Tech sector’s growth in Vancouver presents ‘double-edged sword’

Immigration program spurs competition for talent between tech giants and startups

Clir Renewables CEO Gareth Brown says that while Amazon.com’s expansion in Vancouver is driving salary costs higher, the tech giant is also drawing many talented people who ultimately work for local startups | Chung Chow

Rapid growth in Vancouver’s tech sector is unsheathing a “double-edged sword” for startups like Clir Renewables, according to CEO Gareth Brown.

Envoy Global Inc.’s March 2019 survey of 400 U.S. hiring professionals revealed that American companies are targeting Canada as a future talent hub, with 65% of respondents saying they think Canadian immigration policies are better than U.S. immigration policies.

Another 38% of respondents said they planned to expand in Canada, while 21% already had at least one office here.

“For us it’s actually increased the talent pool as well as making it more competitive. So it’s a double-edged sword. It works both ways,” Brown said.

He pointed out that while the expansion of Amazon.com Inc. (Nasdaq:AMZN) in Vancouver is driving salary costs higher, the Seattle-based tech giant is also drawing to Vancouver many talented people who often end up working for local startups.

Meanwhile, those U.S. firms looking to expand their presence in Vancouver see an advantage in Canada’s comparatively open and stable immigration policy.

Ottawa announced March 19 in its federal budget it was making permanent the Global Talent Stream, which began as a pilot immigration program offering skilled tech workers and employers a two-week turnaround on getting immigrants into the country.

Nearly two years since the launch of the program, the Global Talent Stream has been a net positive for tech firms, according to Boughton Law immigration lawyer Bruce Harwood.

He added that U.S. immigration policy has become increasingly strict the past two years, which has made Canada a more desirable destination for international  skilled workers.

“The Trump administration is cracking down,” Harwood said. “Your abilities to come here as a temporary resident or a permanent resident are far superior than your ability to enter the United States.”

Most corporate clients of his have been drawing technology workers from western Europe, the U.S. and, to a lesser degree, India.

“Training might be the long-term goal but in the short term, how are these companies going to meet the demand?” Harwood asked, adding the expected growth of the liquefied natural gas industry will raise pressure on B.C. employers to recruit engineers and other skilled workers.

“These are massive, massive projects, and I don’t know if they’re going to be able, through the domestic labour supply, to feed those jobs.”

After a deal collapsed that would see Amazon open a vast new office in New York City, the company announced it would instead expand its other North American offices to compensate.

Amazon had previously announced in April 2018 it was increasing its presence in Vancouver by adding 3,000 more jobs in the coming years.

So how do local tech startups compete against well-capitalized tech giants expanding in Vancouver to take advantage of more progressive immigration policies?

“I’m not going to pretend that it’s easy,” said BC Tech Association CEO Jill Tipping, whose industry group supports and advocates on behalf of the province’s technology sector. “Any company will tell you that talent is their single biggest challenge, and we’ve got scarce supply and so anything else that creates demand makes it harder.

“The answer is just so plain and simple about increasing supply. It’s really not about trying to control demand. We should be absolutely delighted that American firms want to come to Canada but we should make sure there’s enough talent not just for them but for everybody – most especially our homegrown tech anchors.”

The BC Tech Association had previously called on the federal government to make the Global Talent Stream permanent.

Tipping said its new permanent status would tap into more global talent and help local tech firms grow.

In the meantime, it will be up to startups to differentiate themselves from the giants if they want to attract much-needed workers, according to Brown.

“We’ve been able to pull in our CTO [chief technology officer], our software architect and other lead roles internally here from these larger players because we’ve been able to offer them the chance to have a real impact working in renewable energy,” said Brown, who immigrated from the U.K. to Canada in 2009.

“So from a technical leadership perspective you’re not a small cog in a massive company.”

torton@biv.com

@reporton