We recently wrote (not for the first time) that brain drain—the concept of educating local or imported intellectual talent only to lose it to a more competitive foreign market—is a considerable problem for Canadian tech.
A new report from The Logic illustrates exactly why Canada continues to lose a significant portion of its well-educated talent pool to other markets, primarily the US.
In a nutshell? Despite outrageous costs of living, even when compared to the biggest Canadian cities, tech companies in America’s major metros pay so well that it simply doesn’t matter.
With friction to move from Canada to the US being relatively low, especially with the support of a big tech firm, it’s a tempting proposition for many.
“Tech workers enjoy some of the best job mobility around, allowing them to pick and choose where to work and live,” writes Bryson Masse for Logic. “In Canada, that often means moving to the U.S. in search of higher wages and better compensation.”
Tech salaries in the US are nearly 50% higher than in Canada, suggests data from Toronto Metropolitan University think tank Dais. Non-wage compensation, such as stock options, are also much larger on average south of the border.
The Logic compared major Canadian and US hubs to each other, including heavyweights Toronto and San Francisco. Their report noted that while a one-bedroom rental apartment runs about $2,300 in Toronto, that same condo costs twice as much in San Fran. Yet San Fran pays well over double what Toronto offers on average.
“The tech salary gap between Toronto and San Francisco is wide,” Masse remarks, noting that “San Francisco’s salaries more than make up for its elevated rent and costs of living.”
Another example from the report: Pacific Northwest neighbours Vancouver and Seattle may share a tight-knit region—but when it comes to compensation for tech talent, the two cities diverge sharply.
To wit: A software engineer in Seattle earns an average salary of $222,000 a year, while his counterpart in Vancouver earns just $121,000. And with similar living expenses, the difference only widens.
The final comparison from The Logic, Montreal versus New York City, shows that NYC is held down by absurdly high living expenses, particularly its monthly rents averaging more than $6,000. Montreal’s cost of living is markedly lower, although tech talent in Quebec earns less than half of their Big Apple counterpart.
