Uh-O Canada: The Newest Nearshore Threat?

Stymied by U.S. immigration hurdles, U.S. IT firms are opening shops in Canada to attract foreign-born talent, and Canada is making it easy. Will Vancouver be the next outsourcing hot spot?

Fed up with U.S. immigration hurdles, Microsoft announced July 5 plans to open a software development center in Vancouver, British Columbia, that it hopes will "be home to software developers from around the world."

Employing as many as 900 workers within a couple years, the facility, to be called the Microsoft Canada Development Centre, is slated to open in the fall of 2007, though the company said it has not yet determined who will staff the facility.

"Microsoft is a global company, and our greatest asset is smart, talented, highly skilled people," said S. Somasegar, corporate vice president of the companys Developer Division.

"Our goal as a company is to attract the next generation of leading software developers from all parts of the world, and this center will be a beacon for some of that talent."

Analysts were quick to suggest that the move may signal the start of a new hiring trend, in which other technology companies, frustrated with the difficulty of bringing skilled foreign workers to the United States to staff their companies, will follow in Microsofts footsteps to Canada, where it is easier for foreign nationals to obtain work credentials.

PointerClick here to read about "Offshoring 2.0" in the post-India market.

Microsoft, along with other large tech employers, has long lobbied the U.S. Congress to lift the quotas on the number of H-1B temporary worker visas available each year. The entire 2007 fiscal year supply was depleted in one day, theyve argued, and the demand far exceeds the supply.

The most recent attempt to raise visa limits—the Comprehensive Immigration Reform Act of 2007—faltered June 28, when the Senate voted against advancing the controversial legislation, which included a provision to raise the yearly limit on H-1B visas from 65,000 to 115,000, with a built-in escalator allowing for up to 185,000 visas, depending on the market. The failure of the legislation to pass was a disappointment to large technology employers, which immediately released statements condemning what they see as limits to U.S. competitiveness and a damper on technological innovation.

PointerClick here to read more about Congress death blow to the H-1B initiative.

In a press release, Microsoft did not mince words about how the new facility will allow "the company to recruit and retain highly skills people affected by immigration issue in the U.S.," a move that seems to send a clear message to the senators who let the H-1B increase slip through employers fingers.

A Skilled Immigrants Dream

Although Microsoft houses research and development centers in the United Kingdom, India, China and Silicon Valley, the Canadian center—chosen, according to Microsoft, because the Vancouver area is both a "global gateway with a diverse population" and "is close to Microsofts corporate offices in Redmond [Wash.]"—is considered an especially nerve-racking move to U.S. IT professionals, as it could pose a more immediate threat to their jobs.

Canada has no limits on the number of skilled immigrants who are able to come to the country under work permits. Furthermore, gaining permanent residency and citizenship is considered overall easier than in the United States. Canada utilizes a calculator that rewards points for education, English and French language ability, and work experience. Skilled immigrants who can amass 67 points are given a green light for entry.

Arranged employment before a skilled immigrants arrival—a job offer that is approved by Canadas Human Resources Development because the vacancy would be difficult to fill from the local population—is given relatively little weight compared with the United States, where it is a requirement for entry.

Furthermore, in 2003, just before the United States slashed the yearly available number of H-1B visas from 195,000 to its current level of 65,000, Canada made it even easier for skilled immigrants to enter the country, reducing their minimum point requirement from 75 to 67.

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