Is Canada’s immigration policy a band-aid to US H-1B visa restrictions? – The Times of India

In response to recent significant changes in the US H-1B visa program, Canadian Prime Minister Mark Carney has identified a crucial opportunity for Canada to attract highly skilled workers from the technology sector who previously sought employment in the United States. This shift in immigration policy by the US government, notably the imposition of a $100,000 fee on new H-1B visas by President Donald Trump, has created uncertainty and frustration among both employers and skilled foreign professionals, especially those in tech fields. Canada, along with other countries such as Germany and the UK, is positioning itself as an attractive alternative destination for this talent pool.Research suggests that “the hardest hit will be recent international graduates of US universities who had hoped to stay and work long term,” according to immigration policy experts. More significantly, the policy affects hundreds of thousands of workers from countries like India and China, creating what Build Canada, a productivity-focused non-profit, describes as a situation where “hundreds of thousands of highly skilled and highly paid H-1B professionals are now seeking a new home.“

The recent US policy moves that sharply raise the cost and uncertainty of H-1B work visas have refocused global attention on alternative career paths, especially in Canada, the UK and Germany. For students and early-career tech workers, the change is not just geopolitical theatre as it reshapes where companies hire, where start-ups form and which countries look like the best springboards for technology careers.

The basic dynamic: Restrict visas and firms look elsewhere

The current situation parallels a previous policy shift that researchers have extensively studied. When H-1B visa caps were dramatically reduced in 2004 from 195,000 to 65,000, economists documented how multinational companies responded. Economists studying past visa shocks find that when the US makes it harder to hire high-skilled foreigners, firms do not simply stop hiring those skills instead, they relocate roles, expand foreign affiliates or recruit talent to other countries. One digest of National Bureau of Economic Research (NBER) work summarised the mechanism succinctly and claimed that after policy shocks that reduced H-1B supply, “firms with greater visa shortfalls were more likely to open foreign affiliates and to increase employment at existing foreign affiliates.” The NBER research specifically examined “the 2004 H-1B restrictions that cut the visa cap by 70%” and found compelling evidence about where affected workers ended up.According to the study, when faced with H-1B restrictions, “firms hired the same skilled immigrants they had originally wanted in the US but in Canada instead.” The research revealed that “at the time, Canada’s more open immigration policies made it easy to move workers there,” demonstrating that visa restrictions don’t eliminate demand for skilled workers, they simply relocate that demand to more welcoming jurisdictions. This finding has profound implications for technology professionals planning their careers. When restrictive visa policies are implemented, highly skilled workers don’t simply disappear from the global talent pool; instead, they redirect their careers to nations with more favourable immigration frameworks.A careful firm-level 2020 study made the same point with hard data and shared that following the big 2004 cut in the H-1B cap, affected multinational firms expanded employment at foreign affiliates — a measurable channel by which skilled jobs and projects flowed outside the US rather than being filled domestically. For students, the takeaway is immediate. Visa policy in one country changes where the best jobs and internships appear.

High-skilled immigration matters for innovation and firm outcomes

If visa shocks can shift where jobs are located, do they also affect innovation? Multiple high-quality studies say yes. According to a 2010 influential analysis of H-1B reforms in the Journal of Labor Economics, higher H-1B admissions were associated with increased innovation and patenting activity in the United States. In other words, higher H-1B admissions increased immigrant employment in science and engineering and raised patenting by inventors with Indian and Chinese names in affected cities and firms, while having limited displacement effects on native inventors. Skilled immigrant inflows supported tech creation where they were able to work.However, the more recent NBER research complicates this narrative. While the study found that H-1B workers themselves may not dramatically increase firm-level innovation, it noted that “firms that hire H-1Bs grow faster and innovate more because they are different in other ways from firms that do not.” This suggests that visa policies affect which types of firms can access talent pools and grow, rather than simply determining absolute innovation levels.For technology professionals planning their careers, this research indicates that the firms most affected by visa restrictions — typically smaller, high-growth technology companies — are precisely those that offer the most dynamic career opportunities and potential for equity compensation. When visa policies push these firms and their workers to other jurisdictions, career advancement opportunities shift accordingly.Another line of work, focused on firm behaviour, shows firms reliant on H-1B hires cut back on R&D or shifted investment patterns when access to talent tightened. These studies suggest that restrictions do more than shuffle people, they influence innovation activity and firm strategy, which in turn affects the kinds of career opportunities available to students in different countries.

Canada as a feasible alternative

Canada has actively sought to capture talent displaced by US restrictions. Recent empirical work shows policy levers can move people: a 2023 NBER working paper on Canada’s Start-up Visa Program found the policy increased the likelihood that US-based immigrants would start businesses in Canada. This is evidence that reasonably designed entry routes can entice entrepreneurial talent. For students eyeing post-grad options, Canada’s proximity, research centres and specialised immigration streams make it an obvious contender.That said, observational evidence and expert commentary caution against naïveté. Canada’s temporary programmes (e.g., short-term work permits) have at times filled rapidly (10,000 applicants in a day for one 2023 initiative) but longer-term settlement and access to permanent residency remain bottlenecks for many. Economists note that while there is clear potential for Canada to attract skilled workers, Canada’s own policy predictability, wage structure and political debates over temporary worker schemes matter for how many migrants ultimately relocate and stay.

International competition: Germany and the UK join the talent war

Mark Carney emphasized in public statements that Canada is reviewing its immigration policies to craft a “clear offering” for tech professionals who would otherwise qualify for H-1B visas. This involves creating pathways that make it easier for skilled foreign workers to relocate to Canada, highlighting the country’s robust research institutions, advanced artificial intelligence capabilities, and high quality of life. Carney noted that many Canadian-born talents move to the US for work but changes in visa policies might encourage keeping some of these skills within Canada.The Canadian government’s proactive stance is supported by immigration lawyers and business leaders who view the US visa hike as “a wonderful opportunity” to capitalise on the shifting landscape. Programs such as Canada’s Express Entry and Global Skills Strategy provide expedited work permits and permanent residency options for highly skilled workers, although challenges remain in processing backlogs and integrating newcomers effectively.Research published in ScienceDirect in December 2022 synthesized prior research on skilled migration, brain gain and brain drain, occurring because of the cross-border migration of skilled professionals and found that “the foundation of organisations and knowledge-based economies is widely considered to be human capital and knowledge workers.” This research framework helps explain why Prime Minister Carney emphasized Canada’s “homegrown research and AI talent” while noting that “unfortunately, most of them go the US” before adding, regarding Trump’s visa changes, “Maybe we can hang on to one or two of them.” The comment reflects awareness that talent retention and attraction directly determine which nations lead in crucial technology sectors like artificial intelligence.However, Canada is not alone in recognising the opportunity created by the US visa restrictions. According to reports, Germany and the UK are also touting themselves as an alternative destination for skilled workers who are now facing extra hurdles to reach the US. This international competition for technology talent represents a fundamental shift in how nations conceptualise immigration policy, not merely as border control but as economic development strategy.

What this means for students and early-career tech workers

Takeaway on policy and unpredictability

Visa policy is volatile as sudden changes create both opportunity and friction. The academic record is clear: restricting access to skilled immigrants reshuffles where work gets done and can dampen domestic innovation. For students, that means opportunity — if you prepare — but also the need for realism about the limits and frictions of migration. Countries that act quickly with clear, reliable immigration offers backed by research-grade pathways (startup visas, fast tracks for graduates and employer-led programs) are the likeliest winners in the short run.