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Something Ventured:
September 11th

Insight For BC Technology Entrepreneurs

By Brent Holliday

How To Gain (Or Drain) A Brain

"We come from the land of the ice and snow,
From the midnight sun where the hot springs blowÖ
So now you'd better stop and rebuild all your ruins,
For peace and trust can win the day
Despite of all your losing.
- Led Zeppelin, Immigrant Song

This week, I have a two part column. Part 1 is an introduction to immigration, as it applies to BC tech companies bringing in foreign talent. The second is a response from a reader that tears into the changes in the Employment Standards Act. So, there you go: Two for the price of one this week.

A few months back, a newly arrived US citizen with a technology background sent this e-mail, which I published:

I really enjoyed this column - though it also pushed the barb in my side a bit deeper. Imagine this: A director-level sales & marketing executive with ten years' experience in software & other high tech ventures, including European & U.S experience suddenly lands on BC's doorstep - relocated free-of-charge, thanks to spouse. Sound like an up & coming tech-company's dream?

You would think so, but since the executive is American, firms get skittish about 'immigration issues' and take a pass. Odd, considering NAFTA holds the door wide open. I don't believe they're xenophobic - just leery of any cost & time associated with involving an immigration lawyer.

I believe if BC tech firms truly want to grow, they're going to have to take that leap and open up to the outside - imagine how many talented ENGINEERS they could be missing out on. I've only been here a short time, but I don't see the support coming from provincial government to help smaller companies recruit this kind of talent hassle-free? Am I wrong?

Aileen McManamon

It really irked me that she had received the response that she did from BC tech companies. The part about the provincial government supportÖ well, par for the course. This week, I have actually done some research into this subject. What follows is my interpretation of the immigration jungle that I culled from web based information, some of my investee company personnel and actual living, breathing US citizens working here. By the way, the cost and time for a company to bring someone in from a foreign land appears to be very minimal. Read on.

Before I dive in, it may occur to you that I am also laying out part of your getaway plan to leave BC for greener pastures. You can, for the most part, reverse everything said here for emigrating (I also assure you that this is not a diabolical plan to increase brain drain, given that my last column talked about why the currency changes make it even less attractive to be here). Out of respect for my beleaguered investee company CEOs, I will refrain from actually planning the escape for you. Enough kowtowing. Let's get on with the lesson:

Some terminology

NAFTA - North American Free Trade Agreement covering US and Mexican citizens
GATS - General Agreement on Trades and Services that covers all other foreigners that are citizens of GATT countries (General Agreement on Trade & Tariffs)
Landed Immigrant Status - The Canadian equivalent of a "green card". Allows you to permanently live in Canada, pay taxes (yippee) and get bank loans. Basically everything a citizen can do except vote and get a passport.
Ports of Entry - Any major airport or customs office at a major border crossing from the US. Embassies and Consulates are for more complex issues like landed immigrant status, citizenship. Ports of Entry are for NAFTA related entry.
HRDC - Human Resources Development Canada - the employment ministry of Canada
CIC - Citizenship and Immigration Canada - self - explanatory Canadian ministry

Hiring a foreign technology worker

Let's assume 1) that Aileen is a US citizen 2) that she has been recruited to come here and work 3) she is not working for a parent or subsidiary company and 4) that she actually wants the job despite the onerous taxes and cost of living. If you like Aileen's resume and you want to hire her here in BC, you have a few decisions to make. The first is whether you will bring her in under the NAFTA agreement or receive "validation" from HRDC.

Now, just so you understand (I sure don't), immigration is controlled by the federal agency known as CIC. They have all the details on NAFTA and GATS, a treaty signed by over 180 member nations that participate in GATT. Why you have to bother petitioning some polyester-clad bureaucrat at HRDC only to get yet another 9:30 - 4:00 (with an hour for lunch and two 45 min coffee breaks) bureaucrat at CIC to stamp the paperwork is beyond me.

"Validation" basically means that you must satisfy the aforementioned HRDC that you have sufficiently tried to find someone in Canada with the expertise and have not had any luck. I guess HRDC is just trying to protect Canadian jobs when they ask you, the company, to make sure no Canadian is available to do the specified job description. This arbitrary process could mean that you, the struggling young tech company, must put an ad in a national newspaper and/or wait for 10 -15 weeks while pretending to be combing the permafrost for your desired worker. Thank God for NAFTA. If Aileen fits the criteria for entry under NAFTA, you can kiss HRDC good-bye. I must admit that some anonymous BC company managers have confided in me that you can actually significantly shorten the whole "validation" step if you know how to write a detailed job descriptionÖ but a company could get burned. You have been warned.

