Talent Development Centre

Tag Archives: usa

All Talent Development Centre posts for Canadian technology contractors relating to the United States.

US Immigration Policy May Help Canada’s Tech Sector

David O'Brien By David O’Brien,
Vice President, East Region & Government Services at Eagle

Canadian Maple LeafRecent events both South of the border and across Europe have brought immigration to the front pages as a hot button issue. Undoubtedly it has been a very polarizing social and often disturbing humanitarian issue. But what can we make of the economic and business ramifications for Canada in these changing times?

There is most definitely a labour problem in the entire Canadian economy and one that by all measure is about to get worse. The demographic headwind that we face is a potentially lethal combination of boomers retiring over the next 15 years and an overall aging population not supported by growing birth rates. Economic growth in Canada is inextricably linked to both labour growth and productivity, both of which can be addressed through strategic immigration.

This challenging future that could see more people leaving the workforce than entering in Canada and the structural problems that would entail can be alleviated to some degree by immigration. Canada is not alone in this; in fact, most major economies in the world are facing these kinds of issues. For example, Japan’s economy has stalled as the combination of a low birth rate and very low immigration intake resulted in one of the poorest GDP growth rates of the world’s largest economies.

Canada historically has and will likely always be a leader in helping the world’s most downtrodden and desperate refugees and for that most Canadians are proud. Additionally, how do we also compete to attract in our immigration policy the marketable skills, education and experience that will help boost an economy? These so called Economic immigrants have made up a larger proportion of the immigrant intake for the last decade or so in Canada and will likely remain a focus of immigration policy.

US Immigration Policy May Help Canada's Tech SectorToday, though, with changes in the US landscape as a result of the election of Donald Trump has perhaps led to a very real opportunity for Canada, especially in the Tech sector. Many Silicon Valley based Tech companies have been vocal in their very real concern that the change in US Immigration policy will be very detrimental to them and what they already contend has been a tough struggle for top talent. Foreign workers have been a crucial piece of the Silicon Valley tech skills gap puzzle and with the changes in policy, and perhaps even the heated atmosphere in the US as a result, many skilled tech workers will look to Canada as an option. There are mechanisms in place already such as Canada’s Global Skills Strategy that allow companies to quickly acquire the skills they need on an initial short term basis.

It has always been very tough for Canada’s high tech companies to compete with the allure and frankly other worldly perks and compensation of Silicon Valley but these days perhaps they now have a leg up.

Staffing & Recruitment Industry South of the Border

Morley Surcon By Morley Surcon,
Vice-President, Western Canada at Eagle

Staffing Industry Analysts LogoLast week I attended the Staffing Industry Analyst‘s conference that was held in San Diego. In addition to taking a break from the cold Canadian winter, it provided the opportunity to get a sense of the current state of the staffing market in the USA.  This is important as the American market tends to lead the Canadian market in trends and innovation. It provides a glimpse into what may be coming for us in Canada.

Before I share some of my observations, let me explain what the Staffing Industry Analysts organization is and does.  The SIA describes themselves as:

Staffing Industry Analysts (SIA) is the global advisor on staffing and workforce solutions. Our proprietary research covers all categories of employed and non-employed work including temporary staffing, independent contracting and other types of contingent labor. SIA’s independent and objective analysis provides insights into the services and suppliers operating in the workforce solutions ecosystem, including staffing firms, managed service providers, recruitment process outsourcers, payrolling/compliance firms and talent acquisition technology specialists such as vendor management systems, online staffing platforms, crowdsourcing and online work services.

This organization is really connected. Their research is significant and the huge sample-size ensures accuracy.  Eagle is a member and we follow their publications religiously.  Over many years, their outlook has consistently been proven correct.

With this said, I’ll share a sample of interesting things that I learned… some of which may confirm what you already know/believe while some others may surprise you as it did me:

  • There is a world-wide shift in employment from permanent employees to contract/temporary labour.  This is both being driven by the people themselves as their preference and by employers recognizing the value of employing contingent workers.
  • Contingent workers grew from 12% of the working population in 2009 to 22% in 2016 with 44 million American workers now doing contingency work.
  • The adoption of MSP (Master Services Providers) has plateaued in the USA.  Although this offering is still growing globally, it is no longer the case in the US market.
  • Moreover, I was surprised to find that there was a marked move from outsourced, off-shored service solutions, back to in-house-managed solutions; companies are repatriating their business and technical teams to manage their own projects and operations.
  • The staffing industry in the USA is also getting crowded with nontraditional service providers such as online staffing solutions, cloud-based solutions with AI (artificial intelligence) and Robotic solutions coming on strongly.  This is resulting in a more complex and potentially confusing ecosystem.
  • Niche/specialized contingent labour providers are growing their market share at the expense of the generalists.
  • Globalization of staffing companies appears not to be growing as quickly as it had previously.  Through technology, globalization is in the reach of most companies big or small, but “buy-local” political philosophies and increasingly complex legal structure, laws and regulations are curbing the ease of expanding to new markets.

