As Vancouver tries to be a base for new tech start-ups it has found that it needs to offer bonuses of various types to attract workers to the city where living costs are high. While Vancouver has already established itself as the cheapest place among fifty markets in North America to establish a new tech start-up, companies in Vancouver realize that to be successful they must attract top tech talent.
The growth of the tech sector in Vancouver is being helped by the fact that large multinationals such as Amazon and Microsoft have recently opened offices in Vancouver. At the same time, Canadian startups such as Hootsuite have begun to obtain international status.
Vancouver's high cost of living and the low value of the Canadian loonie relative to the US dollar are two drawbacks that Vancouver has to counter. However, the situation is even worse in some prime high-tech areas such as Silicon Valley in the United States which is notorious for the high cost of living in the Bay area. An employee in the area notes: “I didn’t become a software engineer to be trying to make ends meet,” said a Twitter employee in his early 40s who earns a base salary of $160,000. It is, he added, a “pretty bad” income for raising a family in the Bay Area."
Bill Tam CEO of the BC Tech Association said that the growth of the industry has left companies to fiercely compete to hire workers. The Association issued a report estimating that by 2021 there will be an estimated 35,000 jobs needing to be filled in BC in the tech industry. The competition has led companies to offer enticements such as vacation cash and luxury cars to hire prospective employees. Tam said that demand for workers was by far exceeding supply. Tam said that he has heard of companies offering flexible work hours, unlimited vacation, and even one company that offered a downpayment on a new Tesla car.
Tam said: "Tech companies by design are trying to be innovative in all aspects of what they're doing. So the way in which they structure their businesses and the culture they try to adopt is very much consistent with that philosophy."
One company, RingPartner, has cut hours per day worked to just five hours in an attempt to lure employees. The thirty employees of RingPartner report to the office between 10 a.m. and 3 p.m. Monday to Friday. Where they do the rest of their work is up to them. They can spend the afternoon at the beach and log on to their computers in the evening. Many parents appreciate the arrangement as they can spend more time with their family. However, some people prefer the traditional eight-hour day at the office and do exactly that. RingPartner notes that since they introduced their new policies sick days have actually decreased by a significant ten percent. Their revenue and profitability has also increased.
Leslie Collin, director of people and culture at Unbounce said that benefits not only are a recruiting tool but reflect a company's culture. The Vancouver-based company gives each of 190 employees four weeks of paid vacation, plus $1,000 for taking time off. Collin said that the vacation bonus allows workers "to go on a new adventure and support their life goals as well as their career goals." She said that rest helped employees to be able to come up with fresh ideas and more creativity and that this helped the company be successful.
Monday, September 11, 2017
Saturday, September 9, 2017
A study by two students at the University of Waterloo shows that in the fast growing tech market many tech graduates are deciding to go to the US rather than stay in Canada.
Atef Chaudary and Joey Loi are graduates of the Systems Design Engineering(SYDE) program at the University of Waterloo in Ontario. The small study of 82 graduating students to which 77 replied showed that many in the program went straight to the US rather than stay in Canada. This appears to show a brain drain from Canada at least in the tech area. However, the two who did the study warned against its being extrapolated. Yet the study does give at least some evidence for a potential brain drain in the restricted area of technology graduates.The tech area is the fastest growing market in North America and so there is fierce competition for graduates. Each student in the SYDE program had to take six co-ops in which they were required to work for companies to obtain experience. These co-op experiences are what drove many graduates to decide to work in the US. By the end of the term fully 40 percent of the students did co-op work in the US. Students working in the Waterloo area started out at 30 percent but declined ever since. Toronto jobs also fell precipitously from 70 percent to 30 percent. As their skills increased, it would seem that students found better co-op positions outside the country..The reason for the migration south is that the US jobs pay better among other pluses. In advising Canadian companies how to compete Loi said: “Co-op replicates a realistic job search process. Make the internships in Toronto or other areas more enticing. One of the ways to do so is matching pay. We need it for tuition and also almost as a status symbol.” Average hourly pay for a US co-op job was $49.40 an hour. In contrast, the average pay on co-op jobs in Canada was only $25.40 per hour. Obviously, US pay is much superior. Fully six out of ten students who had a full time job at the time of graduation were working for a company that they had done a co-op with. Many students want to migrate to places such as San Francisco and Seattle where there are large innovative companies such as Tesla, Apple and others who are innovative and are attractive to new grads.Loi said: “There’s a mentorship aspect. The perception exists that if you go to these bigger companies you’re going to get exposure to better people to network and get more opportunities for you, which is not the same for Canadian companies. If there were more high profile hires in Canada, engineers or others coming from the valley that would an attracting point.”Obviously, if the Canadian tech companies are going to hire top people from Silicon valley in the US it would need both to up salaries and provide special incentives to lure them away. Neither may be practical. The least Canadian companies could do is to compete on the salary level. No doubt many would prefer to stay in Canada if the salaries came close to matching those provided in the United States. It may be that Canada is able to attract more from overseas as the political