Microsoft’s H-1B Green Card Freeze Puts Canada’s Promise to the Test

A few hours before Satya Nadella collected a National Medal of Technology and Innovation from Donald Trump on Oct. 8, Vice President JD Vance stood at a White House podium and said Microsoft was being cut off from the paperwork that turns its foreign workers into permanent U.S. residents.

“There has been no company in the United States, unfortunately, that has used this system more than Microsoft,” Vance said, according to the Associated Press. He alleged that Microsoft laid off 6,000 American workers in the past year while obtaining 6,300 H-1B visas and almost 3,000 green cards, and called the foreign hires “foreign indentured servants.”

Microsoft was not the only name. The U.S. Department of Labor suspended Adobe and six IT services firms, Cognizant, Infosys, Tata, Wipro, HCL and Capgemini, from the same Permanent Labor Certification program, known as PERM, SHRM reported. That is eight companies, several of them among the biggest sponsors of skilled foreign workers in the United States.

For Canada, the interesting part comes after the politics. Thousands of people working at those firms on H-1B visas just lost, for now, the employer-sponsored route to a green card. Ottawa has been promising to court exactly those people for almost a year.

What the Microsoft PERM suspension blocks

PERM is the first step for most employer-sponsored green cards. Before a company can petition for a foreign worker’s permanent residence, the Labor Department has to certify that it tested the U.S. job market and found no qualified American for the role. Vance’s complaint is that the test is theatre. “They’ll put an advertisement in a small-town newspaper,” he said, as broadcast by PBS NewsHour.

The suspension is indefinite and stays in place until the administration considers its concerns addressed, according to SHRM. The affected companies cannot file new PERM applications, and existing ones will not be processed further. H-1B visas and green cards that were already approved are not cancelled.

Early accounts on Oct. 8 disagreed about pending cases. The AP story did not address them, and VisaVerge first described a block on new filings before updating its piece to say the department “will not accept new or process pending PERM applications.” Later reports from SHRM, the immigration law firm WR Immigration and KOMO News all said pending applications are frozen too.

WR Immigration points to a federal regulation, 20 C.F.R. 656.31(b), that lets the department halt PERM processing while it investigates possible fraud. Under that rule an initial suspension can run up to 180 days and be extended. The firm also notes that the department’s written description of which entities and applications are covered was still to come. We could not find a published Labor Department notice for the Oct. 8 action.

There is precedent. On May 12 the department suspended PERM processing for software firm Cloudera for 180 days, with Acting Secretary Keith Sonderling saying the move “reflects this Administration’s commitment to holding bad actors accountable.” In September, the Labor Department’s inspector general announced on X that Cognizant’s PERM applications had been suspended. Cognizant is on the Oct. 8 list again.

Microsoft’s H-1B numbers, and Vance’s

Microsoft disputes the framing. The company told the AP that 80% of its roughly 6,000 H-1B filings in the last fiscal year were to extend or change the status of people it already employed.

“These were not to hire new people.” (Microsoft, in a statement reported by the AP)

The remaining new-hire filings covered people already in the U.S. and equalled about 1% of Microsoft’s U.S. workforce, the company said. “We pay our H-1B employees the same as any other employees doing comparable work,” a spokesperson told SHRM. Microsoft ranks fifth among U.S. H-1B employers, behind first-place Amazon, according to the AP.

Vance’s figures came from U.S. Citizenship and Immigration Services data, SHRM reported: 6,258 H-1B approvals for Microsoft in the last fiscal year and 3,157 PERM cases filed with the Labor Department. Our read: his claim that Microsoft replaced each laid-off worker with one and a half foreign workers compares layoffs against approvals that, by Microsoft’s account, were mostly renewals for staff who were already there. Nobody outside the government has yet seen the evidence behind the fraud allegation.

Reaction split along familiar lines. Doug Rand, a senior adviser at USCIS under President Biden, called the move “incoherent” to the AP, since blocking green cards keeps H-1B workers tied to their employers, the dependence Vance says he dislikes. Ron Hira, a Howard University professor and longtime H-1B critic, called it “very significant.”

The suspension also lands on a pile. A federal judge struck down the administration’s US$100,000 H-1B fee in June, and in August the administration proposed a new US$103,265 fee that is not yet final, the AP reported. On Oct. 7 the Department of Homeland Security proposed a US$70,000 charge (about CA$97,300) for each student working under Optional Practical Training, payable by schools.

Canada’s H-1B pitch, three years on

Canada has run this play before. On July 16, 2023, Immigration, Refugees and Citizenship Canada opened an open work permit for H-1B holders under its Tech Talent Strategy. It hit its 10,000-application cap on July 17. By Sept. 30 that year IRCC had received about 14,200 applications including family members and approved about 6,100, according to a briefing note prepared for a House of Commons committee. Successful applicants got permits of up to three years.

The second act has been slower. Budget 2025, tabled Nov. 4, 2025, committed to an accelerated pathway for H-1B holders. IRCC’s consultation on 2027 Express Entry categories, which ran from Aug. 4 to Sept. 1, 2026, still described that pathway as a Budget commitment, and asked whether a new draw category should target U.S. H-1B holders. Moving2Canada reported in August that no launch date had been announced. We found no federal statement responding to the Microsoft suspension as of Oct. 8, and any new Canadian measure aimed at these workers is unconfirmed.

Microsoft itself already has a Canadian landing pad. Its Vancouver development workforce numbers more than 2,500 people, according to a Microsoft blog post. The site opened in Richmond, B.C., in 2007, when Microsoft Canada’s president said the company was “recruiting, as many companies are, for the best talent in the world,” CTV News reported at the time.

For more on how Canadian tech is weighing immigration risk, see our analysis of what the PQ win means for Montreal’s AI sector, and our look at who sits on Carney’s new AI council.

What it means for H-1B workers looking north

• If your green card is already approved, nothing in the Oct. 8 action cancels it, according to SHRM’s account of the suspension.
• If your PERM case is pending at one of the eight companies, expect it to sit. If the 180-day initial period WR Immigration describes applies, the first decision point falls around April 6, 2027, and an extension is possible.
• If you are weighing Canada, the 2023 H-1B permit is closed, and the promised accelerated pathway has no public start date. Watch IRCC’s 2027 Express Entry category announcement. IRCC announced the 2025 and 2026 categories in late February, Moving2Canada noted.
• If you hire in Toronto or Vancouver, our read is that the candidates most exposed are the 80% Microsoft says it was renewing: people already doing the job, who now have no clear path to stay.

In 2023 Canada’s 10,000 H-1B slots were gone in roughly two days. Budget 2025 promised a faster route on Nov. 4, 2025. Eleven months later, Microsoft’s U.S. green card queue has stopped moving, and Ottawa’s has not started.