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Canada brain drain

Better pay, lower taxes, warmer weather and free-trade agreements lure thousands of bright young Canadians to the United States.

By SUSAN TAYLOR MARTIN Times Senior Correspondent

© St. Petersburg Times, published September 5, 1999


According to the United Nations, Canada is the best place on earth to live. But you couldn't prove it by Suzanne and Tony Hillier.

The Hilliers, who moved from Toronto to St. Petersburg in 1995, certainly don't miss Canada's sky-high taxes. There they'd pay 15 percent sales tax; here it is less than half that.

Nor do they miss the higher cost of living. For about what it cost to rent in Toronto, they've been able to buy a bigger house with an in-ground pool.

Then there's the job. Tony Hillier, a computer systems analyst, is making enough money with IBM in Tampa that they can afford for Suzanne to stay home with their two little boys.

In short, the Hilliers can't think of many reasons they'd return to their mother country. "At this point," he says, "it would have to be a fabulous job offer to compensate for the snow and cold weather."

The Hilliers, both 32 and college graduates, are typical of thousands of bright young Canadians who have moved to the United States in the past 10 years. The reasons are many -- better pay, lower taxes, warmer weather -- but the result is a "brain drain" of alarming proportions, many Canadian business and political leaders say.

Thanks to free-trade agreements that make it easy for skilled labor to cross national borders, doctors, nurses, engineers and other professionals are leaving Canada in such numbers it could "have significant economic repercussions," warns a new Canadian report titled, "Are We Losing Our Minds?"

In 1986, the Conference Board of Canada found 3 percent of the country's natural scientists emigrated to the United States; by 1996 that had increased to 11 percent. The percentage of engineers leaving rose almost threefold and the percentage of doctors heading south shot up almost fivefold.

"Of eight Canadian babies who were born around the same time I was and who went on to win Nobel Prizes, seven of them did their prize-winning work in the U.S.," says Richard Taylor, an Alberta-born physicist and Nobel Laureate at California's Stanford University.

Canadian Prime Minister Jean Chretien has pooh-poohed reports of a brain drain, saying it is a myth perpetrated by big business to force the government into lowering taxes. While conceding that taxes are higher in Canada, Chretien insists that few Canadians want to live in the United States because there is so much crime "you cannot go into a park at night."

The debate has raged all summer, producing dozens of front-page stories and blizzards of conflicting data on whether Canada is losing its best and brightest to the booming U.S. economy.

One thing is certain: Emigration is nothing new. Over the years there has been considerable movement between the two countries, hardly surprising since they share a common language and have close cultural and historical ties.

Between 1850 and 1920 almost 2-million Canadians moved south to work in U.S. factories and mills. The flow reversed during the Vietnam War when Canada's economy was strong and thousands of young Americans fled north to avoid the draft.

Throughout this century, changes in immigration policies have affected the numbers of people seeking opportunities on the other side of the border. But the most significant developments were the 1988 Free Trade Agreement between Canada and the United States and the 1993 North American Free Trade Agreement, which brought Mexico into the fold.

The pacts, which let highly skilled workers move more easily from one country to another, came at time when the U.S. economy was entering a period of explosive growth. The result? For every American moving north, six Canadians are moving south.

Among the transplants are Suzanne and Tony Hillier.

Like many younger Canadians who have settled in Florida, they already had ties to the state. Suzanne's parents had lived in St. Petersburg since 1980 and she graduated from Dixie Hollins High School before going back to Newfoundland to college. There she met Tony, who realized that job opportunities would be sparse in his computer field.

"We always joke that the best export from Newfoundland was university grads," says Suzanne, who has a math and science degree. "It's about the poorest province in Canada, with the cod stocks drying up."

Tony had no problem finding work in Nova Scotia, then in Toronto. But the city, swollen with Asian immigrants and job-seekers from other parts of Canada, was growing so fast that the Hilliers had to live 25 minutes away by train in a rental house.

"For young people starting out, it's a bad place to be," Tony says. "You can find a job for $30,000, $35,000, but the housing is what will kill you."

With a child on the way, the Hilliers decided they wanted to be close to one set of grandparents. Florida won out of over Newfoundland, and Tony quickly landed several job offers in the Tampa Bay area. He accepted one with a consulting firm and was able to get a TN visa, which permits workers in a wide range of skilled occupations to enter the United States as long as they have proof of employment. The one-year visa, a product of NAFTA, can be renewed every year thereafter.