Although this is a very short list of information from the conference, you can find many more reports and statistics at SIA’s website:  http://www2.staffingindustry.com/row/Research/Research-Topics-Reports.

In summary, the staffing industry in the USA is very active and the outlook is quite positive. Technologies are coming out that will change the way recruitment agencies and the hiring companies source candidates and appears to be playing the role of disrupter for MSP’s going forward.  The overarching trend is for companies to bring their own projects back in-house after having tried off-shore or outsourced solutions.

NAFTA Revisions and Technology Workers in the US

Frances McCart By Frances McCart,
Vice-President, Business Development at Eagle

How could trade policy impact Canada’s technology sector?  (A silver lining perhaps?)

NAFTA Revisions and Technology Workers in the USSince Trump’s announcement he will be changing the NAFTA terms, I have had many technology professionals ask my 2 cents about getting or keeping their TN work permit status under NAFTA.  It is too early to tell what changes will be made to NAFTA and the issuance of work permits under various professional categories but one thing is for sure, technology resources are concerned.

The US has had the benefit of NAFTA to hire many of Canada’s top technology talent, especially in Silicon Valley. Many corporations such as Microsoft, Facebook and Google heavily use the TN1 and L1 work permit categories to hire Canadian talent.  Under NAFTA, this was once a fairly straight forward process for technology professionals possessing the right qualifications, but it may become more onerous, highly restrictive and less attractive.

This is bad news for the US technology sector.  In a time of great growth and change, the last thing the sector needs is a government imposing restrictions on hiring technology professionals that are desperately needed.  The tech sector relies heavily on a global talent marketplace to staff projects.  Recently, the U.S. Department of Labor forecast that the US will create some 1.4 million IT jobs by 2020, but US schools will barely be able to fill a third of them.  Technology recruiters turn to Canada as the first place to recruit potential resources due to our common language, culture and schooling.  The recruiters also rely heavily on countries where having a degree in math/computer science is highly valued and youth are heavily encouraged to get into technology.

Is there a silver lining with potential changes to NAFTA and US immigration laws for Canada?  Yes, with uncertainty comes confusion and interest levels working in a country where your worker status is unknown and could change at a moment’s notice, people will rethink the US as a go to for technology jobs.  Canada definitely has the need to take on tens of thousands of new technology professionals.   In a recent Huffington post article, it was noted “Out of 527,000 students who graduated in Canada in 2015, only 6 per cent — 29,000 — graduated from an IT field, the report found. Canada would have to graduate around 43,000 IT students per year to keep up with job growth.”  So, let the hiring begin!!

Over the past decade and a half, Canada’s technology sector has been heavily impacted by the brain drain to the south.  According to a recent CBC post, between 30,000 – 40,000 professionals are working in the US under NAFTA’s TN work permit status.  A large percentage of these professionals are technology professionals.   This number does not also include those who are in the US under other work permit categories. So, needless to say, a lot of top Canadian technology talent is working in the US.

Canada’s technology industry has matured significantly over the past 5 years and many US Tier 1 technology firms have expanded their Canadian footprint.  Canadians working in the US now have more opportunities to find similar work to those located in Silicon Valley.  Canada’s technology sector would more than welcome these resources back to Canada as well as those on the global technology marketplace who no longer see the US a viable place to have a technology career.

Canadian technology CEOs and recruiters should take this opportunity to entice Canadian workers back to Canada.  Time to seize the moment!

Sources & Additional Reading 

The Tax Implications of Doing Business in the U.S.

This post first appeared on the CA4IT Blog, December 7th, 2015

Tax-Saving Opportunities for Independent Contractors

The Tax Implications of Doing Business in the U.S.Because data flows freely across international borders, many IT professionals have developed an international clientele. While doing business internationally can help Canadian companies to grow, smart business owners are keeping an eye on the tax implications of doing business in the U.S. The Canadian Business Journal reports that while most Canadian companies are on top of the federal tax laws that apply to their U.S. business activity, some are unaware of the state and local taxes that can significantly cut into their profits.

