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TN visa doesn’t require much sponsorship they just need to give you a letter…
I feel for you. I had the same thing happen to me. Was a contractor with them for 8 months, had my TN status under the recruiting agency as I worked for the employer client. The employer client wanted me to stay so I got offered an FTE role on a different team. I negotiated the salary and there was a fully executed contract, while they work out the TN request and sort out the details when their “immigration team”, only to have them come back and say they have to rescind the offer because they don’t do visa sponsorship. Which I think is a lie because many of the employees are from elsewhere and on H1Bs. TN is less complex, doesn’t require much on their part than to write a letter (my offer letter was robust) stating that they’re a aware of my Canadian citizenship and include the request of TN status processing, etc. But they didn’t want to do it.
Usually I provide the new employer with a sample letter so they have context, I inform them that TN approval/denial is same day (as I drive to a border) and it’s a small fee, which I cover. I make it simple for them because once they hear visa sponsorship they auto shut down and may find it difficult to make a decision. But sadly, it wasn’t successful with my last attempt.