Does Canada Even Need a Technology Sector? | Hacker News Reader

Does Canada Even Need a Technology Sector?

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74 pointstechvibes62 comments

All of which begs a question: if our rare giants are doomed to fall and our startups are fated to exit outside of Canada, what sort of tech sector do we really have? More important, do we even need a tech sector?

Bad premise -- neither of these are foregone conclusions.

Plenty of "giants" from the past two decades have fallen on both sides of the border. There's no reason to believe a Canadian "giant" is "doomed to fall".

As for our startups being "fated to exit outside of Canada", there are plenty of examples of companies who are growing fast and seem to be in it for the long run (Shopify, FreshBooks, HootSuite, Wattpad). Some of these companies may ultimately exit to a foreign buyer, but each startup launched and exited is another shot in the arm for our burgeoning startup community, and I suspect that an increasing number of Canadian companies will be sticking around as this community grows.

I think the larger issue here is that there aren't enough of these companies to hire the best Canada-trained developers on a long term basis; the most talented end up leaving for greener pastures (usually US). When they stay they often choose to work remotely for a foreign company, or locally for a satellite office, rather than contributing more directly to the local economy.

"is another shot in the arm for our burgeoning startup community" still doesn't mean "tech sector" or 1.XB of R&D spending _Per Year_. These shots are but a drop in the bucket, and that is the point.

Long term entrenched growth what this article is pushing for.

>we as citizens have tremendously high standards of living and that is largely as a result of multiple other sectors—namely mining, foresty, and oil and gas ... Our population is but a fraction of America's, which places at an instant, permanent, and steep disadvantage

Interesting article. Canada has been made complacent by its existence as a resource colony. There are countries with small populations (Finland, for example) that manage to compete globally by using their brains and its great to see Canadian companies and VCs that aspire to that.

In addition to private tech startup funding in the US, the state funds a lot of tech through the "defense" industry. Canada's current government seems more interested in investing in prisons, however, than the tech sector.

Historically, Canada has never really swung wildly in any sector. Housing, tech, business, natural resources, etc. the only "dominant" is natural resources and it provides a nice base. But, the economic swings have been minor compared to here in the US.

Sure they have had RIM and Nortel which have both, basically, gone bust. Beyond that, I can't really think of any big Canadian tech company. A number of companies have/have had satellite offices in Canada -- Microsoft (Richmond/Surrey) and Nokia (Kanata) come to mind. But, the country, it's resources, and culture are pretty diverse -- BC differs from Ontario which differs from Quebec. In some ways, I feel the US is much more homogenous than Canada.

That said, I've known a few startups in Canada (mainly Vancouver) over the years. However, there hasn't been a critical mass. From my observation, Vancouver has more ties with LA (business-wise) than Silicon Valley -- more media heavy than tech.

I'm not sure complacence has anything to do with it, there just hasn't been a critical mass in any one area.

Vancouver is known as Hollywood North :). This happens probably due to tax-benefit/break and government support for the film industry (correct me if I'm wrong) that makes movie production cheaper in Vancouver.

And yes, there aren't many big hi-tech companies in Canada. Most of them are at most a few hundreds employees, which I supposed is big enough considering the ratio of population compare to US (roughly 1:10).

I can't imagine there's a hi-tech company with 1k employees in Vancouver. Very very hard. I don't think there's even a 1K (Canadian) company in Vancouver regardless of the sector.

EA Canada employs over 2000 people.

What's the % between FTE and contractors?

SAP has 1200 employees in Vancouver, at the former Crystal/Business Objects site on Mainland St.

There was (and supposedly still is) Corel, which in the mid-late 1990s, was one of the few companies to rival Microsoft & others for office & digital design/drawing/photo software.

Three years ago I queried Microsoft about working for them in Canada, and they said that all software dev happened in Richmond, and the people in Canada were just part of marketing. Maybe that's changed, or I talked to someone mis-informed, but if they are trying to hire Canadians, then they aren't publicizing it well.

This has changed. Microsoft has expanded their operations in BC quite a bit but I'm not actually sure if their Richmond office even exists anymore.