According to CFO Magazine, a number of states are becoming aggressive about collecting additional income tax revenues from corporations by asserting economic nexus ­­– a situation in which a business has a sufficient connection with a state to subject it to taxes imposed by that state. A CFO survey found that California and New York are the states that are most aggressively leveraging economic nexus to generate tax revenues, followed by New Jersey, Michigan, and Massachusetts. A number of other states are also actively seeking to collect tax revenue from business from other states and other countries.

Complicating the situation is that each state has its own tax code, which makes for a wide range of state tax bases and rates. And it’s not just states that are looking to maximize their revenues at the expense of non-local companies. Many cities and municipalities have their own rules covering income taxes, gross receipts, and sales taxes.

Income tax accountants recommend that businesses research state and local tax laws before establishing a nexus in an area. Understanding your obligations before you start doing business across the border gives you the best opportunity to reduce your tax liability. If you’re already doing business in the U.S. and haven’t paid state taxes, The Canadian Business Journal recommends that you evaluate the benefits of entering into a voluntary disclosure agreement with the state. A voluntary disclosure could result in a reduction in multi-year back tax liabilities and might reduce the penalties and interest you may owe. A voluntary disclosure could also mitigate potential criminal penalties arising from a failure to file taxes in the U.S. Be sure to consult a tax attorney before making any disclosures to a government agency outside Canada.

Tax liability is a complicated area. If you’re interested in expanding your business into the U.S., or you have already established an American clientele, it would be to your benefit to consult an accounting and bookkeeping service or more ideally a professional accounting firm like CA4IT that specializes in helping IT consulting professionals. Give our experienced CPAs a call today at 800-465-7532 or contact us by email.

How You Can Work in the US as an Independent Contractor

Frances McCart By Frances McCart,
Vice-President, Business Development at Eagle

Please Note:  The content in this post has not been updated to reflect the current environment between Canada and the United States. As such, information may not be completely accurate. Please consult with a lawyer or accountant for the most accurate advice.

Over the past 4 months, many contractors have asked me if they should consider US contract positions, given the Canadian market.  My advice is always to go where the opportunities are and Eagle has begun to see an uptick in US firms being interested in Canadian IT contractors.  Naturally, the next question I’m usually asked is how difficult it is to secure a work permit for the US.  As long as you qualify under the TN-1 status for which you’re applying, it isn’t too much of a challenge.

The TN-1 status is given to Canadian “professionals” seeking a U.S. work visa and whose Canadian and American flags shaking handsoccupation is on the List of Professional Occupations under NAFTA. Canadian professionals involved in the IT field, engineering, and consulting, frequently use the TN-1 status . Generally, in order to qualify for a TN-1 work visa, you’ll need either one of the following:

  • A bachelor’s degree from a U.S. or Canadian college or University; or a foreign degree professionally determined to be the equivalent to a U.S. bachelor’s degree;
  • A 3-year Post Secondary School diploma; or,
  • A 2-year Post Secondary School diploma plus at least 3 years experience.

The most common categories that IT professionals enter the US under are either Computer Systems Analyst or Management Consultant.  You can find the full list here (scroll to Section 3.8) and this link from the Canadian government provides additional information about temporary entry into the US under NAFTA.

Once you understand the process, it is important to work closely with your petitioning firm in ensuring you have all the proper documentation to enter the US and petition with the INS for TN Status.  The most common issues I have seen over the years is a lack of supporting documentation.  When petitioning for TN status, it is critical to have the following documentation in hand PRIOR to going to a port of entry (border crossing or at a Canadian airport that has a US immigration office onsite).

  1. Original copy of your degree/diploma plus any relevant certifications, such as PMP.
  2. If the degree/diploma is not from a recognized post-secondary institution in North America, the INS official will ask that the credentials be accredited by a North American institution.  An example of a comparative education accrediting body is the University of Toronto’s Comparative Education Services Group
  3. Current passport (make sure it does not expire within 6 months of your application)
  4. Updated resume with information reflecting on your resume as to why you are qualified for the role in the US
  5. Reference letters from previous firms (especially for the Management Consulting category)
  6. Petition letter from the firm requesting your services in the US
  7. Copy of your work contract/letter of employment that states your compensation and work that is being done in the US

The TN petition process is a serious process and should not be taken it lightly.  In fact, many Canadians have been turned away for not being prepared. There is a lot of information on the Internet about the TN application process — some good but some bad! We recommend using the links above to start gathering information but, more importantly, consulting with a lawyer whose expertise is in securing TN status.   If you do have any further questions or comments that may help other professionals, please leave your thoughts below and we’d be happy to help guide you in the right direction.