Today, Canada launched a new immigration program meant to draw entrepreneurial talent to the country. Canada hopes that it can attract businesspeople to start new companies in Canada and invest in Canadian ventures by dangling the promise of permanent residency in one of the wealthiest and easiest places to do business in the world.
The program, which was announced in January, is also an apparent challenge to the US, which has been dealing with a bitter debate over immigration reform that was sparked by the 2012 presidential election.
Although the US does have some programs to attract immigrant entrepreneurs and investors—particularly its EB-5 program—hefty investment financing requirements and an onerous application process mean those efforts have had limited impact. Whereas the EB-5 program requires a minimum of $500,000 investment (in a “targeted investment area”) and grants residency for just two years, Canada’s new start-up visa program requires entrepreneurs to secure just $75,000 from a group of angel investors in order to enter the country. Both programs would award successful applicants with permanent residency. In 2010, the US issued 2,480 EB-5 visas. Canada (even before this new program) issued 12,802 visas for investors and entrepreneurs in 2010.
By launching its new visa program today, Canada is also effectively making a statement about one of the US’s most popular visas: the H-1B. Though a different breed of permit, the stock of these US visas for select, well-educated professionals (generally sponsored by their employers or would-be employers) is exhausted almost immediately after the application window opens. Applicants can apply for the 2014 allotment of those visas starting today.
“The expectation is that we will exhaust our yearly allotment this week, and possibly even in one day, leaving innovators and entrepreneurs out of luck for an entire year,” Jeremy Robbins said in an email to Quartz. Robbins is director of the Partnership for a New American Economy, a group of business leaders led by New York City Mayor Michael Bloomberg and News Corp’s Rupert Murdoch pushing for immigration reform they say is key to the US remaining competitive. “When Canada announced this visa a few months ago, they expressly did so to compete against us and leverage the fact that innovators and entrepreneurs had such trouble coming here.”
Elizabeth Stern, head of Baker & McKenzie’s Global Immigration & Mobility Practice Group, says it’s easy to overstate today’s challenge from Canada to the US, if only because Canada has historically been much more welcoming to immigrants and particularly immigrant entrepreneurs. She nonetheless admitted that Canada was probably “making a statement” in starting its new program on April 1.
“[Canada’s program] is probably the most generous that I’ve seen,” she said in a phone interview. “If you look at established companies, they’re typically not expanding their workforce in the US and other developed markets…[Canada is] recognizing that the new growth in developed markets is coming from start-ups and new businesses.”