Last year, Toronto was named North America's fastest growing tech market to the surprise of many. However, once you look into it, from low living costs to a highly diverse labor base, it all starts to make sense.
Here are 5 reasons why Toronto is soon to be the tech capital of North America.
Tech workers have been flooding to Toronto in recent years. Between 2015 and 2016 more tech jobs were created in Toronto than in New York and San Francisco combined! The city's job numbers were up to 212,500 by the end of 2016, which had already made it the fifth highest concentration of tech jobs in North America.
Courtesy Invest Ontario
However, matching this wave of talent moving to the city, it also boasts one of the largest populations of highly skilled and diverse locals. The quality of workers sourced from Toronto was scored at "very high" by the CBRE. According to that same report, 35% of overall growth in people completing tech degrees occurred between 2011-2015. Computer engineering degrees saw a 47% bump in this time-frame, too. This means companies can set up and feel confident in the fact that there will be a well of high-quality candidates to source from.
Low living costs
Another great thing about Toronto is the living costs. While in comparison to many cities around the world, Toronto is certainly more expensive than average, compared to tech hubs like San Francisco and New York, it's veritably cheap! For example, according to Numbeo.com, across the board, living costs are cheaper in Toronto than in San Francisco. Rent prices, for one, are a whopping 139.02% higher in San Francisco. This as undoubtedly has and will have a massive effect on young tech professionals looking for a city to call their own. This confluence of lower living cost and growing job numbers is an especially attractive prospect to a recent, debt-addled tech graduate.
Sometimes I look at Toronto real estate listings for fun. In this $900K house… THERE IS A TOILET IN THE LIVING ROOM, NEXT TO THE FIREPLACE. pic.twitter.com/tpLaJhyHni
— Kat Angus (@katangus) 4 June 2018
And these low costs don't just benefit the job seekers, companies also have benefits to garner. Due to a mix of factors ranging from the lower living costs to less competition, tech wages in Toronto are on average lower than almost every other North American city. On average, Toronto tech workers make around $82,000 per year according to the last CBRE report. Compare that to San Francisco where the average annual salary is around $123,000, and you can see the appeal for companies. And while this is set to rise in coming years, it is ideal for smaller companies and startups.
These savings are further compounded by the city's cheaper commercial space, which is currently around $59.17 per square foot. For comparison, about the same thing in Q1 of 2017 would cost around $84.91 per square foot in New York City. However, like wages, as the city continues to grow in popularity, some estimates have these prices increasing by up to 50% within the next three years.
New home for Artificial Intelligence
"Toronto is becoming a leader in producing world-class tech talent, particularly in the artificial intelligence field, and there has been an incredible rate of growth in our tech labor force in the past year." That was from Werner Dietl, former Executive Vice President and GTA Regional Managing Director of CBRE Canada. It was in 2016 that he said that, and interest and investment in AI has only increased since. The university alone had over 10 start-up accelerators then and with networks like MaRS, which have raised over $3.5 billion dollars since their inception, the area is ripe for innovation.
Christopher Mitchelitis (left) and Abishaik Ranpal (right) work on their model of a solid state AI. Courtesy Invest Ontario
There are also a number of very promising startups in the AI field which have garnered a lot of interest. Companies like Toronto's own Intergrate.ai which recently secured around $5 million in a seed round. This buzz also has the effect of drawing other established tech companies to the area who want to feed off this energy. Both Google's DeepMind and General Motors are opening up offices in the province, with GE planning on opening their self-driving research hubs there.
Progressive immigration policies
Canada has a developed a reputation as a country with very efficient and effective immigration policies. It was even recently noted that Scandinavian countries, which are usually held up as the ideal model for their ability to better balance economic efficiency with social welfare than most, looked to Canada to improve their immigration policies.
Unlike much of the West, where the focus of a lot of conversations about immigration revolves around the more negative aspects, Canada has long seen "immigrants as a resource". And while this mainly applies to skilled workers, Canada generally has a much more inclusive immigration policy. They currently have a goal of welcoming nearly 1 million immigrants over the next three years, which includes refugees as well as economic migrants. The move has been called "the most ambitious immigration levels in recent history."
A cultural hub of diversity
This is one of the greatest things about Canada in general. The melting pot that is Toronto, which is one of the most diverse cities in the world, means you are constantly exposed to different modes of thought. This is wildly beneficial in the tech industry which is constantly looking for the next big idea. All the fastest-growing economies are now in the developing world, with countries like India having invested a lot in computer literacy programs over the last few decades. They now have vast numbers of well trained, hungry professionals looking to innovate.
Courtesy Invest Ontario
Deeper than just being a country which allows immigrants to enter the country, Canada - Toronto especially - is the kind of place immigrants want to move too. Toronto's motto is "diversity is our strength" and it has been proven in studies (and by common sense); an inclusive, diverse community also tends to be a happier and prosperous one.