Vancouver’s (temporary) tech boom

Tom Nyberg | BCBusiness
Samsung’s Tom Nyberg says that while immigration factored into their decision to set up shop in Vancouver, local talent was the main draw.

With lax immigration laws, lower salaries and a common time zone with California, Vancouver has emerged as an outsourcing hub, albeit a small one, for global tech giants searching for software developers

In the spring of 2013, Facebook announced that it had leased a 20,000-square-foot office in Coal Harbour, which would become a “pop-up” boot camp for recent engineering graduates. One year on, Facebook is still in Vancouver, just one of a dozen or so international companies with engineering labs in the city, drawn here because of easy-to-obtain, two-year work visas. But with the federal government tightening up the loopholes in Canada’s temporary foreign worker program, and with changes to U.S. immigration rules looming, Vancouver’s competitive advantage in the global scramble for high-technology talent may not last.

Facebook is one of several tech companies currently using the city as a way to get around the U.S. government’s annual cap on H1-B skilled worker visas. Amazon, which set up shop at the end of 2011, currently has job postings up for 130 technical positions in town and has all but confirmed that it’s moving into a 90,000-square-foot space in the Telus Garden tower in early 2015. Last year, Twitter flirted with the idea of opening a Global Centre of Excellence in Vancouver, a workaround scheme for (mainly) Chinese nationals hired by the company. Intel, Salesforce, SAP, Sauce Labs and Australian website all operate engineering offices of some sort or another.

And then, of course, there’s Microsoft, which has been in B.C. on and off for over two decades. It first made the move here in 1991 to purchase Consumer Software, a Vancouver company pioneering “electronic mail,” in a deal pegged at $15 to $20 million. But by 1994 it had shut down that operation, transferring 85 of its employees to Redmond, Washington. In 2007, Microsoft returned—this time explicitly for immigration purposes. “We opened the lab because we were having trouble getting visas for the best and the brightest,” said then-CEO Steve Ballmer, echoing grievances over the U.S.’s 65,000 cap on H1-B visas. And then this May, the company announced it would be moving into the former Sears Building in downtown Vancouver, adding 400 new roles, in what Microsoft Canada president Janet Kennedy defiantly says is “not a call centre.”

Not all tech giants are attracted primarily for the temporary benefits that Vancouver offers. Global electronics giant Samsung opened its local development centre in 2013— hiring, in part, from a recently defunct Nokia satellite office, which shut down in 2012. Samsung was drawn to Vancouver by the availability of hi-tech talent, says Tom Nyberg, senior director and general manager of the company’s Vancouver Enterprise Lab. And while Nyberg says that Canada’s immigration rules were an important factor in Samsung’s decision, “[they’re] not the primary reason we’re here.” The company, with 33 research and development sites worldwide, recruits locally for the most part, he adds.

There are multiple ways to bring an employee into Canada. If the employee is from Mexico or the U.S., securing a work visa under provisions set out in NAFTA is relatively straightforward, at least for in-demand fields like software development; if the applicant has been on the same payroll for one year or longer, they’re eligible for an intra-company transfer visa. But when it comes to new hires, employers have typically turned to Canada’s temporary foreign worker program, says Craig Natsuhara, a Vancouver lawyer who works on business immigration issues. The temporary foreign worker visa required a labour market opinion (LMO) from Service Canada, whereby the employer had to prove that they could find no Canadian qualified for the position. That process often took months, says Natsuhara—unless you were hiring for a position eligible for an LMO exemption, the list of which included most computer programming roles. The LMO exemption made Canada an attractive place to set up shop. A company could hire for certain occupations—like software developer and game designer—without advertising the position in Canada, allowing them to bring in a developer within weeks.

But with changes introduced by the feds in June (replacing the LMO exemption with the lengthier, more expensive “labour market impact assessment”), a process for getting a visa that took weeks is now expected to take months. And it’s not just changes to Canada’s immigration laws that threaten to alter the equation for Vancouver’s tech community. In the U.S., pressure is mounting to lift the cap on H1-B visas. Microsoft has offered to pay a $10,000 bounty to the American government on every successful H1-B visa application, while President Obama is expected to lift the cap on visas following the November mid-term elections.

Still, Bill Tam, president of the B.C. Technology Industry Association, argues that companies such as Amazon and Microsoft aren’t just focused on parking people here and moving them across the border when the time is right. “There’s a great amount of talent available locally,” he says, noting that Microsoft is staffing up its downtown development centre “so that it actually has development capabilities that will remain here in Vancouver.” And even though the new federal rules have caused some concern, it hasn’t curtailed demand for foreign workers, says lawyer Craig Natsuhara. Vancouver’s digital media studios alone have around 2,000 positions to fill in the next quarter, he notes. “There’s a real need for foreign workers in key positions.”