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The Tech Revolution in Canada and Why our Cities are Key

Updated: Jun 27, 2022

The tech industry has been expanding exponentially in Canada over the last few years, as indicated by large scale investments in that sector. In Alberta, Cisco announced a $15 million investment to support three initiatives in Western Canada, focusing on job creation and skills development. Cisco has doubled its R&D cybersecurity resources since 2017 and established a new cybersecurity office. As part of the announcement Cisco is also supporting NPower and YYC Net Lab to provide training and development support to underrepresented populations. In Ontario, one of the latest arrival in the Toronto tech landscape is Klarna, a Scandinavian payments company, that followed Microsoft offices expansion in the city - to reach an announced $570 million in investments, along with 500 new full-time jobs. These latest investment are the expression of the Canadian success in the tech industry. Below we explore the reasons that have contributed to making this reality.

Talent, talent and talent!

Much of Vancouver’s tech growth momentum and office space demand is being driven by Amazon’s major expansion into the city, anchored by the company’s future hub at The Post, currently under construction. The Toronto Region’s tech industry is powered by approximately 290,000 skilled workers, making it one of the largest tech hubs in the world. In the last five years, Toronto added over 82,100 tech jobs, more than any other North American city (CBRE). Besides, despite COVID-19’s harsh economic conditions, Vancouver was still able to add 12,900 tech jobs between 2019 and 2020, representing a 21% growth. Much of Vancouver’s tech growth momentum and office space demand is being driven by Amazon’s major expansion into the city, anchored by the company’s future hub at The Post. The online marketplace trust in establishing itself in Canada is a testament to the rich pool of local talent as the most educated country and workplace in the world (OECD).

Meanwhile, the city of Edmonton has been growing a tremendous rate - Edmonton’s tech sector labour force grew by more than 50 per cent over five years! (CBRE), which shows the growth potential of the tech sector. Also, Ottawa as the city with the highest concentration of tech talent in North America (CBRE) which is leveraged by Smart City leaders, developing the public infrastructure of the future - the On-Road Automated Shuttle Trial being an one their exciting projects!

In Canada, U.S.-based companies can also speed the arrival of new tech talent from other countries. This talent stream has for a long time been the backbone of the American tech industry. As the U.S. immigration system slowed under the Trump administration, Canada has introduced programs intended to encourage the attraction of skilled workers. Compared to the immigration system of the U.S, it is easier for companies to attract and leverage talent. As part of a Global Skills Strategy, high-skill and low risk applicants can obtain a work permit is as little as two weeks, allowing tech companies to easily access the skills they need. A dedicated service channel is also available to companies looking to make large job-creating investments. Plus, international students are eligible for a post-graduation work permit that allows them to work in Canada for up to three years, giving employers access to the brightest minds from around the world.

Research: The catalyst to the tech boom!

University of Toronto - St. George Campus, King's College Circle

Research and development are the drivers of innovation, which is paramount in a sector growing exponentially and more rapidly than ever before. In Calgary, the Southern Alberta Institute of Technology (SAIT) received a $30 million donation to help establish a new school that will provide the latest in digital education for students, enabling the institution to advance change through technology.

In Ottawa and Toronto, local institutions are intent on feeding the tech ecosystem. Ontario recently passed a law that explicitly bars companies from enforcing noncompete clauses in employment contracts, encouraging employees to found their own start-ups. Backed by a $100 million donation from local business leaders, the University of Toronto is building a complex that will house A.I. and biotech companies. Invest Ottawa's Area X.O is a prime example on the importance of research. The futureplex develops and accelerates time-to-market and commercial adoption of next-gen technology, particularly in advanced communications. And the city of Ottawa bolsters an impressive record in 5G tech with 90% of Canada’s industrial telecommunications R&D taking place in Ottawa. The University of Toronto's professor Hinton, winner of the Turing award in 2019 has propelled Toronto as a hub for A.I, through his breakthrough paper on neural networks. Further, in the Waterloo region, the University of Waterloo is a hub for research which leads to both universities to contribute researchers and engineers to the Canadian pool of tech talent. ApplyBoard, a fast growing startup from immigrant founders originating from the University of Waterloo, are in turn through their company driving diversity on campuses, increasing accessibility to education as well as ensuring that the best talents are oriented towards Canada from all around the world. Their A.I-enabled platform is creating more connections than ever before- the same connections which are at the heart of the well structured ecosystem of cooperation in Waterloo.

Yoshua Bengio, Scientific Director at MILA – Quebec Artificial Intelligence Institute, recognizes the need for even more investments from government to create a robust source of intelligence to stay ahead in a fast paced and rapidly innovating sector:

We need to train more artificial intelligence experts. Places like Laval University, which already have a research group and AI expertise that form a major critical mass, are an example of where Québec needs to invest to be involved in the industry.

The institute serves both Quebec City and Montreal as part of the province. Montreal has been a leader in Artificial intelligence, with their research funding amounting to to $2B a year. Notably, A.I is being applied in a multitude of ways from addressing environmental challenges to personal care. Most notably, through an initiative of the University of Montreal, the city is at the forefront of ethical and responsible A.I.

The right support : Canadian IPAs

Canadian Investment Promotion Agency (IPA), as arms-length organization representing municipalities in the region, works with partners in their province and Canadian governments to provide a comprehensive, customized service that allows for a smooth transition for international companies. They have been instrumental to Canada's boom in the A.I sector for example through the delivery of tailored, innovative solutions that will set the stage for their success, and the tech industry as a whole. Calgary Economic Development, for example, is providing the right framework to catalyze an ambitious project - the city of Calgary is currently undergoing a massive digital transformation leading a $20 billion spending from 2021 to 2024, redefining Alberta's landscape. Suncor announced a multi-year strategic alliance with Microsoft Canada, tapping into the full range of Microsoft’s cloud solutions to empower a connected and collaborative workforce, upgrade data centres and increase analytics capabilities. The IPA's role in facilitating the integration of these tech companies is critical for the FDI to be successful and the project to thrive. One thing is certain - the future of computing is quantum! The technology harnesses the properties of quantum states, holding incredible potential for a wide array of applications. Waterloo - known as the “Quantum Valley” has been structured in a theory-to-commercialization ecosystem, mainly facilitated by the support of Waterloo EDC - Waterloo's IPA to create a robust structure which favours cooperation. The Perimeter Institute for Theoretical Physics – the world’s largest independent theoretical physics research hub, among other research facilities, feeds the growing quantum business economy which is thriving whether in banking, insurance or defence for example.

Canada also creates the right environment that is conducive to innovation. With $5.6 B contributed through the Strategic Innovation Fund (SIF) to support innovation, growth and tech transfer in Canada by the Federal Government. Besides, Canada ranks first globally in terms of R&D Spending in higher education as a share of GDP.

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