In 2007 Microsoft hired Don Mattrick, a British Columbian who long ago founded Distinctive Software, the company bought by EA which became EA Canada (Situated in Burnaby, develops FIFA, NHL and other games) and bought Big Park, a company founded by Mattrick. Microsoft's Xbox division then created Microsoft Game Studios Vancouver and expanded again just recently to create Microsoft Games Studios Victoria. Since 2010 Mattrick has been president of the Interactive Entertainment Business and lives in Victoria I think and so he's a booster for the area. Being so close to Redmond surely helps.

Microsoft Vancouver (no longer in Richmond for whatever reason) seems to be a "parking" space for people that are waiting to get H1-B.

Amazon Vancouver, on the other hand, seems to be here "for real".

Richmond was a 'typo' on my part. I meant Redmond. I was basically told that all Microsoft software development happened inside of the US.

Matrox essentially created all the technology at SGI and eventually ATI. And the first company to do Yahoo Search (what was that called? OpenSearch?) ... but you are right. We can count the companies without taking off our socks.

ATI would be another example. Of course, they merged with AMD.

Bought by AMD is not quite the same thing as "merged".

>Beyond that, I can't really think of any big Canadian tech company

Cognos (Ottawa). Acquired by IBM in 2008 for almost $5bln.

This whole "fraction of America's" crap is really uncalled for. Canada as a country is more populous than many European states that have been very successful on the international stage. Also America is completely eclipsed by countries like China and India that have far larger populations.

Does that mean America's at a "steep disadvantage" to China? For the last century America has done pretty well despite being so far behind in terms of numbers.

Actually China and India are approximately 4 times the US population while US is almost 10 times the population of Canada!

I think there is a Canadian tendency avoid risk. With the tech sector this means that if government funding is not immediately available, nothing is worth risking your own money. I'm reminded of one my history professors who used to say that the American dream was to start your own company and become wealthy. In contrast, the Canadian dream is to become a civil servant. There are exceptions of course but most of these people go to the US. It isn't just in the tech sector either. Look at the number of Canadian actors or singers that go the the US.

There was another good analysis in the CBC of Canada's next upcoming companies: http://www.cbc.ca/news/technology/story/2012/07/12/f-canadia...

The key question is not whether there ARE tech companies getting started in Canada, it's whether they will stay in Canada once successful to help re-invest in the industry here.

But the most common pattern presently is that companies leave before they get (legitimately) successful. Either via acquisition or the need for capital - both not easily found in Canadian cities as it can in SV or NYC.

"The key question is not whether there ARE tech companies getting started in Canada, it's whether they will stay in Canada once successful to help re-invest in the industry here."

I think that movement is changing.. Yes, it's harder to raise money up north but the cost for talent and gov funded programs here make Canada one of the most attractive places to start a company. Once established, why move down south?

> "Once established, why move down south?"

Later, and much larger, rounds of funding that is entirely unheard of in Canada.

Also, talent. This might be inflammatory, but I venture that the bulk of Canada's A-talent is already in the USA. Given the ease of the TN visa, I think it's not a stretch to say that if you're offering $70K for software engineers in Toronto, you are not hiring any of Canada's top talent, because they're all in the US making $150K+.

In my experience the few talented people who remain do so out of philosophical or family-related reasons, and that's a tiny, tiny slice of the overall pie.

> "I think that movement is changing.."

As a Canadian expat in the US I disagree. In fact, if anything, in recent years the brain drain of software talent from Canada to the US has increased as the software industry heats up down south. If your top players are consistently moving out of the country, it doesn't matter what government programs exist, you've already lost.

Talent is 95% of the problem. So long as US companies are offering fresh graduates $120K+ comp packages to live in sunny California, and Canadian firms have trouble ponying up more than $60K, the brain drain will continue, and Canada will continue to be scraping the bones of its own talent pool.

Definitely agree with this. I enjoy my work for a small company in Waterloo, but the compensation is definitely a pittance, and that aspect has frustrated me the entire time I've been there. We get a lot of government money too--- IRAP, SR&ED, OCE, etc, but the lack of a VC scene means we're basically stuck bootstrapping the company. Everyone's very wealthy on paper, but stock options don't put a roof over a young family.

We've stayed in the area for exactly the reasons you speak of---proximity to family, and concerns about US politics, healthcare, etc. But it's agony to look around and see so few job alternatives, especially when I've been invited on multiple occasions to apply for positions in the valley based on nothing more than a HN comment. sigh

> Also, talent. This might be inflammatory, but I venture that the bulk of Canada's A-talent is already in the USA. Given the ease of the TN visa, I think it's not a stretch to say that if you're offering $70K for software engineers in Toronto, you are not hiring any of Canada's top talent, because they're all in the US making $150K+.

