The Great Promise of Canadian Tech from Coast to Coast
Canada has never been known for its technology industry, always in the shadow of its southern neighbour that houses Silicon Valley itself. Only one Canadian city made the cut for CBRE’s 2019 list of the ten North American cities with the most tech talent. Fortunately, times are changing, as local tech hubs and companies pave the way for Canada to become a leading player in the international tech scene.
In the West Coast, Vancouver ranked first in North America for high-tech software job growth with an impressive rate of 29.2%. This led to the creation of approximately 200 new jobs, which accounted for nearly 70% of new office jobs in 2018 and 2019. Notably, Vancouver has captured the attention of multinational companies looking to bolster a stronger presence in Canada. Microsoft recently announced plans to increase their Vancouver workforce by over 40% in 2021 by adding at least 500 technical positions, raising their employee count to 1,700 in the city and over 3,700 across the country. Kevin Peesker, President of Microsoft Canada, voiced the company’s commitment to helping Canada emerge from the pandemic stronger than ever. B.C. Jobs Minister Ravi Kahlon similarly noted that “[the news] further establishes the Lower Mainland as a growing hub for technology and innovation.”
By the end of the year, Shopify will have taken over four floors at Vancouver’s Bentall Centre, creating 1,000 new jobs in the struggling downtown core. Similarly, Seattle-based Amazon is set to become Vancouver’s largest corporate tenant as the e-commerce giant moves into their proposed 1.1 million square feet of leased downtown office space and hires thousands more employees. In 2020, Mastercard committed $510M to build a global cybersecurity hub in Vancouver, with $49M in support from the Government of Canada. American companies are attracted by the salary cost advantage, as the average tech worker is paid $83,200 CAD in Vancouver compared to $130,000 USD in Seattle.
Similar trends are taking shape in the Canadian Prairies. As the heart of Canada’s oil and gas industry, Alberta was hit hard by the pandemic-induced recession, but growth in the technology sector has been a shining light. Infosys, a global IT services and consulting firm, is opening an office in Calgary to expand its client base across Western Canada. Over the next three years, Infosys alone will bring 500 new jobs to the city. President Ravi Kumar cites the low cost of living, large talent pool, and high quality of living among the motives behind choosing Calgary for the new office, which he hopes will be “the beacon for building a vibrant tech and digital services ecosystem.” In late 2020, Calgary-based fintech firm Neo Financial raised $50 million in Series A funding from Valar Ventures in New York to build user-friendly banking technology and products. Calgary Economic Development expects that tech hiring will double the pace of the rest of Alberta’s economy with both Calgary and Edmonton setting records for tech investment in 2020. The Minister of Jobs, Economy and Innovation reports that Alberta has also invested $175 million in venture capital for tech startups, highlighting the oil-dependent province’s aspiration to build a strong technology sector.
As Canada’s business center, the Greater Toronto Area (GTA) ranked 3rd in CBRE’s aforementioned report and accounts for 26% of Canada’s total tech talent and employment. With 18 higher-education institutions in the region, over 25,000 students graduate from STEM degree programs every year. To employ this large talent pool, a plethora of leading tech companies like Google, Shopify, Microsoft and Oracle have set up Toronto offices. In 2020, Google announced plans to open a second Toronto office as part of its Canadian expansion plan to triple its national workforce. The 18-storey tower is located at 65 King Street, just east of Toronto’s financial core, and will include private terraces spanning eight floors with breathtaking views of the city. Toronto has also experienced staggering growth in the number of startups and venture capitalists in recent years. Several billion dollars of venture capital investments have been infused into the sector, and the local government has also increased funding and procurement options for startups to drive more high-tech innovation.
Waterloo is a standout region in the GTA with 20,400 tech jobs that represent 8% of all occupations. This statistic ranks Waterloo slightly behind Toronto but ahead of Montréal despite the stark difference in population. The driving force behind this impressive achievement is the University of Waterloo, which has earned a stellar reputation for its world-class STEM programs. The Wall Street Journal noted that “[Waterloo] graduates are the second-most-frequently hired in Silicon Valley.” Recognizing Waterloo’s potential, Google decided to expand their GTA office with a brand new tower in Kitchener-Waterloo. The site lead for this location confirmed that Google plans to hire an additional 1,500 employees for that tower alone, bringing the total staff number to 2,500. As remote work becomes the new normal, Waterloo as a “secondary city” is experiencing exceptional momentum given its benefit of incredibly low living costs compared to affluent American tech hubs, such as California and New York. The Toronto-Waterloo corridor now supports over 5,200 startups and 15,000 tech companies, making it the second-largest technology cluster in all of North America.
Canada’s capital city Ottawa is home to Shopify, a multinational e-commerce company. According to the Royal Bank of Canada, Shopify recently earned the title of Canada’s most valuable company with a net worth of over $140 billion. Powering over a million businesses worldwide, companies on Shopify contributed an astounding $319 billion in global economic activity from 2016 to 2019. Beyond e-commerce, Ottawa has also fostered a thriving cybersecurity cluster built by researchers, innovators and companies contributing leading-edge, global cyber solutions. The city also boasts a celebrated history of innovations in telecommunications, advanced networks and internet of things (IoT).
Last but not least is Montréal, Canada’s second largest city located close to the tech hubs of Toronto and New York. Traditionally known for its aerospace, events, and fashion industries, Montréal has also witnessed incredible technology advancements, particularly in telehealth and fintech. Headquartered in Montréal, Dialogue Technologies is a leading global telemedicine company that acquired $43 million in Series B+ funding in July 2020. Backed by some of the most powerful investors in Canada and Europe, Dialogue employs nearly 500 Canadians in Montréal and Toronto to build the future of digital healthcare. Montréal also boasts the most developed fintech ecosystem in the country with numerous organizations dedicated to supporting fintech startups, such as Montréal FinTech Station and Fintech Cadence. Companies are choosing Montréal given its impressive IT sector, huge pool of university graduates, and 21% cost advantage over other North American metropolitan areas. Alan Vesprini, Managing Director at Morgan Stanley, stated that “the more tech businesses there are in Montréal, the larger the talent pool, [which] attracts even more people who contribute to the available expertise.” Since its establishment in 2008, the Montréal Technology Centre has become one of Morgan Stanley’s largest tech sites with over 1,200 technologists.
With Vancouver and Toronto welcoming more Big Tech firms, Calgary shedding its oil and gas reputation, and Montréal leading the telehealth revolution, Canada’s tech future is shining bright in the digital world. It is time for Canadian tech to step out of America’s shadow and showcase the innovative activity and potential of the True North.