Canada as Indian Outsourcing Haven

Amusing stuff from today’s Wall Street Journal:

A number of Indian companies are choosing to establish a base in Canada, which offers proximity to the U.S. but cheaper skilled labor and tax rebates that can help Indian companies limit costs. And Indian executives say U.S. clients appear more at ease with shifting work to Canada than to India, which has become a magnet for political attacks against outsourcing.

But opponents of U.S. companies’ outsourcing practices say that setting up shop in Canada instead of India shouldn’t shield companies from criticism. “We should be just as concerned about jobs moving to Canada as jobs moving to India, especially when the private sector hasn’t created jobs” in the U.S., says Marcus Courtney, president of the Washington Alliance of Technology Workers, a local of the 700,000-member Communications Workers of America union.

Already, Tata Consultancy Services, Satyam Computer Services Ltd., and Wipro have begun operations in Canadian cities that are easy to access from the Northeastern U.S. Tata says its new development center in Mississauga, Ontario, will give it a foothold in case U.S. sentiment against outsourcing prompts more U.S. companies to stop shipping work to India.

Until last year, Satyam had only 10 employees working in Canada, all of whom worked onsite with Canadian clients. Satyam recently inaugurated a development center in a technology park in Mississauga, outside Toronto, where it plans to house 50 developers by the end of September, says Sanjay Tugnait, who set up Satyam’s Toronto office in early 2003. In the next few weeks he plans to visit Satyam clients in the U.S. to sell them on contracting work to Satyam’s Canadian facility.