Canadian Tech Sector Shifts from Office-Market Juggernaut to Sleeping Giant

Toronto fell to #5 in CBRE’s just-released Scoring Tech Talent ranking of North America’s top tech job markets. Ottawa, Montreal, Waterloo Region, Calgary, and Quebec City all improved their positions

CBRE’s just-released Scoring Tech Talent ranking of North America’s top tech employment markets shows that Toronto was supplanted at #3 by New York Metro despite having recorded the second-most tech employment growth in North America between 2017 and 2022, with 63,800 jobs added. Washington, D.C. remained at #4 and the San Francisco Bay Area retained its secure hold on the ranking’s #1 spot, well ahead of the pack, however its lead score-wise has slipped.

Five of eight Canadian markets increased their positions in the Scoring Tech Talent ranking, one held and two dropped. Canada has five of the top 20 tech talent cities, including two in the top 10. Tech Talent encompasses tech occupations in both tech and non-tech industries, such as a software engineer who works for a bank.

Vancouver, which had the highest tech job growth rate of all cities measured (69%), stayed at #8 in the Scoring Tech Talent ranking; Ottawa moved up two spots to #11; Montreal rose three spots to #12, having added the third most tech talent jobs in North America (51,500) after Toronto and the San Francisco Bay Area.

Waterloo Region moved up six spots to #18; Calgary – with a 61% tech job growth rate, second in North America – improved an impressive seven spots to #21; and Quebec City rose four to #35. Edmonton was the only other Canadian market to dip in the ranking, dropping to #39.

The tech markets with the highest tech job growth rates on the continent were all Canadian: Vancouver (69%), Calgary (61%), Waterloo Region (52%) and Edmonton (45%). Canada’s tech talent workforce grew by 15.7% (+150,000) from 2020 to 2022, outpacing the U.S. growth rate of 11.4% (+610,000).

Tech talent concentration—the percentage of total employment tech occupations represent—is an influential factor in how “tech” the market is and in its growth potential. Ottawa led all North American markets by this measure, with tech talent comprising 13.3% of its total employment, the highest concentration on the continent and more than double the 50-market average of 5.6%. Waterloo Region had tech occupations represent 10.1% of total employment, San Francisco Bay Area was 11.6% and Toronto and Seattle tied at 9.5% to round out the top five most concentrated tech markets.

“The scorecard shows how competitive and tightly clustered the top tech markets are right now. After a period of hypergrowth, the global tech sector is facing headwinds, and like many other sectors of the economy, tech has had to adjust to changing economic circumstances with office right-sizing and layoffs,” says CBRE Canada Chairman Paul 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. Canadian tech is on a path to more a normalized, sustainable growth trajectory which will make for a healthier sector in the long run. You could say that Canada’s tech sector has shifted from office-market juggernaut to a sleeping giant in the short-term.”

CBRE’s annual Scoring Tech Talent 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 and increased remote hiring. Overall, the U.S. and Canada added a combined net 760,000 tech talent jobs since 2020.

CBRE also ranks the Next 25 emerging tech markets, those with strong growth potential, on a narrower set of criteria. Halifax (#4), London, ON (#8), and Winnipeg (#18) made repeat appearances on this list, with London seeing 79% growth of its total tech employment between 2017 and 2022. 

Competitive Advantage

Canadian tech markets continue to boast a competitive advantage over their U.S. counterparts owing to the relatively more affordable cost of hiring tech talent here. Total operating costs for tech companies increased in 2022 due to higher average wages, even as many organizations reduced their real estate footprints.

The total annual labour and real estate cost for a 500-person tech company occupying 60,000 sq. ft. of office space ranged from US$33 million in Quebec City – the lowest in North America – to US$79 million in the San Francisco Bay Area. The eight most affordable cities by this measure are Canadian.

Tech talent is also skewing younger in North America’s leading tech centres. Over half of the top 50 tech markets saw the total number of residents in their 30s increase by more than 10% since 2016. Meanwhile, Salt Lake City, Madison and Waterloo Region had the highest total concentration of residents in their 20s.

“The labour market for tech talent is still very competitive, even amid a slower economy and layoffs, however it’s loosened enough to create hiring opportunities for non-tech companies,” said Colin Yasukochi, Executive Director of CBRE’s Tech Insights Center in San Francisco. “As tech talent gets redistributed across other industries, our economy becomes more digital and that could spur new growth for the tech industry. Artificial intelligence has seen a surge in venture capital funding, a positive indicator for the future growth of tech.”

To download the full report, click here.

Additionally, CBRE’s latest tech talent analyzer provides an interactive, in-depth comparison of tech talent in different markets. For more information, click here.