Silicon Valley be warned: Toronto’s tech sector is on the rise, and its currently outpacing the likes of major North American tech hubs including the San Francisco Bay area, Seattle and Washington, DC, according to a new report from BMO Capital Markets.
According to the report, which looks at Canada’s economy as a whole, it’s Toronto’s burgeoning tech sector that continues to strengthen the province’s economy.
Toronto´s tech sector is growing
The Greater Toronto Area’s tech sector has grown 50% in the last five years with nary a sign of it slowing down. Moreover, the report notes that it’s helping buoy the region’s economy, which is robust and slated for more growth.
Toronto is currently home to roughly 214,000 tech workers, making it the fourth-largest tech market in North America.
While Toronto is known for its long track record of culture, education and diversity, the most important component of Toronto’s success is its talent, which continues to attract international heavy-hitters such as Google, Apple and Amazon to the city.
But it’s Toronto’s well-educated talent pool that is the driving force of the city’s tech sector, which BMO says is only going to continue to grow.
“We don’t believe the sector has peaked; we expect it will continue to grow,” reads the annual Blue Book report.
Big companies have plans to increase operations in Toronto
Christopher Alexander, REMAX Integra’s vice president and regional director for Ontario-Atlantic Region, says the report’s findings aren’t surprising because Toronto real estate is still inexpensive compared to the San Francisco Bay area, and in tandem with the city’s overall stability, companies will continue flocking there.
“The GTA continues to boast high-quality and well-educated technology talent. This will continue to attract companies to the area—both Canadian and internationally based—which in turn will continue to strengthen the economy,” reads the report.
Ontario´s economy to grow at 2% in 2019
The report says growth in the tech industry will help Toronto drive the province’s economy to grow at 2% in 2019.
There are, of course, additional factors that with strengthen the province’s economy, including the export markets, infrastructure spending, and the stabilized housing market according to the report.
“The regional economy continues to be heavily dependent on export markets, with the GTA exporting $70 billion in goods and services every year,” reads the report.
Additionally, the report says the stabilized housing market is a major contributing factor, and it’s “propped up by steady employment growth and the purpose-built rental apartment market.”
The housing demand has started to ease, thanks to new mortgage rules from the federal government rising mortgage rates.
The BMO Capital Markets report echoes another report from Marcus & Millichap that noted the GTA has cemented its reputation as a leading North American tech hub. However, while the city will continue attracting top talent, barriers to homeownership could impel more of them to rent.