SR&ED: I've said this before and I'm going to say this once again. It attracts fishy investors, clueless businessmen, lame business models (clone of X social networking site), and a sense of false success.
Immigrants: no, it's not their fault. But they're trying to survive. So when everyone is trying to survive, basic needs must be fulfilled first (food, house, clothes).
Supply > Demand in HR: People want to move to Vancouver (even people from the East Coast) to enjoy life. But the demand of jobs aren't that many. So you get people from everywhere who probably have 10 years of experience coming to Vancouver.
Supply > Demand in Products: Not too many people are willing to buy software or services. Probably because they don't care or they don't need it or because they want to save money to survive (immigrants).
Enjoy Life: Laziness. Get it done by 5, I want to go skiing/fishing/hiking. Forget unit-test.
Government Oriented: They rule around here. You know how it is with the government contracts and deals and whatnot. Man, even Government own and run online gambling website (http://www.playnow.com)
As you've said it before: disreputable gaming industry. Tons of online gambling companies based in Vancouver. I don't see the rate to go down at anytime soon, especially when our municipal just open its own. (see above).
Politics: due to fierce competition (survival) and/or laziness, politics is all time high. Ability to get things done go down significantly. Guess what's the hottest job in Vancouver? Business Analyst. Guess what they do (mostly)?
All these things created an unhealthy cycle. Suddenly people don't want to be an engineer or a developer. They all want to go to the managerial position.
One other choice is to move East to Toronto. There's better chance there, albeit not superb, but still way better than the West coast.