Politicians keep saying the influx of US tech companies is due to Canada’s “generous immigration policies.” However a new report from global commercial real estate mega firm CBRE shows this may have more to do with cheap, high quality labour. Canadian cities ranked amongst the highest for quality of employees, but also hit the bottom of the list for wages. This more than makes up for the high price of office space in these cities.
Canada Has Cheap Tech Labour
Canadians are high quality labour, and they’re incredibly cheap according to the report. Top notch education, and experienced employees pushed Toronto and Vancouver into the top ten under the quality score. Unfortunate for Canadians, Toronto and Vancouver are the bottom two for wages. Toronto and Vancouver skilled labour was even cheaper than the cities with the lowest quality tech labour – Oklahoma City, and Omaha. Let’s breakdown how the two cities did a little further.
Toronto ranked sixth on the list of North American tech hubs. The labour pool has an estimated 212,500 tech employees, ranking it fourth by size. Annual gross rent came in at US$25.51/sqft, putting it in 21st place. Despite the high rent for companies, the low wages make it an extremely attractive option. The average annual wage for 250 tech employees works out to US$47,210 – making it 49th on the list for wages. Cheap employees and relatively cheap office space are a win for companies, not so much for people living there.
Vancouver ranked sixteenth on the list for North American tech hubs. The labour pool has an estimated 65,100 people, making it the 19th largest on the list. Annual gross rent for office space came in US$30.31/sqft, making it more expensive than Toronto. The annual tech employee wage was only US$45,501 per person, making it the worst paying city on the whole list. The low, low wages of their incredibly talented worker pool still makes it one of the most attractive markets.
Sure it’s a great deal for companies moving here, but not so great for people that live in Canada. Canada’s most expensive tech hub average, is 36% cheaper than the lowest quality tech employees in the US. It’s no surprise that Canadian cities remain amongst the top ranking for companies, because it appears they are taking the cost of their real estate out of their employee wages. Ouch.
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