Recent moves by US technology giants Meta, Google and Amazon to significantly increase Canada’s presence and staff have solidified the country’s status as a growing hub for technology talent.
While the technology boom in Canada may be welcome news for those who dream of working for these tech giants, it comes at a price for local startups that suddenly have to compete with foreign Goliaths for the best and brightest in the country.
“The more companies are created and built, the greater the pressure,” said Jeremy Shaki, co-founder of Lighthouse Labs, a Toronto-based technology training company that offers coding camps and other services for people who want to raise the bar. you are. careers.
Shaki says it’s no secret why big foreign technology companies want to open a store in Canada; in addition to accessing new customers, Canadian universities are rapidly recruiting skilled workers – and they often come at a fraction of the price they would cost in places like Silicon Valley.
In late March, Meta (formerly known as Facebook) announced plans to hire up to 2,500 people in Toronto and other parts of Canada, while Google said it was looking to triple its workforce here. Amazon wants to hire about 600 technical jobs.
But financially, these companies have the resources to outperform everyone else when it comes to securing the right person, and that can make things harder for local companies trying to compete.
More than just money
Ron Spreevenberg faces this challenge every day. He is the CEO of HiMama, a software company founded in Toronto in 2013. HiMama produces software solutions for the childcare industry and employs about 180 people, more than half of whom have been hired in the past two years.
Now with 10,000 customers, the company has expanded its rental pool far beyond their home base in Toronto, with staff in Canada and the United States.
Gone are the days of Canada, when it was little more than a source of cheap coders, says Spreeuwenberg.
“I think we had a period of time when we were lucky when we could find really great talent at lower levels of compensation,” he said in an interview. “But people found out about us and that made it a challenge.”
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Ron Spreuvenberg, CEO of Toronto-based software company HiMama, says his business is booming, but it’s becoming increasingly difficult to compete with US giants that are setting up a store in Canada because of all the technology talent here. 0:50
The biggest thing Spravenberg says he hears over and over again from new employees is that they want the opportunity to grow and develop their skills. “The number one reason people choose a company or a role is what the company does and the opportunity for them, in terms of learning and development, as well as the challenge,” he said.
However, he admits that money helps. “We know we’re competing with companies that can certainly afford a lot more than we can when it comes to compensation.”
Spreeuwenberg says the main feature of HiMama’s sales sales to potential employees outside Canada is the country itself, as well as the ability to work for the company’s goal of improving children’s development.
“These are very important to us and things that many of our employees are deeply interested in,” he said.
Meta recently announced plans to hire up to 2,500 more people in Canada as part of a plan to target what is called the metauniverse. (Evan Mitsui / CBC)
The desire to do a good job and help solve problems is a major theme at another Canadian startup, Mysa, based in St. John’s. Founded as a Kickstarter project in 2016, the smart thermostat company has grown from just two employees at launch to more than 100 across Canada today, serving more than 150,000 customers.
Just as Shopify is synonymous with Ottawa and BlackBerry is at Waterloo, the 800-pound gorilla in the East Coast technology sector is Verafin, a St. John-based cybersecurity firm that made headlines last year when it was bought by Nasdaq for nearly $ 3 billion. .
While not a household name in the rest of Canada, Verfin’s success has shed light on the region’s thriving technology sector, said Mysa co-founder Joshua Green.
This means that it is also dealing with the same conundrum that other start-ups face: It is difficult to compete with large technologies with deep pockets.
But just as HiMama attracts people who want to live in Toronto, it is able to make such a request.
“This quality of life, being able to work for a technology company while living in a place like Newfoundland and Labrador, is attractive not to everyone but to a growing number of people,” Green said.
“And the number one reason I think people want to join – our mission and why we exist as a company – is to fight climate change.”
Investment money is also pouring in
HiMamas and Mysas aren’t just attracting the attention of tech giants like Google, Meta and Microsoft when it comes to hiring; they also attract US investment dollars.
HiMama recently secured $ 70 million in funding from Boston-based private equity firm Bain Capital, a sign of how radiant the Canadian technology ecosystem has become.
“There is a lot of interest from Canadian investors outside of Canada because of the talent and quality of startups,” said Craig Leonard, a partner at Graphite Ventures venture capital fund.
“But they are also relatively cheaper sometimes than some of the companies that would be embedded in some of the other ecosystems.” [like] say, in the United States. “
According to a recent report by commercial real estate firm CBRE, Toronto is the third largest technology center in North America. Ottawa and Vancouver are also in the top ten, well ahead of Austin, Texas, Portland, Washington and Chicago.
Although it may be hard to believe, Toronto has more technicians than Seattle, home of Amazon and Microsoft.
Not so long ago, lower wages would be a major selling point for an American technology company looking to build a foothold in Canada. But the pandemic has changed things somewhat, as the move to virtual offices has allowed Canadian companies to attract talent from around the world.
“It also equated salaries and the opportunity for Canadian talent to go to work for other companies,” Leonard said.
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Craig Leonard of investment firm Graphite Ventures says the right technology ecosystem for everyone is one in which companies invest in their employees to create value for them, but also ultimately create the next generation of companies in the process. 0:36
For Dr. Alexandra Greenhill, CEO of the Vancouver-based healthcare-focused artificial intelligence firm Careteam Technologies Inc., little healthy competition is good for everyone, making companies of all sizes better while stimulating the next generation of start-ups.
“If we do it right, it can be a very positive thing for the country,” she said in an interview. “But if we don’t do it right, it could be a disaster.”
Greenhill said she recently lost a handful of great Amazon people after she set up shop in her backyard in Vancouver and “offered two to three times the salary I offer my engineers.”
While no one is embarrassed to leave, she would like to see big rivals invest a little more in training less experienced workers, instead of just raising a local talent fund that has been carefully set up over time.
“We can give them all sorts of privileges and interesting things to do and whatnot, but pure dollars are just completely out of our league and raise all prices,” she said.
Although Greenhill acknowledges that this is an ongoing struggle, she is optimistic about Canada’s technological future because she can see what is possible when the right environment is created – one that encourages foreign companies to enter and participate in the ecosystem instead of just to take from her.
Technology giants, including Netflix, Google, Amazon and Facebook (now known as Meta), have recently been hiring in Canada. (Jason Alden / Bloomberg)
She is on board the Canadian Digital Supercluster, a government-led initiative that seeks to quickly track Canada’s status as a digital hub. Greenhill says the initiative combines a carrot of government money to fund technology projects with the stick that the money is tied up.
In particular, foreign technology giants wishing to participate must invest and take root.
“They have a role to play in making the ecosystem a better and stronger place,” she said.
A rising tide lifts all the boats
With government support, the supercluster initiative is acting as an organizer, Greenhill said, holding big technology “accountable for its commitments and urging them to behave like good corporate citizens.”
And instead of looking at big technologies as an adversary, they can help cross-pollinate the entire ecosystem. “They create accelerators, they become mentors, they create joint projects with local companies,” she said.
For the investment community, dollars and cents will always come first, but Graphite’s Leonard says the best result for Canada’s technology sector is one that has a lot of collaboration and competition.
“If you get this consistent investment … it creates a flywheel effect on anchor companies, which then develop that talent,” he said. “They set up companies, these companies go out, this talent goes back to the pool, and so do the investment dollars.”
Without this cooperation and long-term commitment, there will be no rising tide to lift all the boats.
“If we don’t do anything, you could be a country that just exports talent,” Greenhill said.
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