NAFTA allows for temporary entry to Canada only. Is Aileen going to live and work here full-time for the foreseeable future? The reason I ask is that there are three definitions of a foreign worker to Immigration Canada:
1. Business Visitor
2. Professional
3. Intra-Company Transferee

As I see it, the difference between Business Visitor and Professional is the duration of stay and where you pay tax. If the job is a contract for less than 6 months, then the worker is a Visitor and pays taxes in the US. Professionals, under NAFTA, can actually stay and work as long as five to seven years, as can Intra-Company Transferees (which are exactly what you think they areÖ working within a company or its subsidiaries). If you stay beyond 6 months, then you have to pay taxes in Canada. I know, I said that NAFTA was temporary. But the reality is that contracts could stretch out for years. 

The really big issue: Spouses!

Aileen actually arrived here as a spouse, presumably because her husband is here working under NAFTA work visa. That presents a problem. Spouses of temporary workers (Business Visitors, Professionals or Transferees) under NAFTA, GATS or HRDC "validation" cannot work here. They must get their own work visa or do nothing. In Aileen's case, she wants to work here and can probably get in under NAFTA. According to what I have learned, I would suggest that she offer her services as a management consultant to a local company (sales and marketing executives in software or any other field are NOT listed in the eligible NAFTA list). She would then re-enter the country under NAFTA for a contract position in order to satisfy the requirements. I have been told that this is the nudge, nudge, wink, wink of the NAFTA work visa. It appears that if you have proper education requirements, you can say one thing to the customs officials, but really perform the tasks as a sales and marketing executive.

What about Aileen coming here to work and her husband is a teacher? He cannot get a NAFTA visa and won't be able to work! Assuming that they need the two incomes (in Vancouver? nahhhh), why would they bother moving here? The answer is the Landed Immigrant status. One spouse needs to qualify under NAFTA, GATS or "validation" to get their work visa. Then they BOTH apply for Landed Immigrant status. Assuming the interviews go well, both will get their status in about two to three years. Then the spouse can work. Want to speed that process? Invest $400,000 in Canada or talk to an immigration consultant and see what might be done to fast track your applicationÖ

BC Tech companies hate the spouse rule. This has now been identified as a serious problem and the federal government is looking at changing the NAFTA regulations to allow the spouse to work without Landed Immigrant Status. Stay tuned.

What about people coming to work from other countries, other than the US?

The GATS allows for other foreign nationals from GATT countries to enter. It is almost the same as NAFTA, only the term is shorter (three years) and some educational requirements are tougher. The reason it is a huge pain to get is that, unlike NAFTA, you must petition a Canadian mission (embassy or consulate) in your own country to get this work visa. A friend of mine with Indian citizenship said that it takes 5 to 8 months to get an entry visa under GATS from India. The good news is that the allowed professions are much more widely described under GATS.

How does all of this immigration actually happen?

From the US or Mexican employee's point of view it is all done at the port of entry (Peace Arch or Vancouver Airport). You need a few things, like a letter from your new employer and proof of your education and experience. From the company's point of view, you should have a specialist in the company that at least has read all of the documents I am linking to here. There are professionals that can be retained for better advice than I can possibly give. When I look through the TIA directory, I see Clark, Wilson as the only law firm in town listing Immigration specifically as a specialty. I'm sure there are others, too.

There are two more projects under way that are of interest to BC tech companies. The first is the Software Development Worker Pilot Project. It is actually national in scope, but is designed to help curtail the "severe shortage" in IT professionals. The pilot has been extended to December 31st, 1998. It was meant to help skip the HRDC validation for a very specific set of software programmer talent. The descriptions are so specific that only 400 or so have entered Canada under the pilot. 

The other is that the province of BC and CIC have signed an agreement to co-operate on immigration issues. Basically, BC sees itself as a special case among Canadian provinces due to its overwhelming number of immigrants over the past decade. The provincial government says that they will look at the skilled worker category and try to expedite the process for workers coming to BC. Hmmm. We'll see. 

One last point. Remember, this column is no replacement for sound advice from someone who knows a lot more than me. While I hope Aileen can get work, I must also stress that each case is reviewed by CIC on its own merits.

So that's it. You're up to date. If you are still awake then consider yourself informed.

Response From Last Week's Column:

Actually, this response is quite interesting. It was submitted to the Vancouver Sun for the "In My Opinion" column. It was shot down. I'm printing it here, but keeping the authour anonymous. He's legit and I think what he has to say is eye-opening. Besides, he refers to my column...

A few weeks ago the provincial government announced its intention to change the Employment Standards Act as it applies to the high-technology industry. Professional staff (programmers, engineers, systems analysts, animators, etc.) will become exempt from regulations governing hours of work, statutory holidays and overtime pay. According to the Vancouver Sun, "the industry wants the government to recognize that high-tech companies are staffed by young, creative, educated employees who are willing to work long hours to complete projects and are rewarded with good pay, bonuses, stock options and extra time off when the work is done." An exemption is necessary because industry lobbyists insist that "existing regulations make it difficult to recruit skilled professionals and hamper its ability to grow into the new flagship of the B.C. economy." ("Eased laws for high-tech professionals due in fall", August 6, 1998.)

