BlackBerry Inventor Says Canada's Challenge Is Keeping Techies
bloomberg.com
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I'm so tired of hearing this complaint.
This is often stated as a problem, but the simple fact is that people can move to almost any other developed country and make as much or more than they would make in Canada.
Canada doesn't have a problem with talent exodous, they have a problem that Canadian employers are stingy and then complain when all they have left are people willing to settle for half they'd make in the US, or 2/3rds of what they would make in Europe. [0]
Here's a free tip for any Canadian employers reading: want to have Silicon Valley level talent at your company in Canada? Open your wallet. People are more than happy to stay in Canada if you pay them what they're worth.
[0] Anecdotal evidence, I'm Canadian, living and working in Europe. I make as much as people 10 years older than me make in Canada. Taxes are similar, cost of living is similar, social benefits are similar, and 5 weeks paid vacation (real vacation, not PTO).
Many of the Israeli startups are structured as dual US-Israeli companies with sales and marketing in the bay area and R&D in Tel-Aviv. Canadians could pull this stunt a lot more easily, since the geographical distance timezone and culture are much closer to the bay area.
I'd also wager it's harder for consumer-focused companies to take off in Canada: geography and our small population work against gaining scale. It's much easier for a US company to gain scale and move North. To do the equivalent, a Canadian company would have to learn to become global fairly early.
Oh, and, apropos of nothing, Canadian management talent is poor.
However, on the ground, tech professionals are 'forced' to start up their consulting companies, get hunted down by taxes, threatened daily with outsourcing initiatives (extremely low caliber), and have no prospect of career advancement. Either this or accept a meager pay.
Why wouldn't they look elsewhere?
Canada is a joke when it comes to software salaries. For the last 10 years, you'll get $110K tops as a senior dev. In 2009(?) I had an offer for $110K. Last year I had an offer for $100K. Haven't made a Canadian dollar since 2007, but figured I'd try.
If anything, Canada should be an offshoring panacea. We are among the best educated, most creative, stable countries in the world and our developers are stupid enough to work for peanuts.
Yup. I moved to Europe directly after my undergrad and was offered the equivalent of 90k CAD for a junior position. And I was entitled to 20 days paid vacation per year, by law. Not Paid Time Off (PTO) like they have in Canada.
Get sick? Go to the doctor and stay home. It's not vacation (since you're sick) so you keep your vacation days. I've heard if you get sick while on vacation you can reclaim the days, though that's never happened.
I've thought about moving back occasionally. But if I took my current European contract to any Canadian employer I'd be laughed out of the interview.
Besides, it's nice here. Nearly the whole continent is <3 hours away by plane, so there's always somewhere new and interesting to visit with your copious annual vacation ;-)
I eventually ended up in a small university town on the east coast. Great combination of low cost of living, walkability of the town, many cultural events, and other things that allow a small town to punch above its weight in terms of general activity and things to do.
I'm generally surprised, looking at the cost of living in some Canadian cities, like Toronto and Vancouver, that more people don't seek out interesting towns with lower costs of living--especially for remote workers.
All the numbers you quoted are for mid tier in SF. Yes cost of living is higher here, but the salary taps out quite a bit lower.
Three of my colleagues own houses in San Francisco. Multiple of others own homes in Oakland or San Mateo. None of us are very special people, in other words just normal ICs and people who work hard, but not endlessly.
To work as a Senior Dev in Toronto means topping out at 160k. To work as a senior dev here in SF means starting at 210k and only going up from there. That's more than cost of living differences can cover.
As far as I know, for all domestic students tuition is still free (unless it's a private university).
In my experience compensation in the US (comparing major cities to major cities) is 2-5x higher than in Canada. I'd hazard a guess and say I'm right now making 4x what my job would be paying in Canada.
Another big problem is that cost of living continues to rise in Canadian tech hubs - Toronto, Montreal, and Vancouver are all astronomically expensive relative to compensation, and costs continue to rise rapidly. Despite some upwards movement in recent years in tech salaries, the COL increases have often outpaced it.
To Canadian employers who are serious about reversing the brain drain: you have to find ways to pay talent more, everything else is just details.
I'd love to come back to Canada and pay taxes to Canada instead of the US.
But won't happen unless the $ is there.
You should be making in between £500 and £700 per day.
It's not that bad.
Best offer just prior to moving was £45k but that involved a move to London which would have hit my bottom line more than just staying put.
Toronto rents are about half London and other living costs are lower (electricity, transit etc).
As of March 2019 the UK won't be Europe anymore ;-)
There doesn't seem to be a huge difference in salaries between Germany and Canada, at least on average.
https://www.daxx.com/article/it-salaries-software-developer-...
Salaries vary wildly across Europe (and probably across different areas of the same country), if you get to choose, move to Switzerland :)
It doesn't, but it does have implications for visas and freedom of movement between the UK and continent.
