A staggering statistic was recently revealed – U.S. tech workers make 46% more than their Canadian counterparts. Amidst a cost of living plight, Canada’s highly-skilled tech talent is flocking south with the promise of higher salaries and opportunities for career advancement.
One of the most significant challenges faced in Canada is the limited number of large tech companies. This scarcity contributes to lower salary margins, resulting in brain drain and diminished equity value.
It’s difficult to draw a comparison between Canada’s tech ecosystem and the vast opportunities in the U.S., which houses the largest tech companies in the world and has a population 8.7 times the size of Canada. The reality is, Canada isn’t the U.S., nor do we want to be. To alleviate the gap and make staying in Canada more enticing for workers, we need a different approach to combat the skills migration: larger companies, more successful exits for tech, bolstered capital investments, and an actionable plan to lower the cost of living.
The innovation economy: How do we make Canada exciting again?
In order for Canada to retain its top talent, we must first ensure we have the kind of companies that can house such talent. By providing incentives for startups and established companies, Canadian talent will be drawn to stay and contribute to the national economy.
Large companies play a role in helping to create the right environment for skilled workers. By offering more attractive salaries and desirable benefits, larger firms can compete with Silicon Valley giants for talent. Encouraging substantial growth amongst our top companies is the pathway for responsibly driving higher salaries and retention. Companies should also shift their focus towards upskilling internally to encourage retention and fill critical tech functions.
Increased exit opportunities for tech businesses, by selling a stake of their shares either publicly or privately, will help incentivize entrepreneurs to stay in Canada and reinvest their profits as they expand. With the promise of exits from some of Canada’s biggest tech companies recently not coming to fruition, talent can remain stagnant as a result of the lack of actualization. By reinvesting continuous support into Canadian companies, employees can feel confident staying in Canada with a larger stake. Big exits help the entire ecosystem as they drive bigger investments in the future, and Canada can solidify its status by actively investing back into its tech sector and driving innovation to stay competitive.
We also need to see more investors willing to take risks and back innovative companies with the potential for huge exit valuations. The Canadian government needs to keep driving ecosystem innovation and encouraging more liberal capital investment back into our economies. We have a conservative culture of investment here, and the Canadian government needs to be fighting that tooth and nail.
Canada should have a cost of living advantage compared to the U.S., but the reality is that it doesn’t. While healthcare has made a positive impact, housing prices and the cost of goods have made it increasingly expensive to reside in Canada. Immigrants are leaving Canada for higher salaries, lower taxes, cheaper housing, and a stronger dollar south of the border. Alleviating that disparity will be critical if Canada wants to keep its talent here.
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Simply put, Canada is a welcoming and inclusive environment that is a stable place to build a career with a good quality of life. Canada’s smaller, resilient marketplace and supportive tech community make it attractive compared to the saturated American market.
Canadian companies tend to have the resolve and resilience needed to survive in a smaller marketplace overall, and the ingenuity to bring their products worldwide. The capacity to deliver innovations on the global stage positions Canada as a hub for forward-thinking companies that can redefine industry standards.
Ultimately, it’s the combination of innovation, enhanced investment, and a reduced cost of living that can help Canada ensure it has the scale of companies capable of retaining and attracting top talent, making it more advantageous to work here. By fostering the growth of more sizable tech companies, Canada can elevate its reputation and relative desirability, ultimately encouraging immigration and enabling inexperienced tech workers to develop into more intermediate and senior roles.
Jeremy Shaki is the CEO of Lighthouse Labs.