A few days later a Sun editorial commented favourably on the changes, declaring that "creative professionals" in the high-technology sector should not be constrained by normal working hours. I work in the software industry, and I have never felt constrained by normal working hours. In fact, I have yet to meet a programmer who did not finish a project before the deadline because he or she was legally required to go home at five o'clock every night. Which leads me to conclude that the rationale for this proposed exemption is hypocritical and flawed.

First, the notion that workers in the high-technology industry are willing to put in long hours in exchange for great rewards. What are the rewards, exactly? According to the Sun article, the median high-tech salary in British Columbia is $41,000 CDN. (Compared with $52,000 US in Washington, almost double at current exchange rates, and $43,000 US in Oregon.) Bonuses and extra time off are the exception, not the rule. As for stock options, well, a few people might be getting rich but it certainly isn't the average worker, who might one day expect a windfall equal to several months' pay if the company does well. It's certainly better than nothing, but there are no guarantees, and is the potential return really worth four years of sixty-hour weeks?

Second, the notion that regulations impair recruiting. Exactly how many candidates turn down offers from B.C. companies because their employers are not allowed to require that they work long hours without compensation? Precisely. The real issue is money. It is difficult to prevent Canadian talent from leaving the country - and almost impossible to hire experienced foreign professionals - because they earn less than half the take-home pay of their counterparts to the south. This is the source of the "brain drain".

An informal survey of five Canadians working in Silicon Valley conducted by a columnist for the B.C. Technology Association revealed that money and opportunities for advancement were the primary factors motivating their decision to leave Canada, despite their near-universal distaste for living conditions in California. I fail to see how the suspension of workers' rights and protections will encourage more qualified applicants to seek high-tech jobs in British Columbia.

Employment standards are no constraint to growth in the high-tech industry. Uncompetitive salaries are a constraint, but the industry will not raise them. High personal income tax rates may be a constraint, but the government will not lower them. (The industry constantly complains about taxes, though any Canadian who has lived in the United States well understands that they are receiving something of value for their money.) What options remain, beyond a sorry piece of political theatre? None, evidently.

And these changes really are little more than an act of political theatre, an argument about nothing, because the Employment Standards Act was never applied to the high-tech industry. They are no better than a smokescreen, a cheap attempt to deflect attention from the real problem. It is particularly unpleasant to see the Clark government agreeing with industry propaganda, as if we share no common interests with the NDP's traditional support base in organized labour. The proposed exemption only serves to sanction existing practice in a manner profoundly insulting to the worker.

My reaction, when I first heard about the proposed exemption: union, anyone? Then I began thinking about work, its role in modern society, and its role in my life.

I enjoy my job. I find satisfaction in the creative challenge. I derive pleasure from a task well-executed, from the perfection of tiny details, from the fruition of ideas and the completion of projects. Nevertheless, I refuse to join the cult of overwork. I work hard for forty hours each week, no more, no less. I'm willing put in extra hours in an emergency, but I am careful to take the time off later. I use all the vacation time to which I am entitled. I believe that I am more effective because I enjoy an active, balanced life and I am rarely exhausted. A happy and well-rested employee is a productive employee!

I understand the compulsion to overwork when it is predicated on the expectation of future payoff. This makes sense in certain situations - a Microsoft Brahmin or a partner-track lawyer - but in my case the potential reward is far too small to justify the sacrifice. I don't have time to work long hours. Like Max Weber's Catholic peasant, I prefer leisure to additional wealth.

Overwork is more often a result of social and cultural pressures than a response to economic opportunities. The merging of work life and social life leads to particularly insidious forms of exploitation. Why leave the office when all your friends are still there? Working less than they do would be letting them down! High-tech companies with pool tables and lounges are not "hip" to the needs of their young employees, they simply understand that a pseudo-social office environment encourages peer-reinforced "voluntary" unpaid overtime. Good "team players" don't care about employment standards, they only care about getting the job done.

In a larger context, the cult of overwork is a consequence of the atomization and fragmentation of modern civil society. The disappearance of intermediating bodies - churches, associational groups, extended families - leaves work and consumption as the only remaining means by which individuals construct personal identity. Combine the broad social trend of work-as-identity with media-fueled downsizing hysteria and you have a recipe for seriously overtaxed workers.

For now, I am not unhappy with my salary or my working conditions - I am simply offended by the blatant hypocrisy of the proposed changes to the Employment Standards Act.

What Do You Think? Talk Back To Brent Holliday

Something Ventured
is a bi-weekly column designed to supplement the T-Net British Columbia web site with some timely, relevant and possibly irreverent insight into the industry. I hope to share some of the perspective and trends that I see in my role as a VC. The column is always followed by feedback (if its positive or constructive. I'll keep the flames to myself, thanks).

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