Small Cities Emerging as Tech Hubs In Canada Despite Toronto Dominating the Industry

The Canadian tech industry is growing fast with its cities emerging as tech hubs. Tech companies in some of Canada’s major cities such as Toronto and Vancouver are transforming the space turning the country into a major tech destination. The industry has managed to flourish because of the support from the government as well as Canada’s favorable policies. As a result, several US companies are setting operations in Canada’s emerging tech hubs.

Toronto leading the pack in tech in Canada

For instance, Vancouver has emerged as one of the tech hubs in Canada in the past five years, the city created around 22,300 tech jobs. According to a CBRE report on Canadian tech Talent Ranking, Vancouver emerged third in terms of tech employment.

Toronto is leading the pack as the largest tech hub in the country as other smaller cities continue to grow. In the last five years, the tech talent pool in the city grew by 54% while the smaller cities have also been growing tremendously. Interestingly both established tech giants, as well as startups, are driving the growth in the tech sector in Canada.

Besides Canada’s own tech companies such as Shopify (NYSE: SHOP), Slack technologies (NYSE: WORK), and BlackBerry (NYSE: BB) several US companies have set operations in the country. Companies such as Apple (NASDAQ: AAPL), Google (NASDAQ: GOOG), Microsoft (NASDAQ: MSFT) and Amazon (NASDAQ: AMZN) have all set offices in Vancouver.

Small cities emerging as tech hubs

Some of the emerging tech hubs in Canada include Oshawa, victoria, Hamilton and Guelph. The smaller cities are working with various levels of government, incubators, and ecosystems to appeal to tech companies. Differentiation has played a major role in attracting various companies especially US tech giants.

Equally, other small and medium-sized markets are emerging as tech hubs. This is because they offer tech companies bigger office spaces, large pools of untapped talents as well as operational cost savings.

US tech companies voice concern over new tax proposal

During the recent Canadian election, a digital services tax proposal was floated. With several US tech companies moving North they have voiced concerns regarding the proposal arguing that it will be discriminatory. Trade and industry associations indicate that the proposal imposes discriminatory conditions on the digital economy.

The Liberal Party promised during the election that it will ensure that foreign tech companies pay corporate tax on revenue generated in Canada. The party indicated that it will work to realize the standard set by OECD of ensuring that international tech companies whose products are consumed in the country collect and remit the same level of taxes as Canadian tech companies.

Several organizations such as the National Foreign Trade Council, the US Chamber of Commerce, the Computing Technology Industry Association and the Internet Association have criticized the proposal. The groups indicate that the proposal will undermine the investment of US tech companies in the technology market in Canada

The organizations are now calling for US ministers to engage those from Canada to discourage the implementation of the proposal.

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