Canada is fast becoming known as the Silicon Valley North as labour shortages in the IT industry and unfavourable policies in the USA confirm. The timing could not be better for qualified IT professionals who are seeking entry to Canada under an immigration employer sponsored work permit or permanent residence program. US immigration troubles may be a boon for Vancouver’s tech sector.
Pablo Guana, a software engineer from Argentina, almost refused a job with Facebook when the company redirected him from Silicon Valley to Vancouver since his US visa application was rejected.
“I will not go to Canada,” was the initial reaction of the 25-year-old. “Twenty degrees below zero, are you crazy?”
South African, Jonathan Hitchcock, 34, was also at the receiving end of the American immigration system. He was disappointed at first that his “dream job” would be shunted to Canada.
Guana and Hitchcock’s struggle demonstrates how immigration reforms in the United States, among other factors, are contributing towards making Vancouver the ‘Silicon Valley North’.
Eventually, the two men decided to give Vancouver a chance and their perspective changed. “One of the reasons (Facebook) does well in Silicon Valley is because all the other companies are in Silicon Valley. Apart from that, Silicon Valley is awful. It’s a terrible, terrible place,” said Hitchcock, eight months after relocating to Vancouver. “Vancouver is a wonderful, beautiful place, and all the companies are here. There’s a thriving tech community here.”
In May 2013, Facebook established its downtown base for new engineering hires. It thereby joined a group of legacy and start-up digital and tech companies like Hootsuite, Electronic Arts, Bench and Mobify, and preceded international heavyweights like Sony Pictures Imageworks, Microsoft, and Amazon.
Facebook points out that the employment of up to 150 people in Vancouver was a result of the obstructive US immigration system that “makes it difficult, and sometimes impossible” to bring talented engineers to its Menlo Park headquarters, south of San Francisco.
“This same immigration issue plays an important role in many other companies’ decisions to open international offices,” said a Facebook spokeswoman. “Canada’s approach to immigration enables companies like Facebook to set up small operations such as this, and we plan to do so in a way that has a positive impact in our temporary home.”
This trend is well known to the federal government who says it will “make no bones” about exploiting it to boost the domestic economy. “We’re seeking very deliberately to benefit from the dysfunctional American immigration system,” said Jason Kenney recently, when asked about a campaign that put up large “Pivot to Canada” billboards in the San Francisco Bay-area, advertising directly to foreign nationals who’d been blocked from obtaining H-1B visas.
The American visa obstacle is just one among a range of competitive advantages that can help transform Vancouver into a world-renowned tech hub, said Ian McKay, CEO of the Vancouver Economic Commission.
Vancouver has lower corporate tax rates than the US, along with appealing personal income tax rates. Also the glistening city of glass towers, waterfront and green spaces has been cited amongst the world’s most liveable.
According to Vancouver Economic Commission, B.C. has more than 600 digital media companies, and employs about 16,000 people, generating $2.3 billion in annual sales.
Business incubators such as GrowLab, a range of job fairs and tech-wizard gatherings are now coming to Vancouver as well.
Sony Picture Imageworks, the visual effects and animation unit of its parent company, is relocating from Los Angeles to Vancouver, mainly due to tax rebates. Jason Dowdeswell, Vancouver-based vice-president of production operations of Sony Picture Imageworks, said that the move, which is slated for April 2015, brings with it 500 new job openings. Less that 20% of the company’s current staff, several hundred already in Vancouver, are Canadian, he said.
“When we talk about the potential for Silicon Valley North, a lot of the pieces to that story are already here. We’re messaging out around the world … that if you want some stability in your passionate work environment, Vancouver is a destination,” he said.
Even with all these new developments, the road to Silicon Valley North is not all paved in gold. Hundreds of jobs were lost last year when Disney closed Pixar Canada’s Vancouver studio in favour of California, and video game maker Electronic Arts shifted some offices to Ontario.
In late July, a panel discussion was hosted by Hootsuite to take a hard look at the challenges. Canada is suffering “a desperate and growing shortage” of computer developers and software engineers, said CEO Ryan Holmes. He lamented a “lost generation”, whereby Silicon Valley has claimed an estimated 350,000 Canadians over recent decades, adding that if Facebook closes its Vancouver office, that “doesn’t help our cause”.
Holmes however is optimistic about the local industry’s future. “While Silicon Valley may enjoy a formidable concentration of capital and talent, it hardly has a monopoly on ambitious ideas and capable entrepreneurs,” he said.
“In a few years’ time, Vancouver will be flush with tech capital and brilliant people will be gunning to build the next Facebook, Twitter and Hootsuite.”