Well. I’ve had a lot of ideas in my adult life that I felt passionate about, but doing business here is remarkably unrewarding. I can do what I enjoy and I’m good at with an American company for 2-3x what I’d realistically earn here working at least as hard on my own business.
I’ve consulted for several Canadian tech companies and their finances often seemed remarkably poor. I know some are doing well; I’m more so speaking about “regular people” businesses. Small private companies with staff around 10-20 people.
They work really, really hard for their incomes and the rewards really aren’t what you’d expect. This seems true outside of tech as well.
My wife works for the federal government on the other hand. She earns much less than I do, yet still dramatically higher than the average for our city and the rest of the country. She also has generous time off, training, an excellent union, interesting work, etc. Why in the world would she start a business? She actually could, too. She’s an awesome hydrographer with cutting-edge skills and knowledge. But she’d have to work herself to the bone if she went private and she’d have to work in wildly different and less comfortable contexts. And for what? 1.5x the income? 2x? After that’s chewed up by taxes, she has traded her family life for a career that barely pays more when you do the quantitative and qualitative maths.
Yet I think this is a huge problem. It isn’t really wise to work hard and innovate here, and I think it’s actually harming our workforce and economy quite seriously. Look to many countries and you can quickly point at many past and recent innovations and core competencies. But what do you see when you look at Canada? There’s certainly less, and seemingly less all the time. Our small population is a huge disadvantage here, but we have such immense opportunity for innovation.
I do think we innovate in extractive industries. We do a lot of environmental research around our primary industries, and that’s very valuable. Economically though, I don’t know… We aren’t much of a land of opportunity these days, and it doesn’t seem like much is happening to reverse this trend.
> We have no atmosphere of innovation because our salaries are garbage compared to the US. This is the problem, every single time. Most of my Canadian graduate friends work for US companies, some remotely. We literally do not have economic reasons to stay here. No amount of lip service will ever transform 100k into 300k.
Being a Canadian who moved to the US because the salaries were far higher than what I could find at home, I agree with the sentiment.
However, I think it's a bit more complex than: low salaries lead to no atmosphere of innovation. It seems to be a bit of a cycle. We have less competition than the mega tech centers in the US which leads to lower salaries, which leads to brain drain, which again results in less competition, and this is a cycle that continues. To break out of it, we need either a.) more competitive salaries, or b.) more companies to form, or move up to Canada. I can't see a.) happening unless there's a motivation to do so (why pay more than you have to?).
It seems to me, this is an effort to attract large companies such as Google and Amazon (perhaps for HQ2) with the hopes that this might lead to the formation of other small companies and startups splintering off of large companies. If this were to happen, and Toronto became a larger tech hub a la Seattle or the Bay Area, I would expect salaries to go up. I'm holding out hope that Canada will be able to increase its tech presence, and thus result in higher, more globally competitive salaries, but perhaps I'm being too optimistic.
To me Canada's tech sector isn't damned; just dwarfed when it is compared to our much larger southern neighbour. The economy of Canada isn't really based around innovation and technology but rather primary industries like oil/gas/lumber/etc... so it makes sense that our business focus’ on our unique advantage. To me is seems that starting and growing a business is harder to do in Canada then in the States. Just as an example the rate of return for VC firms is roughly about -5% in Canada while in the States it is roughly %10. See: http://www.bdc.ca/EN/Documents/other/VC_Industry_Review_EN.p.... I am not sure why our companies have difficulty competing internationally but alot of the reasons in the article (Lack of Acquisition of Knowledge, Second Place is Good Enough and We Suck at PR) seem like symptoms rather than causes.
> It's also hard when you're spending money educating your citizens for those high paying tech jobs and over half of them go to the USA [1] [2] [3] [4].
Yes, you are correct that the USA is bigger and has more money than Canada. If you think about it globally (as one should), but it's worth noting that they're not so much moving to the USA as they are specifically the Seattle & Bay Area, and they're doing so at lower rates than for comparable Americans living outside those areas. Also worth noting, for the most part, they aren't founding companies in the US. The pattern is to go to the US, work for large tech companies, and about half return to Canada within 5-10 years, which is when they're more likely to engage in entrepreneurial pursuits.
