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6 reasons why Silicon Valley loves Canada

[Prime Minister Justin Trudeau visiting Kitchener-Waterloo, Ont., on Jan. 14 for the opening of Google’s new office. Photo: @JustinTrudeau]

You may not be aware of it, but Canada has likely played a big role in the technology you use in your everyday life. Big tech names like Microsoft and Google have had offices and research labs in Canada for years and seem to be here to stay. Google, for example, is making itself more at home by moving to a bigger office space in the Kitchener-Waterloo area in Ontario.

Now, one of the biggest names in tech today, Apple, is setting up shop in Ottawa. According to the Ottawa Citizen, Apple will open a 22,000 square foot space in the nation’s capital, and as this office is across the street from BlackBerry’s largely automobile-focused QNX Software Systems, that has led some to believe the space may be related to the much rumoured Apple Car.

Apple, Google and Microsoft are far from the only tech giants that have been opening up offices and/or research labs in Canada. LinkedIn, Facebook and Salesforce all also have a place (or several) to call home in Canada as well.

Experts say there are several reasons why Canada has been catching the eye of big-name tech companies, with the engineering talent coming from our universities being among the top reasons.

Due to the fierce competition between the major players in California’s Silicon Valley, engineers can be costly to employ out there. Tech companies have started to look elsewhere for quality engineers, and Canada has been able to deliver.

“The quality versus the cost of engineering talent is unparalleled in Canada,” Osler partner Chad Bayne tells Yahoo News Canada. “You can basically get high-quality engineers graduating from a number of schools in and around a lot of the major Canadian centres for a much cheaper cost than you would if you’re seeking them out in Silicon Valley or New York.”

Canada offers tech companies several other ways to save cash as well, such as through taxes. While most foreign companies are already able to stretch their dollars a lot further here due to the lower corporate tax rate compared to other first-world countries, tech companies can benefit in particular because of tax incentives the Canadian government provides for things like research and development.

Its trade agreements with various countries around the world can be of benefit to some companies, while others, like those that operate computer server farms, may enjoy the cheaper electricity available in Canada,

The icing on the cake for foreign tech companies doing business here at the moment is the weak Canadian dollar. While it’s unlikely that tech companies are scrambling to open offices in Canada because of the faltering loonie companies that have already made the decision to invest here will see some additional savings.

“The lower Canadian dollar certainly makes it more attractive. Now the question: is the Canadian dollar going to stay there,” explains Troy Crandall, an equity research analyst at MacDougall, MacDougall & MacTier. “The No. 1 thing businesses have to concern themselves with is the outlook for the volatility in the dollar. If we get huge swings, that will really throw off investment.”

Outside of that, some American tech companies may just want to invest in Canada because it is Canada. With our similar cultures, shared time zones and the fact that Canada has been named one of the greatest places to live many times over, our country is almost as good as home for U.S. giants.

“If you do have to pull people from outside of Canada to go work in Canada, there shouldn’t be a lot of reason why they wouldn’t want to,” Crandall says.

Studies have also shown that Canadians are less likely to want to change jobs, are more satisfied with their jobs and less likely to ask for raises, which all makes Canada a great place to find new employees.

And for the tech companies in particular, they have a number of great Canadian cities to set up in, each with their own benefits.

Setting up shops

Becoming nearly synonymous with technology, Waterloo has been a natural place for tech companies to set up, especially to grab new graduates from the University of Waterloo. The area does offer many other skilled workers, too.

“We’ve seen lots of job cuts at BlackBerry over the past few years. These are highly skilled and experienced people that are now back in the pool and available for Canadian startups or American tech companies coming to Canada,” Crandall explains.

Ottawa has had a rich history in the tech industry as well.

“Harkening back to the good old days in the ’80s and ’90s, Ottawa was an epicentre of technology in Canada,” Bayne says. “There’s still a lot of significant engineering talent out there.”

Canadian tech darling Shopify is a good example that technological innovation is still alive and well in the nation’s capital.

As the country’s largest city, it’s only natural that Toronto is also big in tech as well.

The “GTA [Greater Toronto Area] is very robust. If you’re working on health software, if you’re working on digital media, if you’re working on FinTech, [the] GTA is the place to be,” says Karna Gupta, president and CEO of the Information Technology Association of Canada.

Another hot spot is Vancouver.

“Facebook has established an office in Vancouver, and a lot of other companies are looking at that spot as well because of the geographical [proximity to] Silicon Valley.” Bayne says.

For companies focused on video games, Montreal makes for a great place to settle down.

“In Montreal you have quite a large tech workforce as well, but it’s almost specifically around animation and video gaming, so you got pretty much all of the major video game studios in Montreal. This is kind of the video game capital of Canada right here and CGI [computer-generated imagery] capital, too,” Crandall says.

With so many great cities for tech companies to call home, it’s hard to go wrong. While some believe Apple has chosen to open up office space in Ottawa due to the Apple Car, some experts believe other Canadian cities would’ve also been a good choice as well. Crandall says Montreal would’ve been a good place for Apple to research and develop the Apple Car.

“Most people tend to speculate that Apple’s new car will be an electric car, and the Government of Quebec has been one of the biggest sponsors of electric vehicles,” he says. “Hydro Quebec is one of the largest electricity generators in the entire North American continent and has a lot of its own technology towards electronic cars and charging stations.”