Canada: The "Trump Effect" On Corporate Immigration: Challenges And Opportunities For Canadian Businesses

Last Updated: April 20 2017
Article by William R. MacGregor

Most Read Contributor in Canada, October 2018

Given the importance of the U.S. market, Canadian businesses need to be able to send key personnel to the United States to support business activities. As well, Canadian businesses need to be able access high-skilled foreign workers in sectors where there are labour shortages in Canada.

This article focuses on corporate immigration challenges and opportunities that Canadian businesses may face due to potential developments in the U.S., such as increased restrictions on entry or on work visa options. 

This article will not deal with the January and March 2017 Executive Orders regarding the attempt to put a temporary ban on the entry to the United States of citizens of several countries. That topic was covered in an earlier article at this link.

Challenges for Canadian-Based Companies

Given the importance of the U.S. market to Canadian businesses, smooth and efficient entry into the United States is imperative, as is access to predictable, transparent work permit options where Canadians or Canadian-based workers may require a U.S. work permit to undertake business activities in the United States.

Canadian citizens are often able to gain entry under NAFTA. NAFTA contains a number of mobility provisions for Canadian citizens under the Business Visitor (B-1) category (when a work permit is not required) and under the NAFTA Professional (TN) and Intra-Company Transferee (L-1) work permit categories.

The Trump Administration has said that it wants to renegotiate NAFTA. While the focus will be on trade and commercial matters, if NAFTA's mobility provisions are narrowed, this will be detrimental to Canadian citizens needing U.S. work permits. Canadian companies will want to monitor any developments regarding NAFTA's mobility provisions. While we do not expect the work permit or business visitor categories to be narrowed if NAFTA is renegotiated, the end result cannot be predicted.

Anecdotally, there is a concern that NAFTA work permit adjudications of Canadians at some U.S. ports of entry may be becoming more difficult, even if the NAFTA provisions have not changed. Could some of the rhetoric regarding more restrictive entry, job protection and unfair trading practices spill over into work permit adjudications? Might this lead to narrower or less facilitative interpretations of the current provisions? Canadians seeking a U.S. work permit must make sure they present a strong and complete application to maximize the likelihood of success.

Another potential change to monitor will be whether the U.S. narrows or modifies the L-1B work visa (specialized knowledge intra-company transferees) or the H-1B work visa (specialty occupations) category. While Canadians usually apply for U.S. work visas under NAFTA, the H-1B category is a category that those with other citizenships (such as permanent residents or foreign workers based in Canada) may need to try to utilize if a work visa is needed. There are a limited number of H-1B work visas each year, and a lottery system is used to allot the quota as demand far exceeds the quota available.

Given some of the rhetoric emanating from the United States, will new restrictions be placed on the H-1B or L-1B categories in an effort to provide more protection to the U.S. domestic labour market? This would make it more difficult for U.S.-based businesses to access key talent in areas where there may be skills shortages, such as in high tech. U.S. businesses already face barriers accessing this talent due to the H-1B quota and a work visa system that can make it difficult to smoothly transition foreign graduates of U.S. universities into longer term work visa holders or permanent residents.

A recently announced change to the H-1B program (announced March 31, 2017) may be an indication of a trend to narrow this category. As set out in this New York Times Article "Changes to the H-1B Visa Program Begin", the U.S. has taken steps to clarify that entry level computer programming jobs will not necessarily be considered a "specialty occupation" eligible for an H-1B.

Such changes have a negative impact on the high tech sector in the U.S., as that sector relies heavily on the H-1B program to address skills shortages.

This feeds into another broad point. Given the current "tone" from some U.S. quarters regarding increased protectionism and restrictions on entry to the US, and the uncertainty that this creates both for business and for foreign national workers, it will be interesting to see whether this has a negative effect on corporate decisions to build up facilities in the United States or on the personal decisions of foreign students or foreign skilled workers to study or work in United States. Other countries such as Canada that have more predictable and accessible work permit and permanent resident programs may be well positioned as an alternative destination.

Opportunities for Canadian Businesses to Attract Talent

Some of the trends in the U.S. may provide a number of opportunities for Canadian-based businesses, or international businesses seeking to expand their North American presence via locations in Canada.

For Canadian-based businesses seeking to hire highly skilled global talent to meet shortages in Canada, the combination on the U.S. side of greater protectionism, fewer work visa options, and a more difficult transition to permanent status provides some competitive advantages in trying to attract foreign talent. In particular:

  • There is no temporary worker quota or H-1B work visa lottery concern in Canada, which makes things more predictable in terms of sourcing and growing a high skilled workforce;
  • There are more work permit options and categories in Canada;
  • Foreign national spouses of foreign workers in Canada can obtain a work permit whereas not all accompanying spouses in the U.S. can work;
  • Canada's Permanent Resident system is very transparent and relatively fast and predictable. It is based on a points system, so a candidate's eligibility can be assessed. Most temporary workers can transition to permanent status and eventually Canadian citizenship, so longer term business and human resources growth plans can be implemented;
  • Foreign students graduating from Canadian post-secondary schools can obtain longer term post-graduate work permits (up to three years in duration). This provides enough time to transition to permanent resident status.

Future changes to Canada's work permit program will also enhance opportunities for Canadian businesses. In November 2016 the Canadian government announced that it would be introducing a new Global Skills Strategy program in June 2017. There will be a number of facets to this program. The details have not yet been announced. But the goal is to shorten processing times for some categories of high skilled work permit applicants.

Per the announcement at http://www.budget.gc.ca/fes-eea/2016/docs/themes/skills-competences-en.html:

Canada's Global Skills Strategy will make it easier for Canadian businesses to attract the talent they need to succeed. Whether they need to bring in professionals to train Canadian workers, or to hire global talent with highly specialized, in-demand skills, the proposed new Global Skills Strategy will set an ambitious two-week standard for processing visas and work permits for low-risk, high-skill talent for companies doing business in Canada.

We will provide further details when they are announced. It is clear that the Global Skills Strategy will enhance the ability of Canadian businesses to compete for scarce talent. It should lower processing times which will create more predictability for companies seeking to build out operations in Canada.

Conclusion

Developments or potential changes in the United States always affect Canadian businesses. This is also the case in the corporate immigration area. Despite these potential changes Canadian citizens and businesses should continue to have good access to the U.S., even if NAFTA is re-opened and modified.

Depending on developments, there also may be more opportunities for Canadian companies to compete for global talent in areas where there are human capital or skills shortages. Having a relatively predictable, transparent and efficient work permit and immigration system should help Canadian companies (or international companies building up facilities in Canada) compete for global talent. Canada's new Global Skills Strategy, slated for June 2017, should contribute to making work permit processes and timelines more predictable.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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