> if you get to choose, move to Switzerland
Sure, I hear salaries there are amazing. But have you visited? It seems the cost of living is INSANE.
As far as I can tell, all of the money in Europe is either in Switzerland, or in contract work which is pretty much the same situation Canada is in, just replace Switzerland with the US.
It depends on the location. That's probably about right for Berlin, but would be ridiculously low in Frankfurt/Munich/Hamburg/Köln. If you want a better idea of salary ranges, check the expat forum Toytown Germany. [0]
It also depends on the company and your negotiating skills. I've had job offers in the low €50k from companies in Berlin for a normal position.
> Ignoring currency conversion
Why would you ignore the currency difference? The Euro buys you a lot more than the Canadian dollar does, even factoring in higher VAT in Europe. I also find the cost of living is lower in Germany than in Canada. Food is certainly much cheaper, and my general impression is that housing is also cheaper (to rent).
€50k = $72k CAD
You probably won't make this as a junior developer in Canada, and if you do, it's probably somewhere like Vancouver or Toronto where the cost of living is very high.
From a visa perspective, it's so freaking easy. Take a copy of your university degree, and your employment contract from a German company.
Go to the Foreigner's office (Ausländerbehörde) and get a work visa or Blue Card, depending on your salary level.
Took me 6 weeks to get a work visa. Total cost was around 150€.
From a cultural perspective, it might be difficult. There are a lot of companies who will hire people with only English (especially startups, though expect less money) but the society is very German.
The language isn't terribly easy either, so you'll probably have to invest in language courses to learn it. Unless you are very self-motivated and good at self study.
If you're American though, things get a lot harder. Lots of banks here won't deal with you because of FINCEN/FBAR, and you have to file IRS taxes every year (and from what I hear from friends, they're too complicated to manage yourself). It can still be done, but is more difficult due to taxation requirements.
That's not how prices work. Labor isn't a consumer good, wages aren't determined by the employer, they are determined by the goods they're eventually producing which the end user or consumer is willing to pay. If they pay less than what end user is willing to pay, then they lose labor to competition, if they pay more, than the increased price of the final good results in consumers going to the competition.
Canadian employers can't control the fact that their consumers don't pay higher prices for the things they producing/providing.
I disagree with your logic, because:
1. Multinational companies pay Canadian engineers doing the same quality of work much less than American counterparts. The original article is from the former CEO of BlackBerry, a multinational company which could pay Canadians an equivalent salary, if they chose to.
2. Canadians do pay more for things than Americans do. Do a currency conversion from CAD to US and products sold in Canada (e.g. iPhone) are still significantly more expensive than US prices. We joke this is the "Canadian tax"
So tell me why don't multinational companies pay less to their American engineers, the same as their Canadian engineers?
> Canadians do pay more for things than Americans do
I oversimplified when I said "paying higher", it's more about profit margin. So lets say if a market is located in a much more geographically difficult area then people of that market could be paying more, but still that wouldn't result in higher profit margins when compared to a market which is easier to access.
These restrictions could be geographical, economic, political, regulatory, etc or a combination of these.
Because their American engineers would get better offers from other companies and leave?
I think it's pretty simple: Canadian companies feel like they don't have to pay American market rates for people, when Canadian market rates for the same position are much lower. They can't do this AND complain that employees are being poached by American companies who pay them more.
Either accept that by paying "market rate" in Canada you're in real danger of having employees leave to work in America, or pay your Canadian employees an equivalent salary to what they would make in America and they're far less likely to jump ship.
https://github.com/bsurmanski/TorontoSFTax
Torontonians pay less tax for income up to 200k. Note: I also did not include the SF 1.5% income tax in the comparison.
And then look and see if the taxes are actually higher in Canada.
It's way different if you're in Alberta (flat provincial tax) vs NY than for example Quebec (biggest tax burden in North America) vs FL for example. Those things do need to be considered.
In my case, the difference between Quebec and <insert any state> was a no brainer.
However, attempting to switch jobs, I find the gelid pace at which recruitment works here incredibly frustrating. People take weeks to reply. Sometimes they don't reply at all. When I visited SF I got offered an interview + a job in a single day.
Companies need to pay more, but currently they're failing at more than just that.
I've noticed from experience that IT is seen as a cost and not an investment. A bunch of costly nerds that you can easily replace by outsourcing for $5/day.
People are also not aware of the price of working with software.
I gave up doing local freelance work because I had to educate every single client that their totally custom and complicated project would cost them more than $500 and that it would probably go above $2000.
Luckily, one can still find some interesting work. You simply have to look very hard.
Is the view of IT being seen as a cost an East Coast Mentality though? Stemming from the days of Arthur Rock not being able to get any investment money in New York.
