Hello, Canada: Will Microsoft Expansion, North of the Border, Spur CIR?

Of the nearly 60,000 people employed by Microsoft in the United States, over two-thirds live and work in the Puget Sound region of Washington state. [See Fast Facts About Microsoft.] So one can imagine the concerns in the Seattle area, now that Microsoft has announced plans to boost its presence north of the border, in Vancouver, British Columbia. According to Canada’s Globe and Mail, the new Microsoft Canada Excellence Centre in Vancouver “will occupy 143,313 square feet and employ 400 people,” to work on mobile and cloud-based applications. [See Microsoft to Establish Research Base in Vancouver’s Pacific Centre Mall, by Ian Bailey and Shane Dingman, The Globe and Mail, 02.May.2014.] The Globe and Mail reports that Karen Jones, deputy general counsel for Microsoft Canada, “quipped that some in Redmond [Washington] might wonder why Microsoft didn’t just expand its operation in the Seattle-area community, but that Microsoft feels it has to diversify geographically and reach out to hubs that can offer new talent.”

Therein lies the rub: as the Seattle Times editorial board recently pointed out, the U.S. immigration system does not provide the flexibility that Canada’s system does. Although demand for H1B visas is at an all-time high – 172,500 applications for fiscal year 2015 – the supply of H1B visas remains capped at 85,000, including the 20,000 visas available under the master’s cap. [See Editorial: Microsoft’s Vancouver Expansion a Sharp Nudge on Immigration Reform, The Seattle Times, 11.May.2014.]

As the Seattle Times notes, “Microsoft says it must look beyond our borders because America isn’t producing enough highly trained graduates – a report commissioned by the Washington Roundtable says there are 34,000 high-tech jobs in this state waiting to be filled.” What’s a tech company to do? According to the editorial, Microsoft continues to lobby Congress for more H1B visas, and has proposed an H1B fee hike to pay for better STEM education in the United States – but those strategies are part of the company’s long game. By locating a major innovation center in Canada, Microsoft is hedging against the possibility – if not likelihood – that the H1B cap will not be raised any time soon, given the ongoing stalemate on Capitol Hill. The question is: will news of the Vancouver facility be enough to shock Congress into action?

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