A few weeks ago, there was a post by Freya Jeffries regarding London’s tech startup scene and I thought this would be a great opportunity to illustrate one for Canada.
Canada is renowned for its plentiful natural resources but over the years it has also developed a name for itself in the technology sector with a focus on FinTech, HealthTech, e-commerce, video gaming, and ICT. This has led to the country being highly sought-after by foreign SMBs. Doing business in Canada gives companies easy access to the US market, and many companies find that Canada offers a much higher quality of life than the US. More than ever, this is a good time for international startups to come and explore Canada’s startup ecosystem.
By the numbers
According to a global report by StartupBlink, which ranks more than 125 countries and 950 cities according to their startup ecosystem strength, Toronto is at #11, Vancouver at #19, Montreal at #34, Ottawa at #102, Calgary at #108, and Edmonton at #129 on the list.
Overall, Canada ranked third in the world, falling just behind the US and UK. The report also highlighted that “Canada might soon grab the second spot on the list with three major hubs (Toronto, Vancouver, and Montreal) all contributing to the strength of the country’s ecosystem”.
Growth accelerated by government support
While there is less access to VC funding and the persuasive call of Canada’s southern regions (as shown by Calgary and Edmonton’s rankings), the Canadian government is working hard to build and maintain a successful startup ecosystem. There is a huge selection of government aid available to small businesses, some of which includes grants that don’t have to be paid back.
Aside from monetary support, the Canadian government has been determined to help new businesses through initiatives, such as opening incubators and accelerators. As of 2015, MaRS Discovery District (an accelerator located in downtown Toronto) has created more than 4,000 jobs, including a network of 1,000 high-potential-growth startups that collectively generated more than $1.3 billion in revenue from 2008 to 2015, and raised over $750 million in capital investment.
- For a full list of Canadian accelerators, click here
- For a full list of Canadian incubators, click here
The Startup Visa, which offers permanent residency to great startups that come to Canada, is also something to note.
Increasing talent from universities
Alongside substantial government backing is Canada’s array of world-class universities. The University of Waterloo, which is located at the heart of Kitchener – Waterloo region (increasingly known as the Silicon Valley of the North), is at the forefront of innovation. Every year it sends an incredible number of students to Silicon Valley through its co-op program and produces thousands of talented grads. The environment is extremely encouraging for students to jump into the startup scene by taking ideas to the next level, which is how Research in Motion (RIM) began (today known as BlackBerry). Currently, Waterloo has the second-highest density of startups in the world and is home to the headquarters of some of Canada’s largest tech companies.
What’s next?
Canada’s startup landscape is still in its early stages, and has a few teething problems. First, companies tend to exit too early rather than focusing on growing something sustainable. Secondly, there is a significant pay difference between grad offers from the US and Canadian tech companies, which causes Canada to lose a lot of top talent (for a more insightful and detailed comparison of US vs Canadian grad offers, read this article).
However, with the new US administration’s hard stance against immigrants, international talent could easily look to Canada as an opportunity. Over the last five years, Canada has brought in more than 800,000 immigrants to fill holes in the jobs market. With 20% of Canada’s population already born elsewhere immigration has always had an important role to play in Canada’s future success. By 2019, there will be 182,000 tech jobs up for grabs and nowhere near enough people to fill them. So, while Canada’s tech scene is growing, there is yet more to come.
Jason Oh is a management consulting enthusiast with past experience in helping F500 financial services clients with product management, go-to-market and distribution channel strategy
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