Canada's Pitch to Tech Entrepreneur: We'll Pay 80% of Your Salaries

Another 2x? 3x? 4x? Why make us guess? It's valuable info that helps inform people's decisions for the future.

Thank you for the datapoints.

Of course, it can be argued that there would be fewer jobs for them without it, so that is not to say that there has been no benefit -- it's just kind of hard to quantify. But it has not helped make salaries in Canada more competitive.

Isn't that the evening out factor, at least for new grads, for a job in say Toronto or Waterloo vs the valley?

I don't even live in CA/NY (so my gross pay multiple isn't quite as high, but income net tax/cost of living is pretty great) and there's just no comparison. I probably make 60-80% more total comp in the USA than I would expect in a major Canadian city, and that's not even accounting for higher taxes (depending on state/province), frothy Canadian real estate valuations, and higher consumer prices almost across the board.

But Canada sure is a great place to live and I miss it dearly. I still hope to move back one day.

Poutine is just fries, gravy and cheese curds where I'm from!

The comp rebate is nice, but not why we are in YVR.

I don't understand this. If the "average" engineer in SV makes 120Kish, then the same engineer is making 40K in Canada? And they can make 240K in NY (with no additional experience)?

Are those number correct?

If they are: I'd note that salaries in Australia are more closely aligned with SV salaries than Canadian. Just in case anyone is looking to move somewhere...

I don't think this is much of a valid criticism, since most people in the States can also move to SV/NYC and make 2x or 3x their current salaries as well. Hell, those cities probably have the highest numbers (so ignoring CoL) than most places in the world.

One of the reasons I'm bearish about NYC's future as a tech hub is that, although Manhattan cost of living is extremely high, engineer salaries still seem to have the $150k ceiling, except in finance. Which means you'll have plenty of under-30 talent but few long-term, highly experienced engineers.

I'm sure my cost of living is less. On the other hand, looking at the figures makes you feel a little undervalued.

There are 'hidden costs' to living in LA/California.

It just depends on what you prefer and where your priorities are.

I would love to move back to Vancouver, because when you consider gas (living close to work vs living in a suburban sprawl), property (yes, you get a bigger house here, but unsafe neighbourhoods are just around the corner, and bad air), quality of education (Canadian primary and secondary schools outperform American ones), then is it really worth the trade off?

For example, in LA, the concept of 'you get what you pay for' is truly taken seriously. You want the best? Get ready to pay thousands and thousands of dollars (more expensive than Canada, usually). If you just want mediocrity and barely get by, LA is super cheap, affordable, and you can raise 10 kids here, no problems.

EDIT: With regard to poutine, that looks like the fancy poutines you get in Santa Monica. Savages! All of them!

EDIT2: Added clarification

You must be from outside Quebec. Fresh cheese curds, (they'll squeak as you chew them), won't melt in the gravy, only soften a bit. Melted cheese curds means that they've been sitting in a fridge for a few days or more.

A few years ago a lot of stuff could be considered as work "between two uncertainties", including non-engineering work such as graphic design, but the rules are much more strict nowadays. I think they still give credits for things that are way too simple to be R&D (ie: normal problem solving), but we've been doing [small] claims for the past 3 years and the rules have been tightened a lot.

Also, doing a claim requires you to provide evidences that you were following a certain R&D methodology. It's definitely worth it, but it's a pain.

SR&ED will cover a percentage of capital expenditures essential to the work and a percentage of $ paid to contractors so it's salary plus SOME eligible expenses. Salaries make up the biggest part though. I got about 65% back, using the proxy method - a simpler way of calculating SR&ED overhead on eligible salary expenses.

The R&D effort does not have to advance "the world's" state of technology, just your company's.

It can't be obvious or routine engineering BUT work that is required to complete the R&D work (but not directly R&D) IS eligible and you can claim it.

The 3 core requirements of SR&ED eligibility (for software anyway) are (1) there has to be technical uncertainty, (2) you must use a systematic approach and keep records a notes and (3) you must achieve a technological advancement.

