Canada/US Border madness: The economic destruction is real, lasting, and much worse for Canada
As the US opens for business and Canada doesn’t, Canada-based companies will be unable to compete and win for sales, key talent & team development. The damage will reverberate long after the pandemic ends.
I’m an American entrepreneur married to a Canadian. I met her because we’re both avid hockey players — no joke. When I asked her to marry me, she literally made me promise we could move to Ontario “someday” to be closer to her family and get her back home.
As the company I founded in 2013 prepared to raise its first outside capital to build a data analytics and software team to scale up our expert news business, I thought I saw an opportunity to keep my promise. So after doing a great deal of deep-dive homework, we moved to Collingwood, Ontario just before the pandemic started to prepare to establish and grow my company’s tech hub there.
The Ontario move had so far been a roaring success — my theory that smaller, natural amenity-blessed towns could be great attractants for tech talent has proven out (think Bozeman, Montana with more Tim Horton’s) — and the work my Canadian tech team has done has been superb. One of the team members is so fantastic that he’s risen in a single year to become the company’s COO.
And I love so many things about our new home: The food. The hockey. The fishing. The incredible green of the Niagara Escarpment, and the incredibly, otherworldly blue of Georgian Bay. But most of all, the people and what they’re capable of. The kindness. The courtesy. The humor/humour. But also the focus, the skill, and the perseverance on the work side. It’s inspiring.
Under normal circumstances, my best guess is we’d be on track to become Collingwood’s largest pure tech employer by the end of 2022. We’re kind of right in line with the kind of economic development the town says it’s looking to foster , and they’ve been very kind with introductions and invitations.
But now we’re making contingency plans to move everybody that’s willing to come lock, stock and barrel to the U.S.
Don’t want to. Might have to.
A rapidly reopening US business community clearly wants to, and is starting to, do business in person again. Sales. Hiring. Fundraising. Team meetings.
We can be based in Canada if we can go back and forth to compete and win and gather resources freely between the markets and then return safely to Canada.
If we can’t, we need to be based in the market where 95% of our sales are, and where 95% of our venture funding has come from, and where we have substantial historical operations. And that is the US.
Canada’s draconian border regulations, which stand in stark contrast to the US’s, are about to impose a severe competitive handicap on any Canadian company that sells heavily into the U.S., or raises capital in the U.S., or needs frequent management interaction between its U.S. and Canadian teams.
Canada’s got a two week quarantine if you so much as step foot into the US, and if you’re dumb enough to fly into Toronto on your way home, you get an extra, multi-thousand dollar three night “hotel jail” stay tacked on at your company’s expense.
Essential workers? Doing critical business isn’t considered essential by the Canadian government unless you’re in a few very narrow categories. The extremely polite Canadian Customs officers will explain to you, at length, that essential to your company is not what Ottawa means by “essential worker” exceptions.
The problem for Canada is that the U.S. is reopening for business, and quickly. You can feel it and see it and hear it. I’ve spent the last month working at our Colorado headquarters with our editorial and sales teams (and getting vaccinated, because the Moderna vaccine was available to me here on a walk-in basis and nothing at all is yet in Collingwood). And as a US citizen, I can get into the US easily and without quarantine. It’s getting back in where Canada brings the pain.
Since I’ve been here, I’ve been talking and meeting with customers and prospects and investors. And I’m telling you that the desire of businesspeople and entrepreneurs here is to “get back at it” with fervor and gusto.
“Once I got that second shot I started booking flights,” the head of business development for a US investment bank said to me. “God help you if you’re trying to pitch a sell-side assignment over Zoom and your competitor’s doing it across the board table. You’re dead.”
That leaves our company with some stark choices: Our key people can get into the US, but unless we want to be away from our families for about three weeks at a time (a week to do business and two weeks to quarantine, and away from your family unless you want to capture them in your quarantine too), you’re not going to be doing anything in person in the US. Not now, and not in the foreseeable future, according to multiple pronouncements from Canadian federal and provincial governments.