The West Coast has always been more of a 'dream land', where even far fetched ideas could see the light of day vs. here in the East Coast.
On another note, I heard rumours that the Liberal Government may tax small corporations (up to $300k a year) as much as personal income?
But to preface - the tech industry in the US is highly bimodal. You have high-paying "elite" dev jobs largely centered around major tech hubs, at VC-funded startups and BigCo tech companies... compared with dramatically less well-paid tech jobs elsewhere in the country or in less prestigious firms.
For the sake of the argument we're really talking about the former case - I think if you look at the numbers for the latter group, the salary difference between US and Canada is dramatically reduced.
Elite tech compensation in the US is largely driven by big, highly profitable companies: Google, Facebook, Apple, Microsoft, etc, all come to mind. These companies compete aggressively with startups and each other for talent, and compensation at these companies have risen dramatically over the past 10-15 years.
These companies have intensely fat margins, and are immensely profitable, giving them more latitude to pay more. These are the kinds of companies that can give everyone a blanket 10% raise without breaking the bank (see: Google, a few years back).
Startup compensation have also increased dramatically in the same time period - but IMO that's largely due to pressure from BigCo comp packages. They are competing largely for the same talent pool, after all. Despite their relative lack of profitability, startups are able to compete in the market due to the availability of VC funding.
Given that, let's translate to Canada, where we can make a few quick observations:
- There are no Canadian-born equivalents of Google, Facebook, Apple, Microsoft, etc. There is a lack of institutional tech companies that are highly profitable. This eliminates a huge source of upwards wage pressure. Blackberry looked like it would become such an institutional employer for a time, but obviously that's no longer the case.
- There is comparatively very little VC funding. There is less total money, but also funding rounds tend to be dramatically smaller. Investor risk aversion also appears to be dramatically higher in Canada than the US. Even if there were institutional tech companies driving up wages, it's unclear that Canadian startups have the money to compete.
- The general availability of US work visas for Canadian nationals means that Canadian engineers largely can join the US labor market without too much trouble. This has caused US companies to hire vast amounts of Canadian talent to work in the US, effectively causing them to join the US labor pool.
The net result is that the Canadian tech scene looks something like this:
- There are a number of satellite operations of major foreign companies (see: Google, Amazon, Microsoft), but because of lack of local institutional tech employers driving wage competition, compensation remains low. Portability of Canadians into the US also means that anyone who dislikes this setup can just move to the US (and they do, in huge numbers). The satellite operations are intentionally there for the cheaper labor. For the companies it makes sense: they capture all the Canadian labor that is willing to move south, and they capture all the Canadian labor that wants to stay put (at a cut-rate price).
- There are Canadian companies, but largely they do not enjoy the vast profitability of the major American tech cos, and so have little means to really engage in competition with each other anyway.
- There is some pressure from the US labor market, but the lack of profitability for tech firms in general, combined with lack of funding, means that Canadian firms can't afford to compete with the likes of Google and Apple, even if they wanted to. Wages have risen, but not by a significant enough amount to narrow the gap.
We don't like paying a high compensation to employees so we are asking government to screw with the labor market supply so wages go down.
It's hard for Canadian employers to pay similar wages to other countries for a variety of reasons. Most of them are completely self-inflicted: things like reliance on SRED to recoup salary costs (a program that's gotten increasingly hard to qualify for, but as a retroactive program, devastating when not won), priority selling into Canada as opposed to going global, etc.
The variability of the Canadian dollar is another huge factor. It shifts around; leading to boon and bust against the US for compensation. When I left Canada, it was at par, making $110k very competitive in the US nationally (if not in the valley). It's obviously not there now!
The funding/exit end of things is the other big challenge. A huge chunk of the "Valley Salaries" are RSUs from pubcos, options from startups, etc. It's a chicken and the egg scenario that would be familiar in any secondary market in the US; valuations are low, leading to low exit multiples, meaning that even founders who exit often don't get life changing returns, before we even get to employees. This means that options are discounted entirely in the compensation structure.. making people more reluctant to give them out. It's a bad circle.
- raise your family in a safe environment
- not seeing crazy / homeless people in the streets
- being able to buy a house
- health insurance
- public transport / traffic
ect ...
As for that other stuff, it really depends on where in Canada. Don't tell me that the public transit is great everywhere, because it isn't. Canada was built on cars. Some cities, like exactly only Vancouver, Toronto and Montreal have good public transit. Many do not.
BTW the amount of homeless people sleeping on the streets in Toronto was a little surprising to me.
Vancouver has the same real estate market as SF. Good luck buying a $1.1m on a $105k senior Dev salary.
As for health insurance, the system works if you have a good job with good benefits.
That's kind of an important "if", though. My mother had a menial job when she was diagnosed with lung cancer and I wouldn't have been able to cover her with my health insurance. She unfortunately passed away but at least the attempted treatments didn't cost us anything.
