Tech hubs in smaller cities gaining traction as companies hunt for labour

Toronto still dominates Canada’s tech scene but smaller markets are making inroads as companies compete to find talent, a new report says.

The report by real estate services firm CBRE notes that while Toronto’s tech talent pool grew by 54 per cent between 2013 and 2018 to reach 228,500, numerous smaller cities have also notched strong gains.

Paul Morassutti, vice-chairman of CBRE Canada, says companies are looking further afield as the competition for talent rises.

“Increasingly both established firms and startup firms are understanding that there is a significant pool of untapped tech talent in other parts of the country.”

The annual ranking saw Victoria jump three spots to number seven and Oshawa, Ont., was up by two to rank number 12, while Hamilton, ranked number nine, and Guelph, Ont., ranked 13, had the fasted tech job growth among mid-sized and small tech talent markets.

Morassutti said attracting talent was the key concern for companies so they aren’t particularly concerned with office costs, but with high housing prices in Vancouver and Toronto, tech workers and the companies seeking them are looking at other cities.

“All of a sudden these smaller and mid-sized markets are beginning to make a lot of sense.”

There’s been a shift from the past where smaller cities simply tried to compete on the “very weak argument” of cost to attract tech companies, and are increasingly working with various levels of government as well as accelerators and incubators to create ecosystems, said Morassutti.

They’re creating specialized hubs, like artificial intelligence in Montreal and Edmonton, automotive in Hamilton and Oshawa, Ont., and ocean-focused tech in Halifax and Calgary with clean tech.

“To the extent that each local market has been able to differentiate itself, you know that has attracted attention from the larger players and the smaller startups,” he said.

Some smaller markets also find it helpful to not be on the radar of big global tech firms that can poach talent, said Morassutti, noting an executive in Halifax said it is a plus that the city didn’t have direct flights to Seattle or San Francisco.

“We’re not just competing with Vancouver or Toronto or with San Francisco or Seattle, we’re competing with Israel, we’re competing with Germany, with China,” he said.

The report ranks Toronto, which added 80,100 tech jobs in the five-year period, as the top tech city overall. Ottawa, which lost 3,600 workers to sit at 64,500, was ranked second, while Vancouver, which added 22,300 workers to reach 74,700, was ranked third.

Guelph’s talent pool rose 94.7 per cent over the five years to 3,700, Regina rose 68.1 per cent to 7,900, Hamilton was up 52.9 per cent to 18,200, and the Waterloo Region was up 39.7 per cent to 20,400.

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