I came to the valley in a forced relocation some time ago. In that case, we also lost >50% of the team, including engineering. (I stayed until my green card came through then jumped ship.) It was clear, though, that the VPs and up didn't care, because they had their heart set on being Silicon Valley Executives, and damned if they were going to let the rank-and-file get in their way. They were so caught up in the glory of VC and speeding down 280 that they were not interested in the business argument. And as for the departing staff? "It's Silicon Valley, we can easily replace staff"
Here I get a sense of the same story. There is no way it's difficult to hire talent in Toronto, which consistently ranks as one of the most desirable cities in the world. A simple Google search also will produce hundreds, if not thousands, of articles about how the Canadian immigration system is a breeze compared to the US's. Thus I believe this executive team is the same as my own - determined to be 'San Francisco startup CEO', and damned the cost.
By the way, my company's technology fell behind its competitors' (perhaps because of the loss of talent?) and was sold off to a conglomerate ~5 years later, at the same valuation as it had pre-relocation. The CEO had departed the company by then.