What do you do if you lose your job and suddenly fall severely ill? Return to Canada?
Besides, the real issue in the US wasn't becoming sick, but becoming chronically ill. That was the big problem with no escape, but ACA has helped reduce that problem.
- Average detached home price in both markets is well above $1M CAD.
- We have our share of homeless people (admittedly though, they are of the polite variety for the most part)
- Public transport/traffic is a joke in Toronto. Absolutely laughable.
That would be a refreshing change from the crime-ridden dystopia of Redmond, WA. /s
- not seeing crazy / homeless people in the streets - being able to buy a house
Let me guess, you live in eastern Canada and have never travelled to Vancouver.
Look, you don't get to cherry-pick one small area of the U. S., an area that pretty much all agree has it's own unique problems, and then compare to all of Canada. Canada has its problems, too, as I point out above. In fact, were one to compare the Bay Area with Vancouver, I'm taking the Bay Area. Better pay, cheaper housing, and no more or less observed homeless than Vancouver. "Yeah, but what about $RANDOM_MANITOBA_TOWN?" Yeah, and what about Indianapolis, IN? At least in Indianapolis, if I lose my job I can go find one tomorrow at another insurance company. It won't be glamorous, but it'll pay the mortgage. Outside of Vancouver or the Toronto area, what am I going to do if I lose my job in Kelowna?
Canada is a lovely country, and I have made a concerted effort to take the steps to immigrate. But in the end, I'm still in the U. S. where I will probably remain. Canada can hand-wave all they want, as you have, but that doesn't fix the problem. Quality of life (which is arguable to begin with) takes a back seat when the mortgage needs to be paid.
When I first visited Vancouver in 2014, there was some woman hitting herself and crying on the bus, and I saw plenty of homeless people.
Other young technical people must be making similar calculations.
I would move back immediately if my family wasn't here in NYC. People have really lost their minds since the election and I'm tired of only ever hearing about politics.
I do agree that a lot of Midwestern suburbs are horribly depressing and conformist, but there's a lot more to the Midwest.
Bike rentals are downtown although I have never used them provided by the city.
I don't seem to have a problem with the burbs like some do. Maybe I am used to it. I like having wide open spaces. I don't like people piled up on top of me. And I like having a car. I can go anywhere. I can head to Branson for the weekend or Omaha. I can even skate out to Colorado if I wish. I'm not stuck taking the slow AF Amtrak or a bus (shiver), car = freedom.
There is no reason that American suburbs are so hostile to walkability. It's very bad for human health (lack of movement and all of the air pollution that cars cause). And of Course sprawling, car-dependent lifestyles are horrific for the planet.
I live and work downtown Toronto and see plenty of crazy and homeless people each day. Especially around my condo in one of the busiest areas in the city.
The real problem facing Canada is a lack of coherent, fact-based innovation policy. We have an innovation tax credit that is proven to be the most inefficient in the developed world. Companies love it because they get free cash (the program is also known as the "free money" program). As someone who has worked in tech in Canada I have never, ever heard anyone say that the credits made research possible. This is work that was going to happen anyway.
I recently heard Perrin Beatty from the Canadian Chamber of Commerce speak. He argued that the government should no longer conduct long-term pure research but should switch to improving incremental innovations because that what companies need. Mr Beatty, a life long politician who inherited his wealth, made it clear that he doesn't have a clue about industrial R&D or the incentives underlying the different players. (Obviously, I've chosen a side in this debate...)
As a Canadian this upsets me because there is a long history of poor government investments, and putting political agendas ahead of economic ones. I have a feeling that in four or five years the current feel-good story will end with a lot of money spent but not a lot of actual money made. Or, more typically, Canadian mid-sized tech companies sold to foreign buyers.
In short, there are many things governments do very well here. Industrial policy does not seem to be one of them.
I forget how many thousands of dollars we got for that piece of paper. It wasn't that much, but still outrageous.
Doing R&D to bake better bread? Check! Trying to make a better newsletter online? Check! (Not kidding!)
Look for your local SR&ED consultants and see if you can get a map of where they are located. Then tell me this program isn't a huge waste of money. There are a lot of people employed in the job of making companies look like they are innovative...
Don't even get me started on these tech hubs. Yes, they are important but they have a vested interest in getting companies through them. To date, there are very few statistics on dollar value invested and actual returns. i.e. there is no hard data supporting these hubs aside from anecdotal evidence. Lots of public money gets invested in them though.
But what about regular IT development work for fortune 500 companies ? Are salaries comparable ?
There, now you don't have to read the article.
Sr. IT Analyst (DBA/developer) / Large Utility / 120k (115k base + premiums for on call rotation, OT)
Junior Developer / RIM / $70k base (didn't stay long enough to get any bonuses)