I worked at a startup that did that. It was a good deal; Canadians got US rates as well, which is something that never happens. But, we got acquired and I imagine we will lose all of our non-US contractors because they are min/max-ing the cost of living or whatever. (A software engineer that lives in Wisconsin is less valuable than one that lives in New York, dontchasee?)

I stayed in New York during the pandemic, so I don't really care. Living 10 minutes from Manhattan will likely never be career-limiting.