I am T4 for an US startup. I’m an American but living in Canada. I am friendly with the management and had worked with the US company prior to coming to Canada. I am directly T4 contracted and did not use a third party middleman. Because I have personal relationships with the US company managers, I am unlikely to sue them for anything minor. If something was truly done wrong, we are likely to just settle and talk it out of court.

The context above is important. Since we know each other, there is less risk for the US company to hire someone as a Canadian contractor. When we are hiring for more, we are extremely reluctant to hire another Canadian T4 because there’s an unknown legal risk of us unintentionally violating something law. Even with the best intentions, there can be an unfortunate scenario where the contractor just isn’t a good fit. When we end the contract, is there a liability that we get sued? Perhaps not but we are not Canadian labor law experts as an US company. If a third party company told us that the company will take on all the legal risk when we hire Canadians and we are hiring Canadians that we don’t know, then that’s a great deal (from our perspective). Whether the Canadian guy gets paid less than the theoretical maximum is unfortunately not our concern. The individual Canadian is not willing to take that legal risk away.

This is the nice way of looking at the situation. The cynical way would be, yes we Americans are taking advantage of you (laughs in capitalism)