Just looking at the financial might of Seattle & the Bay Area, it's amazing that 90% of Canada's innovators and entrepreneurs aren't in the US. It suggests that the country is perhaps more supportive of innovation than this narrative being presented.
> That and lack of venture capital/funding and, I've heard, increased government barriers compared to the USA, reduce the number of local tech companies.
The conservative financial system and comparative size of Canada does mean there is much less "free money" flowing around, though as demonstrated from the examples I provided, companies do procure foreign investment, particularly from the US, with comparative ease.
...and while you'll always here entrepreneurs complain about government barriers, having started up companies on both sides of the border, I can tell you that in many ways Canada has comparatively smaller government barriers. In particular, the universal health care and generally more significant social safety net also means that it's a lot easier for prospective entrepreneurs to leave jobs at stable businesses and take on greater risk. It's just one of many ways that while it is harder to get capital in Canada, you don't need as much to get going. This is probably part of the reason that a larger percentage of Canada's labour force (67.7%) [1] is employed by small businesses than the US (46.4%). [2]
AI hubs in Toronto & Montreal are more than just satellite offices for USA companies. You may recall that Geoffrey Hinton, "Godfather of AI", was in Toronto, teaching at U of T, when Google bought the startup he founded with Alex Krizhevsky & Ilya Sutskever... in Toronto. The modern AI revolution traces back to innovative work in... Toronto!
Pretty much any time the question is "How do you attract top-level talent?", the answer is "Pay more".
The problem with the tech scene (or even starting any business in Canada) is that there's a lack of investment dollars (many rich Canadians would rather park their money in foreign stocks), and real estate prices are absurd relative to wages (since real estate is seen as the 'safest' place to park your dollars).
Corporate business culture in Canada isn't great either - it's overly conservative and very slow to change and adopt new ideas. Apart from our banks, we have no corporations that are even remotely competitive on the world stage (maybe Bombardier).
I love Canada, but when I'm done my degree, I'll probably be moving abroad, like most of my educated relatives have already done...
There's no money in Canada - raising funding is like praying to the Gods. Consequently, you get a lot of smaller businesses, as opposed to the uniquely American model of the get-big-fast startup (see: Google, Amazon, etc).
There's also the issue of talent drain and pay. I'm currently south of the border working for double what my going rate is in Canada. Most of the people I went to university with are also here (as in the USA).
Yes, for the people not familiar with Canadian software, double. I'd like to be closer to home and live in a more progressive society, but it's a 50% pay cut to do so.
I continue to struggle to understand why things are this bad. How is that a mere hop across the border can easily double one's pay? What prevents Canadian companies from being compensation-competitive with American ones?
Part of it is the distinct lack of "real" engineering jobs. A lot of work I've seen either belongs to the thoroughly disreputable gaming industry, or working as Java monkeys pounding on keyboards... neither option appeals to most top talent.
The other part is the culture of satellites - much of the software work I've found in Canada is at satellite offices of American companies, and having worked at one before, it seems that it's less "satellite office" and more "place full of cheaper people so we don't have to pay Californians to do the menial stuff".
But still, what's with the lack of high-paying software gigs in Canada?
I came to Canada as software professional from the middle east. At one point, Canada had a glimmer of hope in attracting tech talent.
However, on the ground, tech professionals are 'forced' to start up their consulting companies, get hunted down by taxes, threatened daily with outsourcing initiatives (extremely low caliber), and have no prospect of career advancement. Either this or accept a meager pay.
I’m 10 years into my career and been in Toronto the entire time. I often feel like I’m slowly wasting my talent here that would be better utilized somewhere else. Maybe Shenzen or the West coast.
I work days at a job and nights and weekends on my business. The business is doing good, it’s slowly scaling, just a long slog.
In the last 10 years I worked at around 15 different places as a contractor. I met a lot of developers and tech people in general. I get the sense that people here just don’t have the motivation or ambition for business. Maybe because house prices have shot up the last few years, or because it’s the financial capital of Canada. People just want to make money (again the house, living costs, and taxes are high) or move up the ladder. Or maybe because life is comfortable so everything moves at a slower pace.
