Canada has benefited from a remarkable explosion in tech talent in recent years. Venture Capital Journal’s March-April cover story reported on net inflows of talent into Europe from other parts of the world. The notable exception was Canada, which drew 2,200 tech workers from elsewhere in the first nine months of 2023, compared with 1,500 it lost to Europe.
That’s largely due to the reputation a few artificial intelligence research institutes have been gaining, with the help of Geoffrey Hinton and Yoshua Bengio, machine learning pioneers who are recognized as two of the three godfathers of AI. Hinton, a professor at the University of Toronto, is co-founder and chief scientific adviser of the Vector Institute, while Bengio, at the University of Montreal, is the founder and scientific director of the Montreal Institute for Learning Algorithms, as well as the scientific director at IVADO, a Montreal research and training consortium focused on developing responsible AI.
In 2019, Hinton, Bengio and New York University professor Yann LeCan shared the Turing Award, regarded as the equivalent of the Nobel Prize, for their work on neural networks. “These are world-renowned AI faculty that attract talent from around the world and also massive Fortune 500 companies to install [operations] here,” says Katy Yam, a partner at Real Ventures and managing director of its FounderFuel accelerator in Montreal.
Other Canadian AI institutes include Alberta Machine Intelligence Institute in Edmonton and Scale AI, a consortium of private entities, research centers, academia and high-potential start-ups, in Montreal. “They’re all driving AI intelligence, knowledge, research and partnerships across the Canadian ecosystem with start-ups,” says Chris Arsenault, founder and managing partner at Inovia Capital.
Quantum computing has also become significant in Canada, underpinned by the Canadian Institute for Advanced Research, an arm of the government that has been investing in university labs for more than 30 years. Also recognized as global leaders in quantum technologies are Perimeter Institute Quantum Intelligence Lab in Waterloo and the Institut Quantique at the University of Sherbrooke, says Yam.
“I believe that the Montreal, Toronto, and Calgary AI researchers are thrilled that they can stay in their chosen city for quality of life and have access to the top minds in the world,” says Thomas Birch, a managing director at CDPQ. “The PhD candidates can walk down the hallway and have a chitchat with Yoshua Bengio. So, they’d rather be close to their research hubs than to the companies. If they can be close to the research hubs in Montreal, Toronto and Calgary and also have access to working for a California-based software company, or a Toronto- or Montreal-based software company, they can keep their research up and actually have a decent-paying software opportunity working remotely or locally in Montreal.”
As one of the two fastest-growing tech centers in North America, Toronto is turning out 65,000 science, technology, engineering and math graduates per year – another draw for companies from around the world, says Stephen Lund CEO of Toronto Global, which helps foreign companies set up operations in Toronto. Last year, Toronto Global helped Unilever establish its global AI lab there, beating out 15 other jurisdictions.
He notes that the country has “pretty aggressive immigration strategies where we’re able to bring talented people from around the world into Canada.”
Foreign workers find it much easier to come to Canada than to the US. Companies that set up in Canada can do intercompany transfers from abroad on a one-year renewable contract, and applicants to Canada’s Global Talent Stream program can be processed within 10-30 days. Six months ago, the government opened a new talent stream and promptly shut it down after it was overloaded with 10,000 applications within 48 hours, Lund says.
His company has also helped bring in 400,000-500,000 foreign students who can work in Canada for up to three years after graduation, putting them on a path to permanent residency. The 35 percent lower exchange rate in Canada also makes it less expensive for US companies to hire Canadian tech workers, who can either work remotely or in facilities that the companies build in Canada, says Yam. Under another government program, companies can recruit interns at half the cost, with Canadian taxpayers covering the remainder, Lund notes.
While all of these resources have made Canada a magnet for talent, its benefits don’t necessarily accrue to Canadian start-ups, which are now competing with big tech companies from the US and elsewhere, which can drive up their costs, say John Ruffolo, founder and partner at Maverix Private Equity, which invests at the nexus of late-stage venture and private equity in companies that are either EBITDA-flat or positive.