TECHNOLOGY
national average of 27.4 per cent. The sector also tracks above the general population in terms of compensation. In 2013, ICT professionals earned, on average, CAD69,876 – 48 per cent more than the national average. Within the sector, the highest-paid employees worked in software and computer services, where average earnings were CAD75,425. If further proof were needed that it’s an industry on the up, the tech
sector is expected to outstrip the energy industry in terms of wage growth in 2016, making it the industry with the largest growth. A recent survey by consulting firm Mercer shows that the energy sector – long the leader in terms of compensation increases – expects to see wages grow by 2.9 per cent, with the tech industry pulling ahead at 3 per cent.
Key locations Geographically, the tech sector is concentrated in four main areas. Vancouver and Toronto dominate, while Montreal has a sizeable tech market mainly focused on videogames and biotech. Waterloo also has a cluster, anchored by Blackberry, and west of Ottawa there’s Kanada, which has a 20-year-plus tech history dominated by hardware. CBRE, one of Canada’s largest real-estate firms, recently put both
Toronto and Vancouver on its Tech Thirty list of the biggest North American cities for technology. It pegged Vancouver as having 34,000 tech workers, while Toronto had 98,000. Despite Toronto’s size, Ross Moore, director at CBRE, told Re:locate
that Vancouver had the fastest-growing tech workforce in the country. “Vancouver is tied very much to what’s going on in Silicon Valley. It’s in the same time zone, and Seattle, where you have Microsoft, is only a two-and-a-half-hour drive away, so there are great synergies there. “And, with the exchange rate, tech workers, by and large, are
significantly cheaper here when you compare against Seattle or San Francisco.” Sony, Microsoft and Amazon have set up in Vancouver recently,
while Electronic Arts, Hootsuite and Industrial Light & Magic all have bases in the city. Over in Toronto, companies including Google, Apple, Cisco,
Facebook and LinkedIn all have bases. “Part of it’s to service the Canadian marketplace, but it’s also considerably cheaper to operate a software developer department here than in the US,” says Ross Moore.
Sourcing talent The exchange rate is a significant factor for companies setting up in Canada, with the Canadian dollar having this year hit an 11-year low compared with the US dollar. But it’s not just about the financials, according to Ross Moore. “There’s great talent. That’s what it’s all about. There’s good
talent, it’s affordable, so I think it makes a lot of sense to locate here.” It’s not just domestic talent, though. Setting up in Canada is often
appealing to firms from a relocation perspective, but bringing talent in can be tricky. Many hires will enter the States using the H1B visa route. “It’s
a very clunky people programme,” Danielle Lovell, co-founder of mobility firm Blankslate Partners, told Re:locate. The visa is for skilled workers, but it is over-subscribed by multiple
thousands of applicants, has a limited window for applying, and takes months to come through, even if the applicant is successful. “Getting someone a visa in Canada is not that onerous,” says Ms
Lovell. “Then, once they’ve worked in Canada for 12 months or more, they likely qualify for an L1A or L1B, which is an inter-company transfer for specialised knowledge or a senior manager. Then they can transfer to the US with relative ease.” Workers in the games and visual effects subsectors can benefit
from a variation on the Temporary Foreign Worker Program that negates the need for firms to advertise positions within the country in
the provinces of British Columbia and Ontario (which encompass the clusters in Vancouver, Toronto and Waterloo) before looking abroad. Hootsuite and Shopify are examples of Canadian companies that have
ballooned in the last five years to become global companies. “So that’s had a huge impact on the market here, because some of those employees have equity and some of them have stock options,” says Danielle Lovell. These employees suddenly gain the option to invest in start-ups or form their own, injecting new blood and fresh capital into the sector. An older example of this phenomenon is the so-called ‘PayPal
mafia’, a group of former employees of the company who benefited when it went public and went on to fund many companies from the next round of start-ups. While a start-up culture has grown up around Canada’s tech sector,
there are gaps in the talent pool. “At the more junior to intermediate level, there tends to be talent
in Vancouver or in Canada,” says Ms Lovell. “What we find is that it’s the more senior levels – the directors, the team leads – where we look outside Canada. Though the Canadian technology and gaming sectors have been around for years, they’ve really had a growth spurt in the last five to ten years, and so the talent hasn’t quite caught up, because people will often go to the US first.” Experienced developers, especially those conversant with Ruby on
Rails, various permutations of Javascript, and full stack development, are particularly in demand. Typically, when firms need to hunt for talent abroad, they will
look to the US first, but other countries, such as New Zealand and the UK, can also be big sources of hires, Ms Lovell says.
Challenges ahead Despite all the reasons for positivity, there are challenges facing Canada’s tech sector. On the talent front, Danielle Lovell notes, “It’s hard to compete with the money in Silicon Valley. If someone’s considering an offer from San Francisco and one from Vancouver, probably the one in San Francisco will pay more. If someone’s looking only at cash, that can be a challenge.” “I think that real estate, as time goes on, is becoming a bigger
and bigger issue,” Ross Moore told Re:locate. It’s particularly an issue in Vancouver, where rents are approaching those of San Francisco. Many people also bemoan the lack of venture capital funding
available in Canada compared with its neighbour south of the border, though it’s on the rise. Research firm Factset said that, by November 2015, the amount
raised in venture capital investment rounds by Canada’s tech companies had already hit a record high of USD768 million, topping 2014’s USD735 million and soaring past the yearly average of USD512 million over the last decade. That’s a drop in the ocean compared with the US, which raised USD13.4 billion in the first quarter of 2015 alone, but it’s certainly trending well. While the Canadian technology sector has a fair way to go before
it surpasses energy or becomes a true challenger to Silicon Valley, it certainly seems to be pointing in the right direction.
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