Waterloo-based Thalmic Labs CEO Stephen Lake has a message for new tech grads in Canada thinking of heading down to Silicon Valley for work: don’t bother.
In a recent blog post, Lake says he sees the same thing every year, as a wave of computer science and engineering grads leaves the Kitchener-Waterloo area, drawn by the higher salaries of the San Francisco and Bay Area which can often be double those on offer for entry-level posts in Canada.
But the numbers can be deceiving, says Lake, whose company makes the Myo Gesture Control wearable technology and employs over 100 people. “Thalmic has offices both in Waterloo and the Bay Area,” says Lake. “In the process of hiring for each office we spend a lot of time analyzing these markets. The first time we analyzed comparative earnings we thought there must have been a mistake.”
He says that in terms of real earnings – and taking into consideration housing and cost of living, which are much more pricey in Silicon Valley – living in the K-W region turns out to be only slightly less financially rosy for the early-career tech worker (to the tune of $3,000 CAD annually, by Lake’s figures) than living in San Fran.
Indeed, a RentSeeker.ca report on average rental rates for apartments both north and south of the border found that Canadians pay much less in rent than their American cousins. A one bedroom apartment in Toronto, the priciest in Canada, will cost you $1,081 per month, while the average one bedroom in San Francisco will run a whopping $3,530. Even moving out into San Jose will set the renter back $2,112 a month, still roughly twice that in Toronto.
Even more revealing is the scenario a few years down the career path, when tech workers hit mid-level positions and start having families, says Lake, as salaries begin to (slightly) even out while cost-of-living soars in and around San Francisco in comparison to southwestern Ontario.
“Google’s new Waterloo office will be home to over 1,000 engineers, and both Square and Shopify Plus continue to expand operations,” says Lake. “If you can handle four seasons, there’s plenty of opportunity for excitement in Waterloo.”
At a little over 550,000 people, the Kitchener-Waterloo region is small-townish in comparison to the buzzing hubs of Montreal, Toronto, Vancouver and even Ottawa. But it has fast become start-up central in Canada. Over 1,900 new technology startups have been formed in the K-W area over the past five years alone, raising hundreds of millions in investment dollars and employing tens of thousands of workers. “Internationally, their reputation is off the charts. I’m not sure Canadians understand that,” says Steven Woods, engineering director for Google, Canada, in conversation with the Globe and Mail.
The current political climate in the U.S. is also expected to support further growth, as fears loom in the U.S. of greater labour restrictions in the wake of President-elect Donald Trump’s planned policy changes. Coupled with a wider opening of the immigration doors in Canada, the situation looks good for seeing more skilled IT workers coming to Canada. Larry Smith, adjunct economics professor at the University of Waterloo says that changes in the U.S. will mean a shift in the flow of workers north. “We’ve always had a reasonably good draw but America is a powerful magnet for people around the world and now the magnet will be dimmed,” Smith told the Toronto Star.