Tony has since taken a job with IBM, where he is making enough that he and Suzanne were able to buy a home with a pool near her parents. They estimate that their disposable income is as much as 25 percent higher than it would be in Canada -- enough that Suzanne won't have to work until their sons, 4 and 2, are in school.

"This would just have been a dream if we had stayed in Canada," Suzanne says. "We definitely would have had to have been a two-income household."

Both Hilliers want to get their green cards, which will make them legal permanent residents of the United States, and they may eventually apply for full citizenship.

The Hilliers and others acknowledge that Canada has its strong points -- universal health care, an excellent public education system, generous welfare and old-age benefits. But the cost of providing all that has saddled Canadians with a tax burden that is among the heaviest in the world, and 20 percent higher than that in the United States.

The crushing taxes, one study found, are among the reasons Canada ranks near the bottom of 47 developed countries in its ability to retain well-educated people.

"Everything is taxed, taxed, taxed," says Wallace Weylie, a Canadian-born immigration lawyer who lives in Indian Shores and has helped 250 to 300 Canadian professionals move to the States.

"Taxation in Canada has reached the point that Canadians have very little discretionary income. Whatever he has left, he needs for basics. The American, on the other hand, has considerable discretionary income, so Americans can afford to be risk-takers whereas the Canadian has a problem with that. And that gets into the psychology of the businessman coming to the United States."

Andrew Strong, a 37-year-old home builder from Ontario, says he never would have survived financially had he stayed in Canada.

"The government just killed it," he says. "Impact fees were up to $15,000, a lot compared to about $4,800 down here. It was almost impossible to be a builder unless you're a big corporation with deep pockets."

In 1992, Strong moved to Pinellas County where he is developing Virginia Crossing, a 121-home subdivision in Dunedin tailored to the over-55 set. And he is embarking on a $20-million condominium project on the Gulf of Mexico.

"It took two years to get approval, but it would have taken four years in Canada. There are so many fingers in the pot, so many departments. I couldn't do this magnitude of business up there."

Is there anything that Strong, who is married to an American, misses about Canada?

"Nope," he says without a second's hesitation. "I've got the hockey team here -- I can get tickets to see the Maple Leafs easier here than I could in Toronto. I've got baseball, so I can see the Toronto Blue Jays. What else could you ask for?"

For Canadians who are in the United States on temporary visas, there are some drawbacks to non-permanent status. They pay into the Social Security system but don't derive any benefits unless they work here at least 21/2 years. They aren't entitled to a homestead exemption even if they are buying a house or condo that is their only residence. If they lose their job, they must quickly find another one or return to Canada.

Keith Thompson, who moved from Toronto to Clearwater Beach three months ago, also warns his countryfolk against succumbing to the grass-is-greener-on-the-other-side-of-the-border syndrome.

"If I had advice to offer Canadians considering moving, it's to make sure you base your decisions on factors other than monetary ones or the weather," he says. "Nothing can replace family or background or roots."

Thompson, 47 and divorced, has worked for U.S. companies most of his career and thought about emigrating twice before. When his last job proved to involve too much travel, he contacted a former colleague who had joined Pivotpoint, a Boston software company. But Thompson ruled out Boston -- "it's as expensive as Toronto" -- and became director of technology services for the company's Rocky Point branch.

Now Thompson has an office with a stunning view of Tampa Bay and an easy commute to the beach, where he rents an apartment and belongs to a tennis club. His take-home pay is "much higher" than it was in Canada and cheap air fares between Toronto and the bay area will make it possible for friends and family to visit often.

"There was a strong temptation to make the move to Florida for lifestyle reasons," Thompson says, "but I managed to combine both -- the career move is excellent as well."

Yet even under the best of circumstances, Canadian emigres can have occasional pangs of homesickness. Thompson's came earlier this summer when he went to a rock concert at the Ice Palace in Tampa.

"I'd be in deep denial if I didn't admit you miss your roots," he says. "I remembered all the concerts in Canada where I'd bump into several people I knew. I had a feeling of tremendous loneliness -- I thought, shoot, I'm in this all alone."


-- Information from the National Post of Toronto was used in this report.

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