8 Reasons Startups Choose to Start Up in Canada

Author : madihalodhi
Publish Date : 2021-01-02 12:52:39


8 Reasons Startups Choose to Start Up in Canada

For decades now, tech startups have been synonymous with Silicon Valley. But geography actually isn’t the secret sauce that makes startups possible. According to Paul Graham of Y Combinator, startup culture can thrive just about anywhere: “What it takes is the right people. If you could get the right ten thousand people to move from Silicon Valley to Buffalo, Buffalo would become Silicon Valley.” As it happens, this Silicon Valley effect is now being felt right across Canada. More and more of the “right people” in technology are choosing to make Montreal, Waterloo, Toronto and Vancouver their places to grow. Let’s look at some of the reasons why.

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They have access to a brilliant talent pool
Canada is home to a well-educated, highly literate workforce and an array of excellent universities from coast to coast. Leading the pack in technology is the University of Waterloo. Known as the MIT of Canada, Waterloo attracts steady streams of recruiters from Apple, Google and Facebook. And the interest of the technology giants has been matched with investment. Montreal’s reputation for excellence in artificial intelligence has prompted Microsoft to grant R&D funding of $6 million to the Université de Montréal and $1 million to McGill University. In addition, Google is contributing $150 million to AI research by the Vector Institute at the University of Toronto. (This AI investment comes on top of the launching of Google Brain offices in Montreal and Toronto.)

The talent pool is diverse
Toronto has been called the most diverse city in the world, with about half its population made up of immigrants from 230 nations. Canada as a whole has embraced immigration as a means of replenishing an aging workforce, welcoming more than 800,000 newcomers in the past five years alone. Most immigrants to Canada settle in urban centres, thus increasing the potential talent pool for startups.

And that talent comes cheaper
The Canadian dollar continues to hover around the 75¢ US mark. This allows international investors to buy more of everything with their capital, including labour. And Canada’s universal medical insurance means that less direct investment is needed to keep employees healthy.

Canadian startups are in good company
Canada is already a magnet for startup success: Slack, Shopify, FreshBooks, Tunnel Bear, Wattpad and Influitive (to name just a few) started in Canada, and they continue to thrive. While the Toronto-Waterloo corridor has attracted most of Canada’s tech startups, Vancouver continues to punch above its weight. Vancouver is home to success stories like Hootsuite, and the city shares the Pacific Northwest region with neighbours like Microsoft and Amazon in Seattle.


The tech giants are already here
Google’s parent company, Alphabet, has chosen Toronto as the site of a new 12-acre digital city to be built “from the Internet up.” And technology leaders like Microsoft and Amazon Web Services have added Canada to their worldwide cloud infrastructure. Technology’s high opinion of Canada is shared by Boston’s Reputation Insititute. In its annual ranking of the world’s 55 most reputable cities, Canada was well represented in the top 10, with Toronto in fourth place, Montreal in seventh and Vancouver at number 9.

There’s help from the government
Governments across Canada support small businesses and tech startups with a range of funding programs. In addition, the federal and provincial governments cooperate to offer grants of up to $10,000 per employee for workplace training by approved providers such as Global Knowledge.

And the private investors have returned
While government funding is certainly welcomed, real growth depends on investment from venture capitalists. In recent years, the Canadian government essentially stopped taxing the capital gains of foreign investors in technology, thus reviving the interest of the VC community.



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