Article
Calgary’s Tech Momentum Fortifies Alberta’s Economy
August 29, 2023 4 Minute Read
Alberta, known for cattle, oil and gas, might be ready to rebrand.
Alberta was once home to one of the highest gross domestic product (GDP) ratings in the world. But everything changed in 2014, when energy prices dwindled, and the province entered a deep recession.
Nearly a decade later, Alberta is back on its feet and showcasing a more diverse and dynamic economy. Calgary-based office broker Darrell Boldon explains the important role of tech in this economic diversification success story.
“When commodity prices crashed, Alberta made a push to diversify the economy to avoid future downturns,” he says. “There was a realization that dependance on a single industry was just too risky in the modern economy, so the city looked to tech.”
Tech Unicorns
Both the province of Alberta and the city of Calgary worked with investors to support local tech firms and drive job growth.
“There’s been an exponential growth in tech users,” says Boldon. “Since 2016, the tech sector alone has absorbed close to a million square feet of office space in Calgary, despite the difficult market conditions.”
One prominent success story is that of Neo Financial, a Calgary-based startup that raised $185 million in a single round of fundraising in 2022. Not only was this the largest provincial deal of the year, it also propelled the firm to “unicorn” status, with a valuation of over $1 billion. Launched in 2019 by the co-founders of SkipTheDishes, the company now counts over 750 employees.
Earlier this year, Calgary broke its venture capital funding record for the fifth consecutive year, despite global tech layoffs and economic headwinds. A report by the Canadian Venture Capital & Private Equity Association states that Alberta tech firms brought in $729 million in venture capital funding in 2022, 20% more than the previous year.
“Tech and Alberta simply go together. Both are driven by a strong entrepreneurial spirit. That fit is starting to be recognized in a big way,” says Boldon.
Seeking External Talent
Alberta has also turned to out-of-province workers to help tech firms ramp up. To entice young talent, the province launched Alberta Is Calling, a campaign touting the benefits of Alberta living. Some billboards ruffled feathers and piqued the interest of commuters in major cities across the country as they compared housing prices in Toronto and Vancouver, to those of Calgary and Edmonton.
“Young people come here because of everything Calgary has to offer,” says Boldon. “Wages are high, housing prices are reasonable and we’re a short drive away from some of Canada’s most stunning scenery. What’s not to love?”
Today, interprovincial migration to Alberta is reaching new heights. According to Statistics Canada, migration from Ontario and B.C. to Alberta more than doubled between 2020/2021 and 2021/2022. So far, those new residents have been able to find places to live, a challenge in many other cities in Canada. In Calgary, rental vacancy rate dropped to 2.7% in 2022 – the lowest it’s been in nearly a decade.
International Interest
But Canadians aren’t the only ones flocking to Alberta. International tech players have also had their eyes on the province.
Late last year, Boldon and his team helped locate India-based IT provider Mphasis at First Tower, in one of very few office deals happening at the time. A few months later, global IT firm Infosys opened a new digital centre in downtown Calgary and announced a bold plan to create 1,000 new jobs for the city. The company has partnered with the University of Alberta to share their expertise and help meet Calgary’s growing demand for more tech talent. More recently, U.S.-based Applexus Technology also inked a lease for new Canadian headquarters in Calgary, with plans to create over 100 tech jobs.
All these new jobs have helped Calgary improve the most of all North American markets in CBRE’s latest Scoring Tech Talent report. Despite layoffs across the technology sector and companies such as Benevity and Symend downsizing, the city saw the second most tech job growth of all 50 ranked markets, with a 61% increase in its tech workforce over five years.
“Calgary’s tech sector is growing quickly,” says Boldon. “This diversification of the economy will be a great long-term asset for the city, the province and the future of Canadian tech.”
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