On the technology front, growing up learning about Nortel and RIM/Blackberry, I just feel like the Innovation Ecosystem is just not here compared to
other places. Maybe it’s partially because Toronto Is just too conservative (eg. East Coast vs. West Coast mentality). There’s a lot of Fintech, Marketplace (Shopify), and SaaS Apps. Pretty much safe bets in terms of Businesses.
I think as a tech Founder part of your goal is to try to balance money generation with innovative ideation. Companies here adhere to money generation before innovative ideation, which results in “meh” businesses.
Being Asian I also feel disadvantaged. It’s like if I moved to Shenzen I would have an advantage because I’m westernized people there would value me more. But the grass is greener on the other side (aka. 996).
I think the Government protects businesses too much vs in the States. Seeing how there’s so many monopolies it’s hard for the small startups to rise up. Look at the telco monopolies and how verizon gets blocked into coming to Canada. Or how the marijuana LPs get a huge head start before the micro craft growers can enter, and you still need a bunch of license to grow and distribute.
It’s a comfortable life here though. I’m mainly here because of family.
My last point is that there is a big problem with startups being acquired by US companies. Tim Hortons got bought out by BK, North got bought out by Google. When I first started, this notable design company behind Medium, Teehan+Lax got bought out by Facebook.
Also, I think North got propped up by the tech media here even though their product was never good. v2 showed promise though, maybe they just burned too much VC/Angel/Grant money so they had to sell to Google.
Canadian here (who lives outside of Canada but recently did a stint there for a bit) and this will sound negative but f-it. Canadian culture sucks when it comes to trying new things. Canada has some extra safety net but the culture is puritanical and conservative and nobody wants to go out on a limb and try something new and crazy. Not like Americans. Those that do are constantly questioned by everybody. The idea of being an entrepreneur, in the GTA especially, is buying a second house in the suburbs and hoping the housing market continues rising.
The problem of trying to get Canadian tech up to par with the US is much deeper than pulling some tax/incentive levers, I think. There are some really deep cultural issues that I don't think can be solved for a few generations.
The main problem is investment. You just don't have the investment capital in Canada that you can get in the U.S. I'm not just talking tech, but throughout the economy. Lots of successful Canadian SMEs get bought out by Americans because there's no one here who has the balls to invest in them. In many cases, their (head) offices are moved to the U.S., further reducing the economic impact they had here and making the U.S. economy stronger. Canada is a perpetual SME incubator feeding the U.S. economy.
Not a whole lot. All of the money, culture, and innovation in technology is happening outside of our borders. With few notable exceptions you will find Canadian start ups tend to follow industry trends rather than make them. The salaries are rather anaemic and the jobs are not terribly interesting. On top of that most Canadian tech start-ups are forced to consider the first exit they can get by their conservative backers. Why would you even consider a Canadian company?
"You can't possibly expect to compete with Switzerland and the US on technology when salaries are two to three times lower in Canada"
Maybe if Canadian companies paid competitively the talent would stay.
Point being, that's an issue of equilibrium.
The problem in my mind is product leadership. Canada has ample technical talent, but few are thinking in brand, product marketing terms etc., also, there's a weird open relationship with the US. The US provides stability, and opportunity for people to develop, but they have to leave so. So the US-CAN symbiosis basically turns Canada into a 'nice suburb' where things are generally very good, but there's nothing very important happening. The talent/exceptional things happen south of the border.
But in the context of migration, it's definitely an odd paradox that as 'cultural diversity' increases, that 'industrial diversity and sophistication' decreases. They may not be drivers of each other though ... the later may be a function of globalization, NAFTA etc..
> "then why doesn't the sector expand to take advantage of the low wages?"
It is. See: the huge presence of multinationals in Canada like IBM, SAP, even gaming giants like EA and Ubisoft. The Canadian tech industry is by no means shrinking, it's just growing in a way that doesn't fit Silicon Valley's "high pay, high benefits" mold. Canada has not seen the massive software engineering wage explosion that the US has.
Which naturally leads to your next question:
> "Contrarily, if the sector is small because high wages attract workers to the states, why can't Canadian companies pay as much as the American companies?"
This is a big and complicated question. The short answer is: because it somehow got this way and now we can't change it.