situation in the US appears threatening to some tech students from some countries. This may help Canada attract some foreign tech workers and students who would have otherwise gone to the United States.At a global level, it would appear that China is also on the cutting edge of advancing technology and wants to become a global leader in artificial intelligence development as discussed in a recent Digital Journal article China is offering more to entice top researchers compared to competitors in US or Europe.Chaudhary also notes that Canadian tech companies are not doing the right things to keep Canadian graduates here particularly on the salary level. Of 50 markets for tech start-ops Vancouver was the cheapest with Toronto and Montreal also faring well as competitors, but unless Canadian technology companies start to to compete with salary levels in the US they will fail to keep and attract the top talent they need.Heather Galt, of Communitech said that many hope that students will study abroad and then return to start companies or contribute to developments in Canada: “I encourage my students to go and have that opportunity for international experience. It benefits the individual and Canada.I actually believe that going and having those expat opportunities is a fantastic part of how we as a country will build opportunities internally within our own country. The Canadians that I talk to in the Valley and Seattle, they have an incredible sense of pride. They miss home and love Canada. We need to encourage our companies, our schools and our students to share stories with one another to get excited. It shouldn’t be out of a sense of duty—in my mind it should be that you really believe and really want to be a part of what’s coming.” The small study is not in any way a definitive study showing that there is a brain drain. Indeed there are studies that show the opposite which is not surprising given the political uncertainty in the US at present. However, the study does show the need for Canadian tech companies to offer salaries that are competitive to those in the US. The Canadian government and investors have been promoting tech industry in Canada as discussed in a recent Digital Journal article. This investment will be in vain if top tech talent in the country decides to move south.
Friday, August 11, 2017
A report by Commercial Real Estate Research(CBRE) found that of 50 US and Canadian markets, Vancouver was the cheapest city to start up a new tech company.
|CBRE has a full time staff of about 30 researchers spread across Canada. A typical tech company setting up in Vancouver would cost about $24 million a year US to cover both employee salaries and rent in Vancouver. In contrast the same company in the San Francisco Bay area, the most expensive area, would cost $67 million more than twice as much.|
The Quebec-based Canadian company Bombardier says that it is considering `multiple options` for its train business as the unit continues to provide strong profits and sales, enabling the company to break even in its latest quarterly results.
|Overall, the Montreal-based company that makes mainly planes and trains used up $570 million US in the quarter that ended June 30. While the company lost $296 million or 13 cents per share this was an improvement over the same period last year when they lost $24 million or 24 cents a share. However, revenue fell 5 percent to $4.09 billion. However if special charges such as employee severance, and also benefits from a tax adjustment are considered, analysts had expected the company to post a one cent loss per share. Instead the company broke even.|
Saturday, July 1, 2017
The Quebec Company Flight Claim, based in Montreal, in April signed a contract for $73,000 that would allow them to run ads on baggage screens at Montreal's Pierre Elliot Trudeau airport.
|The campaign started just last week and lasted only four days before it was abruptly stopped. The promotional ad claimed that passengers could receive up to $1,800 in compensation and to contact the company if they wanted help to fight their case. The ads can be seen here.|
Wednesday, June 28, 2017
Canadian Defence Minister Harjit Sajjan reveals that the Canadian government will increase defence spending by 70 percent over the next decade.
|Canada's defense spending will increase from $18.9 billion now to $32.7 billion. When asked where the money would come from Sajjan would not say but promised it would be there when required. Money spent on defense is money not available for other programs such as medical care, infrastructure improvements, and other expenditures that arguably would be of much greater value to Canadians.|
Tuesday, June 27, 2017
U.S. President Donald Trump is poised to nominate Kelly Knight Craft as the next American ambassador to Canada. The post has been vacant since the former ambassador Bruce Heyman appointed by former president Barack Obama resigned on January 20.
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|The White House announced in a statement late Wednesday that Craft had been picked for the post. Maryscott Greenwood who heads the Canadian-American Business Council praised the choice saying: "I think it's an inspired choice on the part of the president. It's a complement to Canada that the White House would choose a person of Kelly's calibre, intellect and talent, so I am excited about the prospect."|
The northern Manitoba town of Churchill has lost its only rail service into the town as OmniTrax the Denver-based company that owns the rail line into the community from the south announced that the rail bed was washed away in 19 locations.
|Five workers in Churchill were let go as a result of the service suspension. Business owners in the town say that there could be more layoffs. The owner of the 31 room Tundra Inn and hostel, Belinda Fitzpatrick said that it was upsetting and heartbreaking to layoff the 5 workers. She had intended to open a seasonal restaurant next week but the suspension of rail service caused her to drop her plans. She describes the rail line as the lifeline to the community. There is no road into the community from the south. The road ends at Gillam near where there is a large hydro development. The rail service ends there now as well. Churchill is a further 300 km from Gillam.|
Tuesday, June 20, 2017
According to some Many Canadians may now be turning to their home equity as a way to raise money to fund a lifestyle that could be unaffordable for some.
