Bloomberg News

Canada Tells Geeks to Flee Silicon Valley, Head North

July 10, 2013

Canada Wants Tech Immigrants

Minister Kenney of Citizenship and Immigration Canada in front of a billboard encouraging tech workers to move to Canada, taken on May 17, 2013 in Silicon Valley. Photographer: Citizenship and Immigration Canada via Bloomberg

A billboard emblazoned with a giant red maple leaf looms over a stretch of Highway 101 linking San Francisco with Silicon Valley. The pitch: "H-1B Problems? Pivot to Canada."

The U.S. H-1B visa program, aimed at giving temporary residence to high-skill workers, is broken, according to tech companies that depend on it for recruiting overseas talent. The program is heavily oversubscribed, thanks in part to outsourcing companies and supermodels.

The Canadian government aims to capitalize on the frustrations of techies who are waiting on U.S. immigration paperwork. Officials have been making appearances in Silicon Valley to deliver their pitch in person: Canada will give permanent residence to entrepreneurs who speak either French or English, have completed at least one year of college, and are able to secure financing in Canada totaling at least C$200,000 ($189,000) from a venture-capital fund or C$75,000 from an angel investor.

The Startup Visa Canada program and the billboard have generated "huge buzz," says Jason Kenney, Canada's citizenship and immigration minister. On a trip to California earlier this year to promote the initiative, Kenney met with young entrepreneurs, many of them from India, who say they're interested in participating in the program.

Canada is desperately looking to revive its technology prowess. It was the birthplace of Nortel Networks, once North America’s largest telephone-equipment maker, and BlackBerry, the smartphone pioneer. But Nortel went bankrupt four years ago and has since been sold off in pieces, while BlackBerry's share of the market it helped invent has slipped to less than 3 percent.

The billboard and Kenney's friendly Silicon Valley tour represent "creative guerrilla marketing," says Kevin Talbot, a Canadian who co-founded venture-capital firm Relay Ventures in Menlo Park, California. "It's a creative way to capitalize on a talent pool already in North America, that can’t stay in the U.S., that might not have thought of Canada."

Canada may be running out of time to capitalize on the U.S.'s skilled-visa problem. After a significant lobbying effort by tech elite including Facebook CEO Mark Zuckerberg, the U.S. Senate is proposing a new immigration bill that would double the cost of H-1B visas to $4,825 while also lifting the number of permits to as many as 180,000 from the current cap of 85,000 per year.

Kenney is pragmatic about the likely scale of Canada's startup-immigration initiative, which kicked off in April.

"I'm realistic Canada is not going to create Silicon Valley, but we're creating a viable alternative," Kenney says. "We're priming the pump."

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