It's important to note that the US tech industry isn't all shuttles and gourmet meals either - the bulk of the industry is paid a fraction of Silicon Valley salaries, with none of the cushy benefits. The tech industry is divided into the low/mid-end and the high-end, and the two sides could not be more different.
There is an active war for talent in the high-end that keeps driving up salaries and benefits, while low/mid-end software engineering remains relatively stagnant. It's largely a group of companies working on computationally hard problems that's driving this war - folks like Google, Facebook, Microsoft, Amazon, etc. These companies are uninterested in low/mid-end talent, confining the insane salaries to only a small segment of the total industry.
This segment of the industry also largely does not exist in Canada. Canada's tech scene has, for many complex and perhaps unexplainable reasons, developed into one that is largely enterprisey. The tech jobs are largely at not-tech companies (where you're a cost center, not a profit center), and where they are at tech companies, they are at satellite offices of American or European companies.
This doesn't create a market where there is high demand for top-level talent. Complicating this somewhat is the fact that the talent war in the US has bled across the border, thanks to relatively easy immigration laws for Canadian citizens - the bleeding of talent to the south prevents the establishing of companies locally that would feed on a top-level talent pool.
So this really circles back to OP's original complaint. The reason why wages aren't rising in Canada is because companies that demand high talent do not exist in Canada. There are no major companies working on truly hard problems that would demand campuses full of top-level engineers, and thus no drivers for salary growth.
The companies that do exist cannot raise salaries wildly for a few reasons. Firstly, because they are not having trouble finding talent at the level they want at their existing salaries. Secondly, because their business model may rely on being cheaper than the US. Thirdly, there is a lack of institutional employers who employ high-end engineers which would kickstart a talent war.
Canada innovates quite a bit. American companies just keep buying the Canadian ones who do so before they get big. The whole Canadian tech sector is like an incubator for the USA in some ways.
Although… the government invests almost nothing in starting new Canadian companies too, and instead focuses on luring American companies to open offices here, or else on giving money to existing medium and large Canadian businesses to convince them to increase hiring. This is a pet peeve of mine. It’s very short sighted
What is canadian culture? What are canadian values? I've never heard anyone mention canadian culture or values before.
> would love to live in Canada one day.
You are one of the rare individuals. Most canadians I've met want to live in the US. Especially those with money or skills to make money. Better food, weather, culture, history, life, etc.
> - Aggressively encourage/fund/facilitate startups. Unlike salaried employees, startups aren't turned off by the low-engineering-wages. Once Canada can grow 5-10 startups into major established companies with Canadian HQs, that will really boost the local engineering ecosystem and job market.
But they can't compete because of scale. Canada isn't large enough and it certainly has too little internal talent to compete with the US. California by itself can out compete canada by itself. Thrown in the other 49 states.
Even if canada retained all its "brains", it wouldn't matter. We outnumber canada 10 to 1 and outrank canada in every economic facet from resources, ports, infrastructure and foreign talent.
Foreigners with skills, from china to india to the middle east to eastern europe, all want to come to the US to study and work.
It's almost impossible for canada to compete with the US. They have nothing going for them vis a vis the US and their internal market isn't large enough to compete with the US.
There is way less risk tolerance in Canada. But more crucially, government policy does not reward risk taking so favorably, and a heavy presence of government in the funding of tech through a generous tax credit crowds out private investment.
All this being said, I think it’s even more significant that tech investment and talent is concentrated on the Bay Area, and to a more corporate extent on Seattle with Amazon and Microsoft.
Also, Canadian companies and employees whine too much. My attitude is: if you think you’d be better off in the US, it’s easy to just move there. You will earn more, and your company will be exposed to more funding AND much hotter competition for talent. So you’d better have a really amazing idea.
Can you please elaborate on your comment concerning the lack of talent in Canada? What's wrong with the large pool of CEGEP and university graduates or more experienced developers who are well able to pick up new technology?
What does U.S. talent have that's missing in Canada? Are the good ones really all moving away to where the money is? Or could it be that, despite all the available funding, Canadian entrepreneurs are less prone to risk training new recruits?
