Canada Wants Silicon Valley’s Tech Employees
Canada Wants Silicon Valley’s Tech Employees
Despite talk of a business-friendly administration, the U.S. tech sector may face some pretty serious employment challenges under President Donald Trump. First, there was the immigration ban that threatened to stop immigration from seven Muslim-majority countries, then the uncertainty about H-1B visas for skilled workers, and finally questions over how the Trump’s administration’s “Buy American, Hire American” strategy would affect sectors that rely on outsourced or imported talent. For foreign countries looking to build their own urban tech scenes, the situation poses a welcomed opportunity: With some of the best tech talent in the world anxious about losing their work visas in the U.S., tech hubs around the world are making a push to get skilled labor to their shores instead.
One country that may be an obvious choice is Canada. Canada has not only been vocal about its pro-immigration stance, but has also been investing in a small, burgeoning tech scene that’s emerged in the last five years. Although it’s incomparable in size and dollars to Silicon Valley, where some 23,000 startup companies compete for talent and billions of dollars in funding, Vancouver and the “Toronto-Waterloo Corridor” have been quietly building an ecosystem of Canadian tech entrepreneurs. Now, they say the country is ready and willing to compete for global talent.
One manifestation of this ambition is an innovation hub in Toronto called MaRS, which hopes it can successfully lure Silicon Valley types up north. MaRS is an impressive project on paper: The center sits near the University of Toronto and consists of four towers, housing some 6,000 workers at tech companies small and large. The campus boasts some big names including Facebook, Paypal, AirBnB, Autodesk, Etsy, along with some 200 startups. Those at MaRS are hoping that highly skilled immigrants trying to avoid the impact of Trump’s policies and other immigration-curbing political maneuvering, such as Brexit, can come here. They’re hoping that areas offering less political turmoil around visas and immigration will become increasingly attractive.
MaRS is a public-private partnership between Canadian tech companies and the Ontario government (the Canadian Federal government partners on programs) aimed at creating a physical space where made-in-Canada tech ventures can thrive. In addition to a campus with office space for startups, it’s the kind of place where you run into Navdeep Bains, Canada’s Minister of Innovation, Science and Economic Development, waiting for the elevator (as I did on a recent visit). But the arrangement hasn’t been perfect, and MaRS has faced criticism. The fact that the Ontario provincial government is a partner on the project has brought up political scrutiny and questions about whether bolstering tech hubs is a good use of public money. The center became an election issue for the Liberal party when the Ontario provincial government provided financing totaling over 300 millionCanadian dollars to help MaRS to complete development of a building and buy out an American developer. Recently, the center found private funding to repay its loans.*
To be sure, there have been growing pains, but many think that the country is poised for tech growth. “I think Canada's never been in a better position in terms of its ability to foster the growth of tech companies. I'm very excited about what we're seeing in Canada and there's never been a better time,” said Janet Bannister at Real Ventures, the largest Canadian seed- stage venture capital fund. Bannister says that the energy of the Canadian tech sector increases as more local success stories happen. The vast majority of Real Ventures’ investments are in Canadian based companies, but while there is venture capital funding, the tap isn’t flowing as abundantly as it is in Silicon Valley.
That’s because the scale is still comparatively small: Venture capital investments in Canadian companies totaled $1.7 billion in 2016, a fraction of the $59 billion in the U.S. (Notably, the coupon app Flipp raised $61 million last year). But some see that as a welcome change from larger hubs. “The tech scene for me is much more cultural and a smaller microcosm that is spawning a lot of interaction. Everywhere you walk in this building there's someone going through what you're going through,” says Paul Parisi, the general manager for Paypal Canada, which has its offices in MaRS.
Still, the hope is that the proliferation of small companies, some of which will attract enough investment to become bigger companies, will mean that those moving to Canada to work in tech will have plenty of options, even in a specific job doesn’t work out.