Despite having some of the best universities and training programs in the world, the U.S. struggles to retain high-value international students, thanks to our outdated immigration system. Canada has historically been one of our competitors for talent, and new data obtained by the Niskanen Center demonstrates just how stark this problem has become. To remain competitive in the global market and address labor shortages, the U.S. must find ways to prevent the continued loss of domestically-trained talent.

The data demonstrates that Canada is poaching U.S. educated workers from foreign countries. They are eager to profit from the valuable training of our graduates and can do so by taking advantage of the systemic shortcomings that often render our labor market inaccessible to these foreign students. 

Niskanen recently obtained previously unreported (and still unpublished) data from the Canadian immigration office’s Statistical Reporting Group detailing top Express Entry applicants’ educational and citizenship backgrounds. Express Entry is Canada’s recruitment arm for skilled talent worldwide. Recipients can pursue permanent residence in Canada without requirements for employer sponsorship or secured employment. Express Entry applicants must demonstrate their language skills, educational credentials, and work experience and are then ranked as a part of Canada’s point-based system. Only the top applicants are invited to seek permanent residence. 

According to the data we obtained, between 2017 and 2021, approximately 45,000 invitations went to skilled workers who received their postsecondary education in the U.S–88 percent of whom were not U.S. citizens. 

This is especially disconcerting because many international students at American universities do want to work in the U.S. after graduation. What’s more, the U.S. suffers from labor shortages in many key industries and desperately needs these students. Still, our outdated immigration system makes employing them unnecessarily difficult.

One of the most common pathways for international students to remain in the United States is Optional Practical Training, followed by a bid in the H-1B lottery. Unlike Express Entry, success in the H-1B lottery is not based on merit, but on a random selection of petitions chosen for adjudication. The most recent rate of selection was about one in four, meaning that nearly 75 percent of H-1B hopefuls never had the chance to put their credentials before U.S. immigration officials. 

This lottery and the overall capacity restraints of the immigration system put the U.S. at a distinct disadvantage. We invest in educating and training thousands of international students every year, often with incredibly valuable skill sets. But then we don’t offer opportunities for these skilled individuals to stay and contribute to our economy after graduation–despite the high demand from employers. This amounts to our loss, and Canada’s gain.

Since 2013, Canadian companies have regularly run billboard advertisements in Silicon Valley to target and potentially poach U.S. educated foreign workers that are frustrated by the American immigration system’s limitations. These billboards are straightforward: “H-1B Problems? Pivot to Canada.”  Though they target individuals, companies are also responding. 

According to Envoy Global’s 2022 Immigration Trends Report respondents, 71 percent of American employers are pursuing global strategies to retain talent that couldn’t obtain U.S. work authorization, with Canada being the top destination for employee relocation. 

This is a win-win scenario for Canada. Immigrants arrive ready to work with highly sought-after skills, contribute to the Canadian economy in tax and consumption, and fill — or create — jobs that can stimulate further economic growth. 

While international students make up less than 5 percent of all higher education enrollees in the U.S., they are vastly overrepresented in our most crucial fields. For instance, in electrical engineering, petroleum engineering, and computer science graduate programs, approximately 80 percent of students are foreign-born. When the U.S. fails to provide ample and accessible visa pathways for these students after graduation, they take their valuable skills elsewhere–to our competitors’ benefit, and to our detriment.

This new data spells out in stark numbers what we had already reasonably deduced: that while suffering a skilled labor shortage, the U.S. is in the midst of a brain drain of talented foreign workers, and Canada is reaping the benefits as talent moves elsewhere to put their critical skills into practice. The U.S. must respond promptly by providing ample and viable visa pathways that can protect the educational investments made in these students.

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