Canada losing top talent as workers head to the U.S.
A new TD Economics report warns Canada is quietly losing highly skilled workers, entrepreneurs and STEM graduates to the United States through work visas, tech recruitment and stronger economic opportunities.
BNN Bloomberg spoke with Francis Fong, managing director at TD Economics, about how Canada’s tax structure, productivity challenges and lack of business scale are contributing to the country’s ongoing talent retention problem.
ROGER: Okay, how does this compare to the ’90s when we saw a brain drain then? Is it larger? Different sectors?
FRANCIS: No, I think, Roger, you pointed to it correctly. This is not an issue that is brand new for Canada. It’s one that we’ve been facing for quite some time. The reason we wrote this report, however, is to highlight the fact that we’re sort of in this moment in time right now, with our relationship with the U.S. deteriorating and us trying to diversify our trading partners, to highlight the fact that we are still not really all that competitive. Our productivity growth is quite low and has been for a few years now. So, banging this drum about wanting to raise this issue around competitiveness, that was the goal of this.
And in the report, we highlight the fact that our personal tax rates — relatively high-income earners face extremely high marginal tax rates — in combination with a business tax architecture that can often drive entrepreneurs and business owners to pursue tax-planning initiatives to try and lower that rate. All that leads to an inefficient allocation of resources, low productivity growth and the risk that we’re obviously highlighting here: the risk that our high-skilled talent leaves the country for better opportunities offshore.