Vancouver tech sector growing at highest rate in North America: CBRE

Employment growth, demand for office space leading all other cities across the continent

Microsoft's main Vancouver office at Pacific Centre, in the city's downtown core | Rob Kruyt, BIV

Metro Vancouver is used to the rain pouring in.

The region’s tech sector is now getting increasingly accustomed to the jobs pouring in – so much so that employment growth is exceeding all other cities in North America.

The sector’s local workforce added 28,300 jobs from 2020-21, growing 44.2 per cent compared with the last period examined (2018-19) by CBRE Group Inc.

The Tech-30 report, released Wednesday (Nov. 2) by the real estate services firm, reveals Vancouver’s next closest competitor on the continent to be another Canadian city: Toronto.

Top five cities:

1.     Vancouver: 44.2 per cent growth (+28,300 jobs)

2.    Toronto: 37 per cent growth (+60,400 jobs)

3.    Austin: 25 per cent growth (+15,718 jobs)

4.    Seattle: 18.6 per cent growth (+37,563 jobs)

5.     Montreal: 15.8 per cent growth (+13,700 jobs)

Not only did job growth surpass all other North American cities, but demand for office space in Vancouver’s tech sector tied Boston at No. 1 (21.6 per cent growth).

CBRE estimates Vancouver’s overall tech workforce stands at 92,300 people, while the average software engineer should expect to earn US$97,885 annually compared with US$92,518 in Toronto.

Head down the I-5, though, and the average software engineer in Seattle can find themselves taking home a far heftier annual paycheque: US$140,316.

“Low operating costs contribute to Vancouver’s allure as a tech hub,” stated an April report from the Downtown Vancouver Business Improvement Association.

“The recent increase in investment from U.S.- based venture capital firms is linked to increases in remote work, with VC firms increasing their investments in Canada-based companies now that geographic proximity is less of a limitation.”

Even though the rise of remote working might lead one to believe that office space would be in less demand, big U.S. tech companies appear to be growing more comfortable tapping workers based in Vancouver offices to exploit lower operating costs.

Vancouver-founded PlentyOfFish (now owned by Match Group), fintech Tipalti Inc., medical devices firm Masimo Corp. (Nasdaq:MASI) and Microsoft Corp. (Nasdaq:MSFT) are among the American tech companies that have been expanding downtown over the past year.

And homegrown tech firms that recently reached unicorn status (a valuation of US$1 billion or more) also have a big foothold in the city’s downtown core, including Trulioo Information Services Inc., GeoComply Solutions Inc. and Galvanize.

“It’s got a great talent pool, highly educated, highly motivated. We get some additional benefits from the government,” Joe Smolarski, chief operating office at Miami-based Kaseya Ltd., told BIV last month.

The IT services firm launched its Vancouver operations in 2018 with 35 local workers and has since expanded to 120 workers based at the Sun Tower on 128 West Pender Street.

Smolarski said his company has since outgrown those offices and will be looking to hire an additional 100 workers in the coming year as it expands into a new 22,000-square-foot office on 545 Robson Street in January.

Ken Peacock, chief economist at the Business Council of B.C., said Canada’s relatively low dollar compared with the greenback was once a motivating factor for many U.S. tech firms looking to expand northward.

That’s less of the case now. American companies are motivated more by access to talent and Canada’s more progressive immigration policies that allow them to recruit employees from other parts of the world and bring them to work in a Canadian satellite office.

“[It] largely was an immigration play when Microsoft and some of the other tech companies came up here,” Peacock said in October, adding that intuition tells him these tech firms’ ongoing expansion efforts over the past decade have come as they’ve grown more comfortable with the teams built in B.C.

For Microsoft’s part, it’s led all companies in scooping up downtown office space during the first half of the year. Real estate services firm Avison Young (Canada) Inc. estimated last month it’s secured 468,000 square feet in 2022 alone.

torton@biv.com

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