Canada must reorient its immigration system for the 21st-century economy

Posted on December 26, 2020 in Policy Context

Source: — Authors: – Business/Commentary
December 25, 2020.   Neil Desai and Chris Albinson

A mass exodus has commenced in Silicon Valley. Last month alone, Oracle Corporation, Tesla Inc., Charles Schwab Corporation, SpaceX and Hewlett-Packard Company announced relocation plans. Amid the pandemic, companies and their employees realized that remote work offered an opportunity to improve their competitiveness and quality of life elsewhere. But they are not coming to Canada. Instead, they are moving to jurisdictions that actively recruited their entrepreneurs and employees.

Attracting top talent is already posing a challenge for Canada’s most innovative companies. Canada produces high-quality graduates and attracts highly skilled immigrants. But the tech sector continues to have key positions go unfilled due to labour shortages in strategic roles. At present, there are more than 54,000 tech-sector job openings.

This, in part, has been a result of multinational tech companies having set up engineering outposts here over the past generation to take full advantage of our relatively low-cost talent. The pressure on Canada will continue to grow as foreign companies look for top-tier talent. The International Monetary Fund reports there will be a shortage of 85 million tech workers by 2030.

Talented workers and the intellectual property (IP) they create and commercialize are the two most important ingredients of modern business globally. While IP permeates borders with relative ease, talent has been bound to traditional national structures.

The pandemic has begun to erode this construct, with companies looking for the best talent on the planet as the normalization of remote work continues. Under our current circumstances, Canada is more likely to be a victim than a beneficiary of this shift.

Canada’s productivity has already been lagging for a generation. Despite all the attention given to increasing investment in research and development and growing rates of entrepreneurship, our national innovation outcomes have continued to lag those of other advanced industrialized countries.

One bright spot has been Canada’s ambitious approach to economic immigration. Statistics Canada reported that six out of every 10 immigrants in 2019 were selected for their economic potential and that Canada’s immigration levels will rise to 350,000 in 2021.

However, our immigration system will be under immense pressure to deliver in a post-pandemic world. Canada’s demographic reality is almost as bleak as our innovation outputs. By 2035, another five million Canadians will retire, bringing our worker-to-retiree ratio down to 2:1. For reference, it was 7:1 in 1971.

The hope that the world’s top talent will simply come to the conclusion that they should call Canada home is wishful thinking. But hope and wishful thinking are not a viable macroeconomic strategy. If immigration is going to maintain and grow its positive impact on Canada’s economy, the government of Canada must reorient its immigration policy.

Today, Canada’s economic immigration is largely passive and convoluted. Would-be immigrants apply, and their paperwork is processed. In practice, potential employers and university admissions support quality candidates, but these are consecutive, time-consuming processes. Application processing took eight months on average in 2019.

Worse yet, the points system used to assess potential immigrants is based on dated labour market statistics with generalized job categories. Convoluting the system more, provincial governments also have the ability to prioritize certain categories of economic immigrants under the provincial nominee program.

This system has, in part, contributed to Canada’s long history of immigrant credentials not being recognized. In other instances, highly coveted professionals or students have chosen other jurisdictions before receiving approval from Canadian authorities.

If Canadian companies and postsecondary institutions are going to get the talent required to expand the Canadian economy, the government must shift to an aggressive, co-recruitment model of top talent globally. Real-time labour demand informing the recruitment of would-be immigrants is the only way to be competitive in the global innovation economy.

The government does have a role in ensuring that employers are not simply trying to conduct salary arbitrage with domestic candidates and that postsecondary institutions are not simply looking to increase revenue through higher fees for foreign students. But in an increasingly competitive world, a job offer from a credible Canadian employer or admission note from an accredited Canadian postsecondary institution should be tantamount to approval of residency in Canada unless there are grave security concerns.

This is not to say immigrants should be bound to the institution that sponsors them. Canada benefits regardless, as long as the immigrant continues to be employed or educated in Canada. The newcomer’s challenging path to setting up a new life in a new country also becomes streamlined, as finding a quality job is often one of the greatest barriers to making the immigration journey.

The government of Canada has had some experience with an employer-driven approach to highly technical talent immigration. It created the Global Skills Strategy, a program that allowed employers to fast-track work-permit processing to two weeks for skilled immigrants. Over its first two years, 40,000 immigrants have come to Canada through this program. The government has also operated the Start-up Visa Program for entrepreneurs setting up business in Canada with accredited backers.

The government has demonstrated it has the ability to shift its thinking on immigration. It now must take that experience, shed the passive approach and assert a culture of recruitment. Our immigration officials will have to be less application processors and more head-hunters for the entrepreneurs, engineers, researchers, finance professionals, marketers, salespeople and other strategic vocations required to fuel Canada’s economy and vibrant society for generations to come.

Neil Desai is an executive with Magnet Forensics, a Canadian technology company, and a senior fellow with the Munk School of Global Affairs and Public Policy at the University of Toronto and the Centre for International Governance Innovation.

Chris Albinson is the founder and managing director of BreakawayGrowth, a venture capital firm with investments in Canada and the U.S., and a co-founder of C100.

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