Over the previous couple of years, Canada’s technology sector has been experiencing a renaissance. Increased venture funding has been helping to create a robust tech ecosystem with major hubs in Vancouver, Ottawa, Montreal, and Toronto. Here’s how public venture funding might help build Canada’s tech talent.
Despite this noticeable growth, however, Canadian tech companies still face significant challenges in terms of attracting and retaining top-quality talent — but that’s needs to change.
Public venture funding has turned into a valuable avenue for growth for early-stage businesses in the sector, helping to put Canada’s tech industry on the map for professionals both locally and abroad.
Where Canada’s Tech Talent Landscape is Today
Canada’s capabilities for developing tech talent are evident across several its post-secondary institutions, and technical education is also seeing investment from industry players.
Shopify is dealing with Carleton and York universities to recruit grade 12 students for a co-op computer science degree. Despite such efforts, up to 25% of STEM graduates from the country’s top universities leave Canada to work abroad, taking the investment to their education — and their potential to create tax dollars — together.
Canada is spending so much time to make it easier for skilled professionals from abroad to make their way in to our growing tech ecosystem.
Government-led programs such as the Startup Visa Program and the Global Talent Stream are proving successful in attracting quality talent.
With the Global Talent Stream, for instance, the united states has paid down visa-processing times from 10 months to two weeks for all those with a background inside it or STEM-related fields. To date, some 1,000 technology businesses have hired 4,000 workers through the program.
Imported talent — combined with STEM graduates that stay in-country, in many cases are recruited by major international companies.
These workers are recruited to work in international development offices.
Most of the time, employees in these satellite locations are paid at a discount of what their peers make at HQ. The code developed in these offices is then monetized by international firms. The monetization reduces the effective share of corporate taxes funneled into the Canadian government.
Besides, these firms will often work to move their top talent to their international headquarters, further contributing to Canada’s tech talent gap.
All of those factors total up to a tenuous talent landscape that begs to be addressed by both industry and government alike — especially if you want to see Canada’s tech ecosystem participate along with other world wide leaders.
Incentivizing Tech Talent to Stay
If we want to keep existing tech talent in Canada, then we need to ensure that our tech industry is something worth staying for. On their part, tech organizations are taking their fates into their own hands.
To combat having less private venture funding in Canada, growth-stage businesses are leveraging public capital raising.
Public venture capital has been vital in establishing Canada’s leadership in the resource space. Canada’s average deal size across all deals in 2018 was C$12 million. That figure is in comparison to US$14.5 million for early-stage businesses and the usa $42.2 million for late-stage businesses in the United States.
Junior mining and energy businesses capitalized on public markets like TSX Venture Exchange to attract retail investors. The capitalization also builds success in the beginning. We’re now seeing our technology community leverage these same mechanisms to foster growth.
An added bonus? By being public, companies can better attract qualified employees with commodity, helping them buy into the long-term success of the business.
Both federal and regional governments work to develop innovation incentives which could develop more desirable job opportunities for local and international professionals.
The job opportunities are the Scientific Research and Experimental Development (SR&ED) tax credit. Federal tax breaks are offered as high as 35% to private Canadian companies with an R&D cycle at the core of their enterprize model.
As a result, companies can now afford to seek out very skilled developers and engineers to greatly help them develop new, disruptive products.
Changes may also be being made at the provincial level.
British Columbia, as an example, has established tax credits as high as 30% for folks and corporations that invest in eligible business corporations (EBCs).
Tax credits have also helped increase investor interest in many BC-based technology companies, permitting them to better fund their product development and talent pool.
As other provinces and territories opt to implement such techniques, there is a greater opportunity for tech companies to gain access to available funding and become more desirable to both home-grown and imported professionals.
There’s Still More to Be Done
These public and corporate initiatives are needs to make a difference in the development of Canada’s tech space, making it more desirable to potential employees both within and beyond its borders. However, there’s still more to be done.
To further incentivize growth in forex trading, Canada’s authorities needs to just take measures that help level the playing field between private and public businesses.
With the growing move toward public capital raising, the government has to recognize the worthiness of public markets. The government must make it easier for growth-stage companies to list on an exchange while still having access to publicly funded incentives like the SR and ED tax credit.
As well, the federal government should also reward investors for putting their hard-earned dollars toward local businesses, expanding the EBC program in the united states. These credits should be distributed around public businesses as well.
With these measures set up, there will be added opportunities for growth-stage tech companies to produce their mark in the room and provide attractive jobs to both local and international talent.
Given all the initiatives made to boost tech innovation and funding in Canada, it’s a great place for recent tech grads to build their careers.
By continuing to develop the innovation ecosystem with support from government programs and private investment — Canada can further create a space that attracts and retains local talent and benefits the economy.
Image credit: annie spratt, unsplash