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MEMO to US Business: Congress isn’t going to fix the H1-B problem.

So the US Congress has once again hobbled American businesses with their ridiculously low visa quotas. The H1-B quota for the 2009 Fiscal Year (the one that started on October 1, 2008) was filled just one week after the application period started. The US Citizenship and Immigration service received 65,000 applications for the regular H1-B program, plus 20,000 applications from foreign students receiving advanced degrees in the US.  According to InfoWorld, this is the fifth consecutive year that the visa allotment has been filled before the fiscal year begins.

Here's the thing, though.  Congress isn't going to fix the H1-B problem.  Nope.  Not while Hilary Clinton and Barack Obama are strutting the countryside braying about how NAFTA is killing American jobs. 

So, if you're an American business that needs talent, I have a suggestion. Open a Canadian branch office. That's what Microsoft has done, opening a Vancouver based development lab where they're planning to employ nearly 1,000 people.  Canada is brimming with tech talent, and unlike India, we're actually in the same time zone as you are. Heck, 95% of us live within 100 miles of the US border.  We're not even that far away! Plus, it's cheaper to live and do business here, and there are generous government programs that reward companies for doing things like hiring smart new grads.  And speaking of smart new grads, did I mention that the University of Waterloo is one of the best engineering and math universities in the world?  That's why Google opened an office there, and why RIM's development work is done there too.

Why gamble the future of your business on Congress' goofy lottery?  Set up shop up north and never worry about hiring quality talent ever again. 

(Honey!!??  Did you feed the sled dogs??  They keep scratching at the igloo door like they're hungry or something.)

{ 8 comments… add one }

  • Jeanette April 8, 2008, 6:02 pm

    Hey Alec,

    Sounds good except I heard that you have really high taxes. What's the truth about property and business profit taxes?

    One more huge advantage, I understand your English.



  • Alec April 8, 2008, 6:54 pm

    Jeanette — the truth about the taxes… hmmm….

    Our personal ncome taxes are higher. Definitely.

    Property taxes? I pay the same tax here as I paid in my 2700 sq ft home on a small lot in WA. This house, though, is 6100 sq feet with a 3/4 acre lot. Housing prices are proportional to taxes. I have much more home.

    And business taxes — pretty competitive with most of the US. Plus, healthcare isn't a benefit you have to pay to your employees. It's just a payroll tax like anything else.

    The biggest hit is personal income tax. But if you're an American business, that cost won't affect you or your shareholders. It'll affect the Canadians you employ, who are already used to paying those taxes anyway.

  • Alec April 8, 2008, 6:57 pm

    Randall, I used to think that. But you know, I've watched Microsoft lobby congress over H1-B limits for years. Eventually they gave up trying and built a 1500 person facility in India, a 900 person facility in Vancouver, and so on… now they employ R&D folks all over the world.

    This from a company that has historically believed that centralizing talent in one place is the the best development philosophy.

    It's easy and popular to be protectionist.

  • Dan York April 8, 2008, 10:04 pm

    Wow! You stopped watching hockey long enough to write this entry! šŸ˜‰

  • Alec April 8, 2008, 10:18 pm

    no game on tonight Dan. Playoff’s start Thursday!

  • Randall Howard April 8, 2008, 10:40 pm

    It’s interesting you published this today. I just was in a roundtable with David Wilkins, US Ambassador to Canada who is, by the way, an articulate gentleman who discharges that role extremely well.

    Anyway, I came out of that meeting realizing that when people talk about the “thickening” of the US border, it’s not us (ie. Canadians, or more generally those outside the US) who suffer. It’s the American economy.

    That fact alone convinces me that these issues will get fixed. It may take a bit of time and getting through the election, but really, no other course of action makes long term economic sense.

  • MGU April 9, 2008, 9:50 am

    I suspect you are right, Alec. Dad.

    PS What do you think are the chances of getting your bro. and his family to come to Canada too?

  • Jim Courtney April 9, 2008, 12:13 pm

    U.S. Congress and their agency officials seem to have a knack for shooting themselves in the foot. Check out this post: Another GigaOm Post: FCC Handcuffs US Mobile, where I have mentioned the H1-B issue as just one issue hurting the U.S. economy.

    And raising the issue of Free Trade would go away if the Democratic candidates realized how much of Ohio's and Pennsylvania's output comes to Canada. It would hit home once we cut off imports from those states. It simply means both those candidates lost any credibility from my perspective with respect to whether they really understand the issues. It would behoove the Canadian government to release the full trade statistics to put an end to the matter.

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