Toronto tech firms seeing more interest from U.S. job seekers — and not just because of Trump

Technology leaders say Toronto's growing momentum is a chance to 'reverse the brain drain and prevent it altogether' by attracting and retaining top talent.

Tech leaders see chance to 'reverse the brain drain'

U.S.-born Kiki Adams praises Toronto's vibrant tech-startup scene, having recently moved to the city for her dream job in the artificial intelligence field. (CBC)

Last month, Roy Pereira, CEO of Toronto startup, received so many applications for a software engineering position from U.S.-based job seekers that he thought they were fake. 

"I thought it was maybe bots spamming us," he remembered, noting only about one per cent of the company's past applications had come from the States.

The applicants he interviewed, many of whom were living in Silicon Valley, praised Toronto's tech scene and expressed doubts about how they'd fare under the mercurial immigration policies of U.S. President Donald Trump. 

"A lot of them were visible minorities, a lot of them were not American [citizens]… and they weren't comfortable in that kind of environment," said Pereira.

Other GTA tech companies have noticed the same thing, reporting a rise in the number of U.S. and internationally based tech workers wanting to be part of Toronto's burgeoning scene.

Shopify, a Canadian e-commerce company with an office in Toronto, reports it had 40 per cent more U.S. applicants in the first quarter of 2017 than it averaged in all of 2016.

Tech leaders interviewed by CBC News say the uptick is part of a larger picture: Toronto is becoming a hotbed for the technology sector. 

"There was a burgeoning high tech revival [in Toronto] happening aside from the Trump election. Without a foundation of that [sector], there would be nothing to come here for," said Elan Pratzer, a managing partner at executive search firm Caldwell Partners.

Trading Texas for Toronto

It was the fast-growing artificial intelligence sector that led Kiki Adams to move to Toronto last July.

"I didn't move to Toronto to live in Toronto and find a job here. I was offered absolutely the best job that I could dream of in Toronto," she explained.

A recent graduate from the University of Texas, Adams now works in a niche AI field that combines data science and computational linguistics.

She moved to the city before the U.S. election, though she said the electoral result has played a role in convincing her to stay "at least a few years."

She said that if she was at a company of this size in the States, she doesn't know if she would have health care.

Adams said she sees herself staying in Toronto "at least for a number of years," saying the decision is informed as much by how much she enjoys her work as by the political situation back home. (CBC)

Toronto tech hits its stride

The last few months have seen a series of coups for Toronto's scene, including the announcement of a new artificial intelligence research hub, the Vector Institute and the news that Uber will be opening up a research hub for self-driving cars.

Google has also taken note of the city's potential, putting in a bid to help develop a piece of the eastern waterfront "from the internet up."

Prime Minister Justin Trudeau also spent part of this month promoting Canadian tech, reflecting the intention signaled in the 2017 budget, which promised funding to support and develop the tech sector.

Uber is set to open the first branch of their self-driving car research group outside of the U.S. in Toronto. (Aaron Josefczyk/Reuters)

Insiders say those headlines are the fruit of at least a half decade of building momentum, which Pratzer chalks up in part to increasing investment and a burgeoning venture capital community, as well as the substantial talent pool coming out of places such as the University of Toronto and the University of Waterloo.

"It's a great hub for people to be in. There is financial capacity here and human capacity here," he said. 

Mike Silagadze, founder and CEO of startup Top Hat, agreed, saying he's watched the tech scene in Toronto increase "ten-fold" in five years.

Kiki Adams agrees, adding that Toronto is now known for tech specialties such as artificial intelligence and cyber security. 

"Toronto is one of the places where the most innovative and cutting-edge technology is being developed," she said.

Creating a startup-friendly environment

Silagadze said that getting more U.S. talent like Adams to come to Toronto would be "phenomenal," but he said it's the return and retention of Canadian workers that is likely to have the biggest impact on the city.

"It's an opportunity to reverse the brain drain and prevent it altogether," he explained. "There are more Canadian success stories in the U.S. founded by Canadians than there are in Canada, if you look at companies like Slack and Tesla. Being able to retain those types of people and have them actually build these companies in Canada is going to have a massive effect on the ecosystem."

Top Hat founder and CEO Mike Silagadze said retaining Canadians, not U.S. or international talent, will have the biggest impact on the city's technology sector. (CBC)

In many ways, conditions are already primed for better talent retention, because tech companies are increasingly able to make a go of it in Canada, said Salim Teja, executive vice president of ventures at MaRS Discovery District.

"The pace of startup activity is certainly growing," said Teja. "It's not just that we're doing more, it's that these companies are coming to scale," meaning they are increasingly able to amass funding and grow while staying in Toronto.

He cites League and Wealth Simple as examples of companies that are successfully evolving thanks in part to homegrown funding.

That local optimism is spilling over to startups at the beginning of their journeys.

DMZ, Ryerson University's startup accelerator, reports that in a reversal of previous trends, more Canadian startup founders are now opting to apply to Canada-based accelerators rather than programs that would require them to move to the U.S. for a period of time.

Challenges on senior leadership front

Though Silagadze and Pratzer have both observed interest from talent outside of Canada, they're especially anxious to see movement in a very specific group: executive-level Canadian talent working abroad. 

"One of the biggest challenges Canadian companies face is a lack of senior executive talent," said Silagadze. "Bringing back even a small number of those people — numbers that statistically might not seem significant — will have a big impact."

Though Pratzer has seen increased interest from more senior Canadian talent abroad, he said that if Canada and Toronto specifically want to attract the best executives, local companies need to be prepared to pay internationally competitive salaries. 

"If you want the best talent, you've got to pay them what they're worth, and that doesn't mean that just because you bring them to Canada you can pay them in Canadian dollars and pay them less," he said. "If we get rid of that notion, I think we'll attract a lot of people, because it is a great place to live."