The Tech Sector is Canada’s Economic Sleeping Giant
July 21, 2023 5 Minute Read
In the last year, layoffs, economic gloom and office downsizings have painted a bleak picture of the tech sector.
“After a period of hypergrowth, the global tech sector is facing headwinds,” says CBRE Canada Chairman Paul Morassutti. “Like many other sectors of the economy, tech has had to adjust to changing economic circumstances with office right-sizing and layoffs.”
But there are plenty of reasons for optimism, according to CBRE’s just-released Scoring Tech Talent report.
The report covers 75 North American markets, ranks the top 50 tech markets in the U.S. and Canada, and outlines tech talent labour market trends amid economic shifts, tech layoffs and increased remote hiring.
Eleven Canadian cities were cited in the report, with eight making it onto the list of North America’s Top 50 Tech Talent Markets.
Last year’s top 10 performers maintained their hold on the higher ranks, with Toronto coming in at #5 – down two spots from last year’s ranking – and Vancouver holding steady at #8. Ottawa (#11), Montreal (#12), Waterloo Region (#18), Calgary (#21) and Quebec City (#35) all climbed up in the rankings, with Calgary improving the most of all ranked markets, jumping up seven spots.
“The scorecard shows how competitive and tightly clustered the top tech markets are right now,” says Morassutti. “Regardless of these short-term trends, Canadian cities have a solid tech employment base and job growth in Canadian markets such as Vancouver, Toronto and Montreal are among the highest in North America.”
Best In Class
Canadian cities topped the charts in several categories.
Seven of the eight Canadian markets featured in the Top 50 were ranked as top job markets, meaning they created more jobs than degrees. Toronto, Vancouver and Montreal were considered the top three job markets, generating a combined total of 160,500 tech jobs over the last five years.
Vancouver recorded the greatest tech job growth of all 50 ranked markets, with a 69% increase in its tech workforce over five years. Calgary ranked second with a 61% increase between 2017 and 2022, while Waterloo Region followed in third with a 45% increase.
Ottawa was once again first in North America for tech concentration, which measures the share of tech jobs in a workforce and is an important predictor of a tech market’s growth potential. The San Francisco Bay Area and Waterloo Region trailed Ottawa on this measure.
Canadian cities are witnessing high rates of population growth among young workers.
Of all the small tech markets covered in the Scoring Tech Talent report, Waterloo Region saw the greatest increase in its population of workers in their 20s and 30s. Toronto, Ottawa and Vancouver were the top five fastest-growing large markets in both demographic groups. High population growth in the 20s and 30s age groups indicates future tech market growth and innovation, according to the report.
Canadian cities all ranked as more affordable locations for tech companies relative to U.S. destinations, despite increases in operating costs in the last year. Quebec City earned the title of most affordable city of all 50 ranked markets, followed by Montreal and Edmonton. As lower-cost markets, Canadian cities are ideal destinations for startups and companies looking to expand into new markets.
Future Tech Hubs
Three Canadian cities made repeat appearances on North America’s Next 25 list, spotlighting emerging tech markets with appealing opportunities for employers seeking untapped talent.
Halifax was #4 in the Next 25 list, five spots higher than last year’s ranking. London, Ontario ranked #8, having nearly doubled its tech talent population over the past five years. Winnipeg was #18 on the list.
These markets are scored based on a more limited set of criteria than the Top 50, including tech talent employment, wages, growth rates and graduates.
“Canadian tech is on a path to a more normalized, sustainable growth trajectory, which will make for a healthier sector in the long run,” says Morassutti. “You could say that Canada’s tech sector has shifted from office-market juggernaut to a sleeping giant in the short-term.”
To download the full report, visit cbre.com/techtalent
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