The 3rd item catches people because it doesn't require a successful outcome. You can fail and still claim the project. If you knew in advance (or it was obvious to anyone in the field) that it would fail (or succeed) then there was no uncertainty and it would not qualify.

SR&ED is really not that difficult to navigate. Consultants can help, but they'll take a big chunk of your claim. Most of them work for a percentage that runs anywhere from 15% to 35%. That's big money for very little value. I wrote my own claims for many years and they were all successful.

When I started there was no limit on the write ups, now they put some severe character count limits on the writes ups. That makes them harder for us but less confusing for the reviewers. You really have to be able to distill things down to just the essentials.

Any Canadian software company that doesn't at least look at SR&ED is just throwing money out the window.

They're similar to Canadian tax credits, but can give you up to 25-32% cash back, and are a fair bit more lenient on what passes audits (at least compared to the horror stories I've heard from Canada).

Feel free to get in touch with me to find out if/how you can get some of that in the UK.

It's also only on developer costs that are accepted and only on R&D work: none of the business costs etc are covered. In many cases these are just as significant or more.

There's also a reason that a consulting industry has started around it, it's a good amount of effort. Again helping more advanced companies as they can afford the costs for the 2+ year it takes before you can get it back. And again nothing is guaranteed.

Essentially it's not good for startups or smaller companies, it really only benefits companies of a medium size that were alreday going to cover this expenses by reducing some of their costs to increase them growth rate. But for a small company, less than 10 employees it's really hard to actually take advantage of the program in real life.

As an outsider in Canada I've been told it's easier to get foreigners to join startups due to how risk averse Canadians are, and what I've seen would tend to back that up.

What about access to customers and financing?

Actually it would take a lot less money than you would think to get many people to move to Canada and take a job offer. There's a whole world of immigrants out there who would love to move to Canada. They're mostly not located in California however, but east and south of Europe.

My opinion is that it's less about lack of talent and more about hiring being hard (in general).

I, personally, would have preferred to stay in Canada but finding a job is a right pain in the ass. American companies will fly you in on their dime, while Canadian firms won't even give you a phone call. It would even help if these companies were even offering competitive wages.

Local companies are not "big of a name" enough for career advancement (aka resume padding) and do not pay nearly as well either for entry level positions (50k vs 70/80k - taxes).

Furthermore I have heard of local startups that relocate or migrate down to SV for some period of time to fund raise or experiment before pivoting/failing/moving permanently to the US or their talent leaves during their time there.

What does U.S. talent have that's missing in Canada? Are the good ones really all moving away to where the money is? Or could it be that, despite all the available funding, Canadian entrepreneurs are less prone to risk training new recruits?

There's actually quite a bit of overhead in reporting on how your work qualifies as research, and it's gotten more strict in recent years. Apparently there have been cases in the past of things like restaurants claiming their chefs were doing research and such.

And winter isn't that bad, we only get -30C for a week or two in January!

Hey, if you want to talk to someone in Vancouver about the local start-up scene, why not shoot me an email? (It's in my profile.) I can ask my old investor if he's willing to hop on the phone and answer a few questions.

(I live in Vancouver)

That would allow the government, or anyone in its federation or confederation or otherwise under it in the hierarchy, to invest in startup businesses in such a way that favors local development and limits tax jurisdiction shopping.

If Chicago bought 15% of a new local company as Gov Class shares, it retains 15% of the value of the company and 15% of the profits, at the expense of tax revenues, even if the company moves to San Francisco. In that case, taxes would ordinarily drop to nothing, but as a stockholder, the municipal government retains its investment. But perhaps the State of California buys out City of Chicago to sweeten the deal. Chicago now has that money back to reinvest, instead of pissing away tax dollars to develop companies that just leave when they get big enough.

Of course, that assumes governments could be responsible investors, which is a proposition very difficult to prove. As it is, straight subsidies seem like a far stupider and more bureaucratic way to just waste tax money and enrich business owners without producing the intended effects. If the government is enriching the business owners anyway, wouldn't it be more cost effective to actually be one of the owners?