I lived in Seattle and enjoyed it, but staying in America long term was never an option for me. There's so much more to living in Canada than just our immigration system.
You work at AMZN - I work at a US company in Canada too. Canada is a nation of branch-offices, largely because we have no VC-ecosystem, which is largely because we're a highly redistributive country with high capital gains taxes.
What makes us attractive for branch offices is that smart, hard-working, well-educated immigrants who can't make it into the US can often make it into Canada. Native born Canadians, OTOH, are leaving in droves (https://www.theglobeandmail.com/business/technology/article-...)
But we're a terrible place to start a company and exit, which is why it doesn't happen very often.
The original poster claimed that Canada could replace Silicon Valley - that's not going to happen without a better ecosystem for funding start-ups and rewarding founders.
As for those devs who choose to stay here when they could leave on a TN-1, make twice the money in the US after taxes and expenses (including health insurance and private schooling for kids), and work on more interesting problems at US companies, I encourage them to do the math. They're not doing themselves any favors living in unliveably-expensive cities earning pennies and not saving for retirement, and retirement will come a lot sooner than they think.
As a Candian, it seems to me so very pathetically and predictably Canadian to literally herald the surrender of your own industries to foreign takeover.
Canada is (often) to tech what Mexico is to cars.
Mexican 'assembly' of cars is fine and good, but they don't exactly move up the value chain from there.
Canada produces a lot of decent tech people, who will work for 2/3 the wages, unfortunately, this doesn't map to a successful entrepreneurial climate. Now, that's a hard thing to contemplate, as 'nobody' can really compete with SV at their own game, but it's disingenuous in the least to farm out labor and compare that activity with those doing much of the higher-level work, and most importantly: controlling the profits.
Maybe the Mexico analogy goes a little bit too far, as there are tech startups and a few decent companies in Toronto, by and large, but they have serious trouble scaling into anything. To be fair, it's not like most US cities are any better. In fact, aside from the weather and lack of charm, Toronto is a 'better all-around city' than most American cities.
But there's a serious lack of exceptionalism, and far too many of Toronto's best move on to the US, London, or elsewhere.
This kind of 'pathetic nationalism' is why loathe the CBC. It's as though they are utterly unaware of the extent to which they extoll mediocrity.
Canadians are well educated, get along pretty well, and the 'average person' in Canada in many ways lives better than the average American, at very least there's a lot less calamity, fraud, there's full healthcare which isn't great but it's mostly good.
But - on the issue of talent and exceptionalism, it's a disaster. We are near the bottom of the OECD it talent and R&D expenditures. Canada sends China 'raw materials' and they send us back finished goods: this is the opposite of 'first world/developing world' trading norm.
We should not be hailing mediocrity as a victory. It's nice to have jobs, but there is no Valley of the North.
I’ve consulted for several Canadian tech companies and their finances often seemed remarkably poor. I know some are doing well; I’m more so speaking about “regular people” businesses. Small private companies with staff around 10-20 people.
They work really, really hard for their incomes and the rewards really aren’t what you’d expect. This seems true outside of tech as well.
My wife works for the federal government on the other hand. She earns much less than I do, yet still dramatically higher than the average for our city and the rest of the country. She also has generous time off, training, an excellent union, interesting work, etc. Why in the world would she start a business? She actually could, too. She’s an awesome hydrographer with cutting-edge skills and knowledge. But she’d have to work herself to the bone if she went private and she’d have to work in wildly different and less comfortable contexts. And for what? 1.5x the income? 2x? After that’s chewed up by taxes, she has traded her family life for a career that barely pays more when you do the quantitative and qualitative maths.
Yet I think this is a huge problem. It isn’t really wise to work hard and innovate here, and I think it’s actually harming our workforce and economy quite seriously. Look to many countries and you can quickly point at many past and recent innovations and core competencies. But what do you see when you look at Canada? There’s certainly less, and seemingly less all the time. Our small population is a huge disadvantage here, but we have such immense opportunity for innovation.
I do think we innovate in extractive industries. We do a lot of environmental research around our primary industries, and that’s very valuable. Economically though, I don’t know… We aren’t much of a land of opportunity these days, and it doesn’t seem like much is happening to reverse this trend.
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