That means lost sales for us. That means withering connections between our Canadian and US teams. That means I can’t sit down with a key executive hire to pitch them on joining us. That means I can’t hold board meetings in person.
That means I can’t compete the way a US-based company can.
It would be one thing if Canada’s restrictions were science-based, or data-anchored, or even connected in some way to reality. But here’s Ontario’s own data about the origins of COVID cases in the province. The purple line at the bottom of the graph — the one that’s flat and near zero — that’s cases caused by travel:
But that’s not stopping the politicians. The Ontario Conservative Party has a new TV ad specifically scapegoating travel as the source of outbreaks…which is simply contradicting reality.
Seems like you could have a Nexus-style vaccination card to avoid quarantine. Seems like you could expand the definition of essential border crossers. Seems like you could end punitive airport hotel jail programs for business travelers. Seems like you could do a lot of things that would allow, at least, the wheels of cross-border commerce to turn.
But nope. The federal and provincial politicians either don’t care about the engines of job creation and economic growth failing, or they think their caution will somehow be matched by the US.
It won’t be. You can see the divergence growing by the day. The US business community is overflowing with optimism and getting back at it, and Canadian politicians are talking about ongoing clampdowns that treat vaccines as if they’re immaterial to the reopening discussions.
And now we have the Ontario provincial premier trying to crack down even harder on border crossing. We can’t compete with the existing travel restrictions against a reopening US — let alone enhanced ones on the Canadian side.
It looks very grim, depressingly grim, to me.
My key people have said they’re up for going if needed, meaning those funds and those jobs and that technology development — and what I think is a brilliant future for our company — will all be flowing and happening in the US instead of in Canada.
The best plans often go awry, but at this point I believe my company has the potential to build a tech/data powerhouse that continues to bring serious venture funding and serious, high-paying job growth into the Ontario economy, and all fueled by Canadian talent.
Isn’t that what Canada wants? Isn’t that what every country’s economic development officials want? Don’t politicians want high-paying, clean jobs in their vital communities?
Last week we actually made a list of 10 small US cities that we think are similar to Collingwood as the start of our contingency planning. Like Collingwood, they’re all great outdoor places, all within a few hours of a major metropolis, all with good access to an international airport. (Well, that last characteristic isn’t like Collingwood lately, since you can’t really call Toronto Pearson an international airport these days.) All ten seem like great places — but we really don’t want to move. Move again, that is. We just got here.
It looks to me like Canada’s governmental officials are using the travel-causes-COVID baloney as a political weapon. The province of Ontario’s own data say it’s not true. But they’ve got Canadians thinking it does, and as a result, it’s pretty damn hard to imagine backtracking far enough to get that border open in the foreseeable future.
That astonishing level of uncertainty is unworkable. I’m not at all happy about the prospect of moving the company back to the US, but the facts are the facts — and the BS is the BS. My Canadian team’s not happy about it, but they’re saying they’ll go, and I’m pretty sure the US (under the Biden Administration, anyway, which is a little sunnier about immigrants and work visas) will be happy to have them.
My Canadian born wife is really not happy about that. But she says she’ll go, too, since it’s critical to our family’s financial future. I’m sure we’d come back some day — but I’m also sure it will be without the company, without the jobs, and without paying any income or capital gains taxes to Ontario and to Canada. Same for all those team members and all they would have paid.
Policies unsupported by facts have real costs, and losing growing companies that could help power Canada’s future economy is going to be one of them. That seems dumb, just to support what is fundamentally a complete fabrication about what’s causing COVID cases here.
I’m sorry if I’m being the ungrateful immigrant, the Ugly American. But we’ve given ourselves a deadline later this year by which we need to know that we can freely do business in both countries with proper vaccinations. If we can’t, we’ve got to go.
With a reopening US, this unending Canadian border shutdown is going to create a bell that will be impossible to un-ring. If the US is open and selling while we’re locked in and losing in Canada, that bell will reverberate negatively through the years for Canadian economic and jobs growth.
