Talent and money are the heart of any startup ecosystem. And it’s hard to imagine a scenario where having access to more talent isn’t an advantage for upstart companies. Which is why Canada’s new startup visa, announced yesterday, could be the beginning of something great.
Two things in particular make the new visa unique: candidates will be chosen by approved venture capital investors, not the government, and will receive permanent resident status immediately. As a pilot program, the new startup visa is somewhat limited in scope. For the next five years starting Apr. 1, only 2,750 of these visas will be made available every year for entrepreneurs and their families. After that, the program will be reviewed and either discarded or made permanent.
Let’s hope for the latter—and maybe an increase to the number of visas made available as well. Canada is in a particularly good position to attract entrepreneurial immigrants and it shouldn’t waste any time. In part, our advantage comes thanks to America: our neighbour’s immigration system has become so difficult that many entrepreneurs are giving up and looking elsewhere. Indeed, a Kauffman Foundation study released in October unveiled that immigrants founded just 43.9% of the startups in Silicon Valley last year, down from 52.4% in the last seven years.
That’s bad news for America, especially at a time when its economy could use a boost, but it creates a window of opportunity for Canada just as Barack Obama moves immigration reform to the front burner of American politics.
“I know of people who wanted to start a company in North America, but the process in the U.S. is just so ridiculous,” says Allen Lau, CEO of Toronto-based tech startup Wattpad. “Canada should be able to absorb those types of companies.”
Lau says the new entrepreneur visa is better than Canada’s previous one, which required an immigrant to employ one person for a year. “There’s a lot of unknown in starting a company,” he explains. “In the early days, you may not be able to employ anyone.” For the same reason, he also likes that it’s unconditional. For many entrepreneurs, the promise of permanent resident status in Canada should be more appealing than the fear of deportation in America.
We already have a strong ecosystem for startups (although we struggle to retain them), so the groundwork is here. In fact, three of our cities recently ranked among the 20 best startup ecosystems in the world (Startup Genome ranked Toronto ranked eighth, Vancouver, ninth and Waterloo, 16th) and according to Lau, “we are in a much better situation than we were five years ago.” Here’s hoping he can say that in another five.
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