North AmericaPolicy Updates

Canada to Reform Startup Visa: Financially Backed Applicants to Get Priority

Speaking during the Collision tech conference in Toronto on Tuesday, Canadian Immigration Minister Sean Fraser announced a range of updates for the country’s wildly popular Startup Visa.

Among a raft of changes that, among other elements, will see professionals from the STEM fields get a dedicated pathway to permanent residence and shorter processing times for the Global Skills Strategy program, Fraser said he was determined to tackle shortcomings of the Canada Startup Visa.

The Startup Visa, he told Bloomberg, had design flaws holding it back, which – coupled with the program’s popularity – had led to a backlog of thousands of applications that would take years to clear.

“When you’re dealing with a tech entrepreneur, if they hear it’s going to take three years to come to our country to do business, they’re going to go somewhere else,” he commented. “We needed to make serious changes to prioritize the [Startup Visa] applications that have the greatest chances for success and still do what we can to be fair to the people who made an application previously and are currently in the pool.”

Exposing startups to tech-talent poachers

To that end, he remarked, Canada will be adopting new features that prioritize the on-hand applications more likely to succeed. One of those features, he pointed out, would be to give preference to Startup applications already financially backed by investment institutions. Another reason to give a file priority would be whether a designated incubator, venture capital firm, or angel investor group had nominated the applicant.

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“We’re also going to put a limit on the number of new candidates that certain designated entities can put forward so we can reduce the pressure on the system and have more reliable timelines going forward.”

The government also plans to allocate more spots to the Canada Startup Visa for 2023, on top of the recent increase in the quota from 1,000 a year to 3,500.

The initial work permit that startup participants apply for now has a validity of just one year and is of a closed nature, which is to say that the work permit is limited to the startup the applicants use to qualify. Fraser said this would henceforth be a three-year, open work permit, which will allow applicants to work also for companies other than their own startup. These terms will apply to the whole entrepreneurial team rather than just the essential team members.

Startup Visa Services’ Slava Apel, who attended the conference and had a chance to speak to Fraser, said he challenged Minister Fraser on some of his proposals:

“I told him I think it’s a mistake to change the work permit from closed to open,” says Apel. “If, for example, the startup brings a Head of IT or a CTO as part of the applicant group, under the old rules, that professional would be locked into working exclusively with the qualifying startup for two or three years until reaching the permanent residency stage. Under the new rules, Amazon or Google can poach that CTO from the startup the second he lands in Canada, to the detriment of that startup’s prospects for succeeding.”