Canada – the new ‘Land of Liberty’?

• Stung by the rising complexities and uncertainty of H-1B visa rules in the US, Indian technology professionals are increasingly opting for Canadian citizenship.
• Canada has liberalized its immigration norms to attract top global talent in the STEM segment with its Global Talent Stream (GTS) Programme.
• Employment under GTS puts candidates at an advantage when they subsequently apply for permanent citizenship in Canada, which is far simpler than getting a US green card.
• Even companies are increasing their presence in Canada, due to increasing regulatory requirements in US affecting their ability to hire top global talent.

With the US on an increasingly protectionist drive, H-1B visa processes are getting increasingly more complicated. Consequently, Indian IT professionals are now exploring a new destination – Canada – which is far more eager to accept them. In 2017, the Canadian government announced a programme called the Global Skills Strategy, with a target of 310,000 new permanent residents in 2018 and 330,000 new residents in 2019. By November 2018, the Canadian government had approved 40,833 jobs and 3,625 applications for high-skilled immigrants.

 The Global Talent Stream (GTS) opportunity offered by Canada is particularly lucrative for professionals with a background in STEM. Talent firm StackRaft affirms that a number of Indian professionals are now actively exploring Canada for immigration, particularly in financial services, artificial intelligence, healthcare and clean technology. Indians are already benefitting from the programme with 36,310 invites out of a total of 86,022 in 2017, which increased by 13% to 41,000 invites in 2018. Currently, the maximum permissible duration for workers under GTS in Canada is 2 years. In Canada, sponsoring employers can get GTS applications processed in a span of 2 weeks.       

H-1B visas are normally extended for three years after expiry in the US, but the surveillance on these applications is now much stricter. The approach is more towards ‘Hire American’ with high thresholds for selection. The US had mandated an H-1B visa cap of 65,000 for FY 2020, which begins on October 1, 2019. According to the US Citizenship & Immigration Services (USCIS), sufficient petitions to reach the cap were received within just five days after they started receiving applications on April 1.

A daunting trade barrier

This is the first year for H-1B visa applications after the USCIS announced new rules for H-1B, which give priority to professionals who have completed their post-graduate degree from an educational institution in the US. This is expected to increase the number of selected applications in this category by around 16% OR 5,340 workers. There is a cap of 20,000 for selecting applications for US advanced degree exemption. Nasscom has cautioned that this may impact the ability of Indian companies to hire domain experts in areas like Data Sciences, Blockchain, IoT, AI, machine learning, etc.

As per revisions made last year, the employer will have to now prove that the concerned employee is indeed required, has the requisite specialisation and will work on the same specialisation for the duration of the visa. Successive orders have only added to the complexity and paperwork.

Employers have also been asked to furnish details on their current strength of H-1B visa workers. The Labour application will seek information on the number of H1-B visa holders at every location, and where the new workers will be deployed. The Labour Department will also ascertain whether US citizens can take up the position.
Furthermore, US citizens can file cases for discrimination on employment with the Department of Justice. Indian IT companies have already faced lawsuits in the US against their alleged bias in favour of Indians when it comes to hiring. TCS won a lawsuit last year, and a similar case was filed recently against HCL Technologies.

CARE Ratings estimated that the number of visas approved for the top five Indian IT companies came down by 49% YoY in 2018 to reach 22,429. The denials were highest for Infosys, followed by HCL America, TCS, Tech Mahindra Americas and Wipro during October 2017 to September 2018. Six top Indian IT firms saw rejection of 8,742 visa extension requests during the year. Significantly, around 73.9% of the 419,637 H-1B applications were from Indians in FY 2018.

Increasing local hiring has obvious limitations as it significantly raises their costs of operations. Therefore, even companies with offices in US are expanding to Canada. Around 63% of US companies are ramping up their presence in Canada, with 21% already having a branch, according to a survey.

Indians have to wait for 10 years to get a green card in the US. On the other hand, Canada is offering a fast track to citizenship in three years. There was a 50% rise in Canadian citizenship provided to Indians during January-October, 2018. Although the entry barriers are high and salaries are relatively lower in Canada, the subsequent process is relatively more predictable. Applicants hired via GTS get work experience in Canada, which puts them at an advantage for permanent residency under the Express Entry Route.

For these reasons, US loss could now become Canada’s gain. Meanwhile, amidst continued allegations of high import tariffs from US, it is necessary for India to take a strong stand on toughening H-1B visa processes as a significant trade bottleneck.