Has Trump Has Pushed Companies Out of America and Into Canada?

by Startacus Admin

Are President Trump’s ‘American First’ policies in danger of pushing American companies over the border into Canada? And if that happens, could a lot of skilled workers and essential supplies be lost in the process?

At the start of the pandemic, President Trump made it clear at a press briefing that he wasn’t happy about essential medical supplies, including N95 respirators, being exported to Canada. He vowed to use the Defense Production Act to prevent US companies from exporting medical supplies to other countries, including Canada.

Canada Unhappy about President Trump’s Export Ban

This news was not taken well by President Trudeau - or the US companies responsible for manufacturing medical supplies. Not that Trump was overly bothered, of course. He merely reiterated his plans and told US manufacturers they were welcome to “push back if they want”, it wouldn’t change a thing. He did, however, say later that long-term orders would be allowed to go ahead, and FEMA could exercise discretion when checking exports, but this hasn’t prevented many US medical supplies companies from moving over the border.

It's not just US manufacturers who are wondering whether life is better north of the border – skilled professionals are equally disenchanted with conditions in the US. As far back as 2018, increasing antagonism towards immigrants, fueled by the many divisive comments made by President Trump, has encouraged skilled professionals to leave America and seek their fortunes in Canada.

Highly-Skilled Engineers Have Given Up on US Green Cards

Many high-skilled engineers have given up waiting for a Green Card that never comes. They have packed up, left their well-paid jobs in places like Silicon Valley, and moved to Canada. Each time Trump’s rhetoric fuels the fire against immigrants, more skilled workers leave the US for a more peaceful life in Canada. There are some anti-immigrant groups in Canada, but they have gained nowhere near as much traction as the alt-right groups in the US. This is partly because one in five Canadians were born overseas, so immigration is viewed as a positive thing.

The hostile environment in the US has made it difficult for tech companies to recruit skilled professionals. Many of the most skilled graduates come from Chinese and Indian universities, but they are not welcome in the US. It’s far easier to secure permanent residency in Canada, where the country of origin is irrelevant.

Canada Offers Many Benefits for Businesses

For US companies in the tech sphere, access to skilled employees is critical. Opening a subsidiary or branch office in Canada is becoming an increasingly attractive option.

Canadian corporation tax rates are lower than the US, currently sitting at 15%. Businesses with headquarters in the US won’t have to pay income tax on profits earned in Canada. Doing business in Canada is also reassuringly familiar. There is the language to consider, as a significant number of people in Quebec speak French, but as long as you have some French-speaking employees, this should not be a problem.

The Canadian economy is also relatively stable. It survived the 2008 financial crisis, and many of Canada’s banks are now the strongest in the world. Canada is a great market for technology, renewable energy, and financial services. In short, it has a lot to offer, not least of which includes a significant pool of skilled workers.

Opening a Branch Office or Subsidiary in Canada

Moving a business into Canada is fairly straightforward. Different provinces have their own regulations, so decide which province is right for your business before you go any further. For example, Toronto has strong tech and financial services sectors whereas construction, manufacturing, and the service sector are strong in Ontario.

Some provinces are more flexible than others about non-resident businesses. If your business wants to expand into British Colombia, all you need is a PO Box address and the correct work permits for your employees. Once you have all this in place, you will need to submit an Investment Canada application, which will be reviewed by the authorities.

Employing Canadians

Other provinces have their own guidelines and requirements, so check these before you do anything. A Canada EOR company can help you with all aspects of HR. For example this provider can help. GlobalPEO provides a Canada employer of record service for businesses hoping to set up a subsidiary in Canada. This Canada PEO company can help you hire and onboard employees, process payroll, and deal with employee benefits, thus saving you money and providing legal liability coverage.

Anyone who wishes to start a business in Canada and operate it from Canada will have to immigrate to Canada. The only way around this is to form a partnership with one or more Canadians.

Always take legal and financial advice before you think about opening a branch office or Canadian subsidiary. However, based on the current economic and political climate in the US, Canada is looking increasingly attractive to US businesses.

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Published on: 28th July 2020