A computer programmer/software engineer/software developer is not technically eligible for TN status. A 'Computer Systems Analyst' is eligible for TN status, but as an informal rule if your jobs involves more than 10%-20% coding you do not qualify for Computer Systems Analyst. While I'm sure many developers are working as a Computer System Analyst, they are at risk of being denied entry every time the enter the country if the USCIS official decides they do not qualify. So there are still significant immigration barriers that act to keep a good portion of Canadian talent in Canada.

Actually, it is not necessary for devs to be classified as CSAs - plenty enter under the Engineer classification (I've done this myself)

The CSA is a common catch-all, since USCIS tends to frown upon CS degrees using the Engineer title. But if you area a CE, EE, SE, etc, this is a straightforward path.

The barriers are not significant especially when weighed against the payoff, and consider that all of the major software firms do this so much that success is more or less guaranteed (e.g., if you are denied your TN at the border, the big shops will send a lawyer up to argue your case on your amended re-try). Most companies go so far out of their way to bring in Canadian talent that it greatly diminishes the systemic issues you're likely to experience.

TN1 is not really a viable option unless for very young out of school kids to try out their luck and gain a few years of experience somewhere else.

Anyone that has family or house in Canada would be crazy to uproot their family and go to the USA on TN1. Because the visa is for a limited time and has to be renewed by going back to Canada and re-applying just like you did the first time. And it is at the sole discretion of the person you are talking to at the border to either grant you the visa or not. And they don't have to justify their decision to anyone (there are quite a few horror stories related to this).

This pretty much means that someone with experience, making decent money in Canada, with house etc would be crazy to put themselves through that kind of additional stress and uncertainty by living in the USA on TN1. Besides, USA with its out of control gun culture, out of control politics, christian fundamentalism, and horrible health care is not really that attractive.

The TN1 is actually not hard to get at all, despite the horror stories that you sometimes hear, especially if your employer is one of the "majors" (e.g., Google, Microsoft, Facebook, etc), who will pull out the stops to ensure your visa works out.

For example, if you fail the TN application at the border, it's common for companies to send a lawyer up to accompany you the second time, to ensure success. It's expensive, but the big boys do it.

It's also not strictly necessary to renew the TN at the border just like the initial application: I've had TNs processed directly via the USCIS without difficulty, and the whole thing is done by mail, and judged by someone less temperamental than your average CBP officer.

Sure, systemically US immigration is really screwed up, but it's really not hard to get the TN, and if you're working for one of the known software companies, they will pull out the stops to guarantee success.

> "Besides, USA with its out of control gun culture, out of control politics, christian fundamentalism, and horrible health care is not really that attractive."

The vast majority of (desirable) software jobs in the US are in extremely liberal tech hubs like SF/SV, Seattle, New York, etc. This has always been a concern of mine, but it has largely not materialized.

American expat in Canada here. Agreed that the compensation is not as competitive as in the US, and the prospect of living in bustling NY or sunny Cali is probably quite alluring for Canadian programmers to boot. (Having moved from Texas, I'm not sure I could thrive in Toronto and am quite relieved that Victoria has lovely weather.)

That said, the Canadian system seems to be far less dysfunctional than its American counterpart. Perhaps the brain drain will diminish if political or economic turmoil continues to make the US less appealing for the liberal crowd?

Not to mention cheap, quality education drawing Americans and other foreigners into Canada (it did for me and I stayed after my degree was finished).

Any country needs tech sector because it creates not just jobs but nice jobs.

Jobs that pay well, for interesting work, in non-restricted environment. To get whose you don't have to sacrifice your soul to mindless institutions nor be eager to consume bullshit. Jobs you can just work.

What else gives you that? Therefore, tech jobs should be priority #1.

I love me some tech employment as much as anybody that frequents hacker news, but this just looks like tech bigotry to me.

The attitude that "all other modes of employment suck, therefore tech should be #1" is not going to gain a lot of traction outside tech circles.

Well, isn't it true?

Tech means you create value -- you are "your own bitch". And you do it in non-strictly-regulated area. It's not even all tech - telecoms aren't, for example.

What other areas of employment generate jobs like these?

Think of these acquisitions as a warm-up for bigger things to come. Let's see what these lucky entrepreneurs do with their money inside Canada.

