
“What that means is there’s going to be a lot of newer, highly skilled talent that probably won’t be selected in the H-1B lottery,” said Downer, who specializes exclusively in U.S. immigration law.
“It really is affecting these companies with their talent pool and their future talent plans because this new lottery will probably only focus on and prefer much more experienced talent. They’re all highly skilled, but the newer talent wouldn’t have as good of a shot in the lottery.”
This cohort of younger skilled workers shut out of the U.S. could be in direct competition with graduates in Canada, as the country’s youth unemployment rate hit 14.5 per cent.
The idea will not sit well with most Canadians, especially when Ottawa has significantly reduced permanent and temporary resident intakes until 2027 to contain population growth, said Toronto corporate immigration lawyer Barbara Jo Caruso.
“If we cherry-picked foreign workers that were being squeezed out by the U.S. and we overlooked those foreign workers that are in Canada that came and paid a substantial amount of money to go to school here, what message does that send the world?” she asked. “That’s going to leave a really bad impression.”
Caruso was referring to the significant number of international students and foreign workers who are struggling to obtain permanent residence in Canada — and at the centre of the public backlash against immigration for the country’s affordability crisis, blamed by some for taking away Canadian jobs.
How to keep talented workers in Canada
For a long time, Canada has allowed American employers to house some of their skilled foreign workers who are out of luck in the annual U.S. H-1B visa lottery by offering them Canadian work permits.
“It’s not meaningful to Canada if these people (working for U.S. companies) are just sitting here in Canada paying taxes,” she said. “When they’re just parked here, yes, they pay taxes, but they also get health care, their children go to school and their spouses get open work permits.”
In 2023, Ottawa offered a special program to issue a three-year work permit to U.S.-based H-1B visa holders, who faced layoffs south of the border then. The cap of 10,000 applications was filled in two days.
Gabriela Ramo, a partner in business immigration at EY Law LLP, said that program was flawed because applicants did not need job offers in Canada and those who got the work permits were not required to work for a Canadian employer.
So it turned out to be an insurance policy for American firms and laid-off H-1B holders, she said.
Ramo believes, though, that Canada can take advantage of this new opportunity to attract diverse talent as U.S. H-1B covers a range of specialty occupations from biotechnology, chemistry, computing, engineering, tech, physical sciences and health care.
But this would require a concerted government effort to come up with an innovation strategy, identify skills gaps and tailor an immigration program that ties applicants with jobs.
“If you’re going to fully access this talent, you’re going to have to prioritize it over some of the other permits that you’re bringing in,” said Ramo. “You need to tie the bringing in of the people to how employers are going to use that talent, to create local jobs and to train Canadians.”
Lamanna said offering a pathway to permanent residence would be crucial to keeping the talent in Canada or these people would likely head to the U.S. after a few years when they qualified for what’s known as L-1 visas, as intracompany transferees, after working overseas for an American company, to bypass the H-1B process.
“The tax rates are better in the U.S., as we know, and they pay more in the U.S.,” he said. “What can Canada provide? Well, there’s quality of life. There’s health care. But from an immigration standpoint, what we can do is we can have a very robust permanent residence pathway for these people.”
