Canada's biggest city is changing quickly, with almost 400 proposed towers and a booming tech sector. The two, as it turns out, are not mutually exclusive...
Canada may be cold six months of the year — but it may end up being a hot place for international tech talent.
Various factors are now driving global workers to head north for jobs, in everything from product design to e-commerce to artificial intelligence. According to Vikram Rangnekar, founder of MOV North — a website helping tech all-stars head to Canada — it’s a trend that shows no sign of slowing.
“Canada has a great brand,” he says. “What was missing was the tech brand: Is Canada a place to go to for cutting-edge work in tech? And I think that piece has kind of fallen into place now.”
Let’s take a closer look at why international tech talent is coming to Canada in greater numbers.
The Impact of Canada’s Global Talent Stream
It may be impolite to discuss politics, but it is difficult to avoid when it comes to Canada’s tech industry. Following the Trump administration’s travel ban, immigration to the U.S. has dropped from various blacklisted countries. The president’s proposal to crack down on the H-1B visa program, which allows 85,000 foreign workers in “specialty occupations,” has also created a climate of uncertainty in Silicon Valley.
“It doesn’t come across as positive to people who want to move there,” Rangnekar says.
Canada is benefiting from this perception, and it is very much by design. The federal government has tweaked its immigration process, giving applicants for permanent residence extra points for tech skills. The spouses of temporary visa holders are now also allowed to work. In 2017, the government launched the Global Talent Stream, a 24-month pilot, which helps Canadian tech companies recruit and retain skilled talent from around the world.
The program fast-tracks the immigration and work visa processes, allowing companies to refer potential job candidates and hire foreign workers for occupations that do not have insufficient Canadian workers. Thus far, it looks like the program is working. According to the Financial Post, companies have used it to hire for 3,100 new positions, with more than 2,000 companies applying to hire Talent Stream workers.
These efforts have boosted recruitment from India, which is the source of the largest group of immigrant tech workers. According to the Economist, Indians received almost half of the new temporary visas from the Golden Talent Stream. The number of Indians looking for permanent residency also dramatically increased between 2016 and 2017— by 83% for those in a government skills program, 122 percent for those chosen to fill specific vacancies, and by 538 percent for those entering solely on work experience.
International Companies are Investing
While the “friendliness” of the US may be in question, Canada continues to lose thousands of highly educated, skilled people to its larger neighbor every year. In fact, the country’s emigration rate to the U.S. has averaged about 0.7 percent of the population since the mid-1990s.
Some of the major reasons behind this “brain drain” have been the higher salaries in the US, and the perceived opportunities for career advancement for those who land a job at an American tech giant. Curiously, these two factors may end up helping the growth of Canada’s tech industry.
There has been an explosive growth in Canada when it comes to outside tech giants setting up shop — or expanding their presence — in the northern market. For an example, consider one breathless month in Toronto this past year, when:
- Microsoft announced they would invest $570 million into a new, 140,000-square feet headquarters on Bay Street. The company also intends to grow local staff by more than 500 full-time employees, with an additional 500 co-ops and internship positions by 2022.
- Two days later, Uber announced a $200 million investment, which would expand self-driving lab in Toronto, build an engineering lab, and increase their headcount in the city to 500.
- That same day, Intel announced plans to open a graphics chip engineering lab.
- A week later, Pinterest announced it would be opening its first-ever Canadian office in downtown Toronto.
- That same week, Instacart revealed it would be expanding its Canadian presence with a new Toronto office and 200 additional employees.
This was not a freak occurrence for Toronto. The city added 82,100 tech jobs between 2012 and 2017 – an increase of 50 percent – which is more than any other city in North America. The city also made the top 10 on a ranking of global cities “that have the future-proofing capacity for longer-term success,” and was deemed one of the world’s leading technology innovation hubs by KPMG’s Global Innovation Report.
But while Toronto got the headlines, tech industry investment in Canada was widespread in 2018. In Vancouver, for example, Amazon announced plans to expand its Tech Hub, creating 3,000 jobs in e-commerce, cloud computing, and machine learning. Facebook, meanwhile, will be opening a new office in the city, taking over 36,000 square feet in the Waterfront Centre.
Realistically, much of this was down to the cost of operations in Canada. According to the CBRE Group, a 500-employee firm renting a 75,000 square-foot space in Toronto would have estimated one-year operating costs of $30,224,259, with Vancouver and Montreal even cheaper. The Bay Area, by comparison, had a total estimated cost of $59,124,612.
Regardless of why they’re investing in Canada, the presence of tech giants should increase the number of job opportunities, as well as the competition for such roles. This, we hope, will also help increase salaries over time, and the need for greater digital skills.
The Local Scene is Establishing Itself
Coupled with (and boosted by) outside investment, there is a sense that the Canadian tech sector is starting to flex its muscles. Rangnekar, for example, cites the success of homegrown e-commerce platform Shopify, an Ottawa-based company with thousands of employees, more than $670 million in revenue, and plans for expansion into film and television.
“People have heard of Shopify everywhere in the world,” he says.
Shopify, of course, is not alone: Hootsuite, FreshBooks, Wealthsimple, Wattpad, and Montreal’s Element AI are just a few of the Canadian tech companies making waves on a global level.
To support these success stories, the Canadian government increased direct funding to industry for innovation, with $434 million in 2018-19, for a total increase of $2.5 billion over five years. The government also announced that the British Columbia-led Digital Technology Supercluster would receive funding for its Innovation Supercluster Initiative. The Supercluster is expected to create 50,000 new jobs and pump $15 billion in GDP into B.C.’s economy over the next decade.