What's more shameful is that RIM didn't produce millionaire entrepreneurs that went on and created new companies. That could have happened and should have happened, but it hasn't happened.

A positive side benefit has been significant endowments and support of basic scientific research.

e.g. http://www.perimeterinstitute.ca/

However, it's even better if RIM had created an ecology of entrepreneurship that could endow dozens of such institutes...

RIM didn't create an ecology of entrepreneurship because it already existed in one. It was part of the start-up community that has come out of the University of Waterloo.

Fair point, but it was probably the biggest success story out of the area and as such was the flagship. (Responsibility to give back and all that.)

RIM is not a technology sector. There are plenty of Canadian technology companies working in areas that aren't considered sexy in Silicon Valley. Modern resource industries are highly technical. For example, most of the R&D required to extract crude oil from tar sands was carried out in Canada.

This is most certainly splitting hairs - by technology they clearly meant software. There is a lot of technology involved in just about every other sector, but we don't classify SynCrude as a high-tech company for a lot of reasons.

Canada's software industry is anemic at best, arguably non-existent at worst. You have a few shops working on cool stuff, but the bulk of the code being written in the country is for institutionalized non-software companies. What is made worse are the apologists who will point to the tiny, struggling, barely surviving "cool" shops and insist that everything is fine.

Not to mention even if said cool shops were thriving - and few are -, there aren't nearly enough of them to hire, say, the 5000 workers that RIM is about to let go. As of this writing, StackOverflow lists:

- 31 jobs in Toronto; - 4 jobs in Montreal; - 2 jobs in Ottawa; - 2 jobs in Vancouver.

These cities account for probably more than 60% of the Canadian IT workforce.

Contrast that with: - 28 jobs in Austin; - 91 jobs in Seattle; - 55 jobs in Boston; - 143 jobs in SF; - 170 jobs in NYC.

There is something very wrong with this picture, especially when you consider that Canadian universities produce a huge number of CS/CE/SE graduates every year.

Many Vancouver software companies do not post jobs on SO. Most of them do it via recruiters (let's leave the discussion about the positive and negative dealing with recruiters for some other time).

It's a tight-knit industry in Vancouver.

Repeat the same exercise on Monster (for example), where recruiters, Canada or US, do post jobs, and you will find that the disparity is even more pronounced.

I see your point there but I think the situation is a little bit different when compare to Monster.

I was reluctant to go to recruiters at first but once I got to know one or two recruiters with better networks, I definitely see more opportunities that may not advertised front-and-center out there.

Vancouver is in the middle of hiring spike this year and I can assure you that there are quite a few interesting jobs on the market right now.

I know that in your comments below you mention that SO is only one of the places that you're using a data point, but given that the US has roughly 10x the population of Canada, a job offer ratio of approximately 1:12 isn't so bad on per capita basis.

But you are still right in the underlying sense that the US is a big allure for new grads and for many of the RIM workers that will be let go.

The only problem is that now there's going to be a bit more competition down south because thus far this year 50K+ planned global tech sector job cuts were announced (30K HP, 10K Sony, 10K Nokia)[1]. Of the global total (most announced over a 3-year period), it's hard to say how many of those jobs will impact US employees, but it's a fair bet that there will be some expansion in the tech sector talent pool soon if you're looking for applicants.

[1] http://news.cnet.com/8301-1001_3-57473046-92/tech-layoffs-hi...

> given that the US has roughly 10x the population of Canada, a job offer ratio of approximately 1:12 isn't so bad on per capita basis.

Seattle doesn't have 10x the population of Vancouver, and Boston doesn't have 10x the population of Montreal! Those should be 1:1 comparisons.

Most tech companies in Kanata, for example, do not list on SO. If you can write C for embedded devices there's a large number of jobs in Ottawa. I recently left a job doing that in Kanata and turned down 2 job offers before getting hired at Shopify.

"Most tech companies in Kanata, for example, do not list on SO"

I think that is true of most tech companies anywhere. SO was just one point of comparison. The point is there seems to be a lot more jobs in the US in quantity and variety, and I think this disparity paints an unpleasant picture given the number of tech workers that are trained in Canada.

True, but enterprise and edu account for roughly 90% of total R&D in 2011 [1]. One look at the list will show you how much of 'high-tech' R&D was attributed to RIM alone[2].

