Discover why the Canadian startup scene, and Toronto, in particular, is becoming a tech Mecca for founders hailing from around the world going into 2022…
For north of a decade, Silicon Valley has been the obvious destination for ambitious founders the world over. And this should come as no surprise: the Bay Area is home to some of the brightest minds in technology, and a seemingly endless supply of venture capital raising opportunities.
But in recent years, a slowdown in VC financing, concerns regarding the “bubble of everything” phenomenon, as well as increasingly stringent immigration regulations and the Covid-induced economic contraction in the States has led to an increasing number of aspiring founders looking beyond Silicon Valley.
And thanks to Canada rolling out the red carpet for foreign entrepreneurs and startup founders with their acclaimed Startup Visa Program (SUV), the country is one of the primary beneficiaries of this trend.
Unlike in the US, where founders have an increasingly hard time qualifying for a Green Card, Canada’s SUV Program makes obtaining Canadian permanent residency relatively easy, and within as little as 15 to 19 months.
But it’s not just US immigration challenges that are to blame for this situation; the overall Canadian value proposition makes a lot of sense – for entrepreneurs and tech founders, in particular.
Let’s get into the details below…
Ten reasons why a move to Canada makes a LOT of sense in 2022…
ACCESS TO CAPITAL: In Canada, opportunities for raising capital abound. Boasting a wealth of private venture capitalists, angel investors and startup incubators, not to mention an array of grant funding opportunities, the country is renowned for nurturing startup companies with global scaling potential.
What’s more the Canadian government is committing billions of dollars to stimulate further growth and innovation in the startups space; both by means of investment and attractive tax incentives for tech startups.
TALENT POOL: Canada has, in recent years, emerged as a global leader in the fields of Science, Technology, Engineering and Maths (STEM). With 3 of the world’s top 50 universities based in Canada, the country’s talent caliber is of exceptional quality, both in terms of its breadth and depth. Unsurprisingly, Toronto, Ontario and Vancouver are among the top-ranking Canadian cities for tech talent. According to the CBRE 2020 report, Scoring Canadian Tech Talent, Toronto is home to over 250,000 tech workers, while over 141,600 techies called Montreal home going into 2021. Yet with employers like Shopify, Amazon and Google all competing for talent in places like Toronto, competition for quality talent tends to be stiff…
QUALITY OF LIFE: As of 2021, Canada is the No. 12 country in the world in terms of its quality of living standards, according to CEOWORLD Magazine’s 2021 Living Standards Ranking Index. The index took into account metrics such as affordability, economic stability, job prospects, political neutrality and stability, as well as safety, public education and public healthcare quality. Combined with its scenic diversity and close proximity to the US, the country therefore ticks a lot of boxes for prospective founders and startup employees from the developing world.
MARKET ECONOMY: Canada’s economy is both diversified and highly developed. With an annual gross domestic product (GDP) of US $1.64 trillion in 2020, its economy is also the ninth-largest in the world, according to the latest available World Bank data. In addition, the US and Canada enjoy the world’s largest and most comprehensive trading relationship, supporting millions of jobs in each country. The value of this bilateral trade and investment relationship is estimated to be in the region of US $1.6 trillion. Canada is also the US’ largest export market, accounting for over 17% of all US goods exported in 2020. The two countries’ in goods and services, per day, is in the region of US $1.7 billion.
STRATEGIC LOCATION: Given the above trade relationship, combined with the two countries’ geographic proximity and timezone overlaps, Canada serves as an excellent base for countless US focused and multinational tech startups and businesses. There is no time difference between Washington, DC, USA and Ottawa, ON, Canada. Toronto also enjoys a very reasonable 4-hour office hours overlap with London and Lisbon, as per the below table:
OFFICE HOUR OVERLAPS
LONDON & LISBON
08:00 – 12:00
MATURE AND DIVERSIFIED STARTUP ECOSYSTEM: According to the StartupBlink 2021 Global Startup Ecosystem Index report, Canada’s startup ecosystem was the 4th best in the world. The Top 3 spots are held by the US, UK and Israel.
According to StartupBlink, what sets Canada apart from the competition is its ability to nurture both unicorns and “highly popular” startups. Unsurprisingly, therefore, the 2021 Narwhal List, which tracks future promising startups based on their fundraising velocities, highlighted a whopping 42 Canadian companies that may well achieve unicorn status in the near future.
FIBER OPTIC CONNECTIVITY: Canada offers some of the world’s fastest fiber-optic internet line speeds, with download speeds being as high as 167 Mbit per second.
EASY OF DOING BUSINESS: According to the latest World Bank data (2021) Canada ranked 23d out of over 180 countries surveyed in terms of its ease of doing business.
ECONOMIC GROWTH: Canada’s economy is expected to grow by 5% in 2021, before tapering slightly to 4.25% in 2022, and around 3.75% in 2023. The Bank of Canada expects demand to be supported by strong consumption, business investments, and a rebound in exports as the US economy continues to recover.
STARTUP SUPPORT PROGRAMS AND INITIATIVES: Over the past few decades, Canada has invested heavily in infrastructure and targeted programs to support and accelerate domestic startup development. Some of the country’s most well known startup programs include:
CommuniTech: Launched in 1997, CommuniTech is a Waterloo based innovation center that works with tech startups at various stages of growth.
Digital Media Zone: Developed by Ryerson University, the DMZ acts as an incubator and accelerator for entrepreneurs in Canada.
MaRS Discovery District: This massive, Toronto based startup incubator offers entrepreneurial training mentorship, as well as office space from which startups can launch their businesses.
NextAI: The NextAI Program focuses on developing Canada’s Artificial Intelligence (AI) capabilities by providing participants with access to mentorship, seed capital, and a host of AI focused tools early stage startups can derive benefit from.
Scientific Research and Experimental Development (SR&ED): The SR&ED initiative was one of Canada’s earliest initiatives to start positioning the country as a preferred startup destination. This tax incentive program passed in the 1990s, and encourages companies to increase their spend on research and development. Under this incentive program, startups can claim back up to 35% of their spend on R&D, up to a maximum value of $3 million.