|A recent article in BNN points out that more and more Canadians are using their homes as if it were an ATM from which they could withdraw. Since 2011 the number of Canadians who have taken out a home equity line of credit (HELOC) has risen by 40 percent. As many householders are still paying on mortgages and other debts such as car loans, the added debt can sometimes not be managed. Many are not able to even make regular payments on time.|
Friday, June 16, 2017
The Manitoba Progressive Conservative (PC) government of premier Brian Pallister is looking to save money on provincial home care service programs and may even privatize the service.
|However, Pallister won't say yet whether he plans to privatize the service saying: "I'll continue to say that we are looking for results and improving results. We shouldn't be close-minded about it. All across the country other provinces have faced up to these challenges — some private improvements, lots of changes within the public sector delivery model. We are pursuing these things. We are looking for options." A private company will operate the service only if it makes a profit so unlike a public service it needs to aim for more than just covering its costs. It would not want to incur a deficit to handle expanding needs. either.|
In 2015, KPMG was accused by the Canada Revenue Agency of Tax evasion schemes: "The CRA alleges that the KPMG tax structure was in reality a "sham" that intended to deceive the taxman.". In 2016, the Canada Revenue Agency was found to have offered an amnesty to KPMG clients caught using an offshore tax-avoidance scheme on the Isle of Man.
Saturday, June 10, 2017
For years while the price of oil was high, Ontario's growth lagged behind that of Alberta and Saskatchewan the main oil producing provinces. However, now its growth is surging while the oil producers are hard hit.
|Canada's large banks predict that this year Ontario's growth will be near the top of all provinces. The jobless rate, 5.8 percent, is the lowest since 2001. The national average unemployment rate is 6.5 percent itself the lowest since 2008. In 2016, Ontario added 96, 800 full-time jobs and surprisingly part-time jobs actually decreased by 10,200 a plus for many workers. Manitoba has the lowest rates at 5.4 percent and British Columbia 5.5 percent. However there are still 437,000 Canadians looking for work according to Statistics Canada. In 2016 the province grew at twice the national average. The growth is not related to just one sector but includes manufacturing, real estate finance and technology. Tax revenue from corporations grew 16,.8 percent last year and 19.6 percent this year as corporate profits grew. The future looks promising as a survey of Ontario businesses by the Bank of Canada showed that sales are up and that companies are intending to invest in new equipment and hire on more staff.|
(May 28)Unions representing 175,00 construction workers in Quebec launched a general strike shutting down major construction projects in Quebec after months of failed labour negotiations.
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|Labour federations and construction companies had negotiated late into the night last Tuesday but could not reach a deal before a midnight strike deadline. Workers in the industrial sector want more stable work schedules, but salaries are believed to be the main issue in the residential construction area. Michel Trepanier a spokesperson for the alliance of construction unions said; "Employers are asking us to sacrifice time with our families to be available for work... There are limits and they've been reached." Collective agreements had expired on April 30.|
Saturday, May 27, 2017
Maude Barlow, National Chair of the Council of Canadians, criticizes Canadian Prime Minister Justin Trudeau for avoiding any confrontation with US President Trump on the issue of water and NAFTA.
|Barlow has just issued a report called: Water For Sale: How Free Trade And Investment Agreements Threaten Environmental Protection Of Water And Promote The Commodification Of The World’s Water. The report looks at the trade threats posed to global water supplies by different trade agreements including NAFTA. Barlow notes:|
“NAFTA rules that already trump domestic water protections could be made far worse with the upcoming renegotiation of the deal. Trump is attacking water protections in the U.S., locking in deregulation in ways that would make it very hard for future presidents to undo. Trudeau is doing the same here by not restoring the Navigable Waters Protection Act, despite his promise to do so. These realities, combined with Trump and Trudeau’s refusal to remove Chapter 11 from NAFTA, put water protection in the crosshairs.”
Investor-state dispute settlement (ISDS) or investment court system (ICS) is a system through which individual companies can sue countries for alleged discriminatory practices. The practice was made widely known through the Philip Morris v. Uruguay case, where the tobacco company Philip Morris sued Uruguay after having enacted strict laws aimed at promoting public health.ISDS has been criticized because the United States has never lost any of its ISDS cases, and that the system is biased to favor American companies and American trade over other Western countries, and Western countries over the rest of the world. Chapter 11 of NAFTA contains ISDS provisions,
S.D. Myers v. Canada Between 1995 and 1997 the Canadian government banned the export of toxic PCB waste, in order to comply with its obligations under the Basel Convention, of which the United States is not a party. Waste treatment company S.D. Myers then sued the Canadian government under NAFTA Chapter 11 for $20 million in damages. The claim was upheld by a NAFTA Tribunal in 2000.