But what of the Tar Sands though? Looks like the total R&D for Imperial was only 7% of what RIM spent.

[1] http://www.statcan.gc.ca/daily-quotidien/120113/dq120113d-en...

[2] http://www.researchinfosource.com/media/2011Top100Listsup.pd...

There's a ton of cool stuff happening in Silicon Valley, but it's goofy to claim that the unique historical context of the valley is exportable. There isn't one technology industry any more than there is one manufacturing industry, and a blinkered conflating of "small debt-financed web startups" with "software" doesn't lend any clarity to the conversation.

NB: I'm moving to Canada from Silicon Valley.

What is a technology sector? Apparently it includes everything from manufacturing cell phones to "Real-Time Feedback and Coaching" (Rypple)

Is the implication that if Canada isn't Silicon Valley, it should stick to resource extraction and non-technology manufacturing?

What do you think the tech sector is?

As an Ex-Ryppler (intern), they were (are) definitely a tech company. I'm not sure what your question asks?

This article started with a tough question but ended on a cop out. The conclusion is why tech, or even just plain manufacturing, would be nice to have. Yet it is not an argument for necessity or competitive utility.

As a programming Canadian I can move to America with relative ease. Even if Canada had a tech sector I would still have to move many hundreds of kilometers. If I'm already moving across country away from home I must ask, what can a Canadian city offer that Silicon Valley cannot?

Not a whole lot. All of the money, culture, and innovation in technology is happening outside of our borders. With few notable exceptions you will find Canadian start ups tend to follow industry trends rather than make them. The salaries are rather anaemic and the jobs are not terribly interesting. On top of that most Canadian tech start-ups are forced to consider the first exit they can get by their conservative backers. Why would you even consider a Canadian company?

(disclosure: I work for a Canadian company.)

I do wonder about one thing, and this is an honest question. Do the cultural content and language requirements get in the way of startups?

Its stories like this http://www.cbc.ca/news/canada/story/2012/04/06/target-canada... that make me wonder if this would be an issue. Would youtube, if started in Canada, have been impacted?

I believe that if you go national in Canada you will be expected to provide a French translation of your site. That was the first I'd heard about Ottawa being interested in the ratio of cultural content outside of radio & TV programming, but it's not that far of a stretch.

However, I'd opine that it's not that much different from (eventually?) offering Spanish or other significant immigrant/minority languages on a site in the US. You may not be under any legal obligation to do so, but it would certainly make sense if you're trying to expand into different demographics.

There is no requirement to offer French outside Quebec unless you are federal govt.

Occasionally the govt gets a committee up to consider Canadian cultural content but it's mostly to keep the media happy - it never gets as far as affecting any business.

There is no legal requirement for a startup to provide bilingual content outside of the tv/radio sphere. Legally Youtube would not have been effected if it had started in Canada. That being said if you are an english-language startup and you wish to enter the Quebec market there is a general social expectation that you'll offer your content in both official languages.

Target's case is a bit of an one off exception as it is an american company who bought a Canadian retailer.

This is a really fascinating article about an interesting topic, but he spends around a dozen paragraphs explaining the background, and only talks about his answer in the last three. Would have liked to read more about his opinion.

In the US the government doesn't care about the tech sector, except perhaps military. You can't help feeling that the Canadian govt is actively trying to kill it.

Startups don't fund politicians and young people in tech don't vote. So given a choice between rebuilding a burned down mill in a town where pine beetle have eaten all the trees or supporting tech startups in Vancouver - you have to look at where the votes come from.

So cancel R&D tax credits and use it to subsidise uneconomic fishing and forestry.

Oil and mining are probably OK - they make party contributions. But even then the fed govt is killing us. An international mining company I worked with was planning on setting up it's R&D headquarters here - (mainly because it's easier than the US). It takes 5+ years to get an immigration visa for a mining engineer and their family then it takes 5+ years to get citizenship once they are here. You can bring in fruit pickers or rig hands on a "skilled workers" temp visa instantly of course.

In the end the company moved it to Australia, comparable cost and standard of living - but 1year visa process and 1 year to get citizenship.

>"Startups don't fund politicians and young people in tech don't vote."

Good points. Both easily solvable.

If the startup has the same sort of money to throw around as an Enron or a BP. And if all the programmers live in a small town so that a significant proportion of the electorate there relies on the startup.

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