In many ways, Canada’s tech sector growth is Toronto’s tech sector growth.
The largest city in Canada is also recognized for having the hottest tech sector in the country on just about every objective measure you can make, by a variety of different research analyses. While that growth has dipped overall in the most recent quarter, Toronto is still being recognized as a tech hub that’s competitive across all of North America, distinguishing itself from the burgeoning innovation communities elsewhere in Canada.
We’ve updated our Tech Sector Growth Map of Canada with data from 2018. To coincide with our Technicity event co-hosted with the City of Toronto on Dec. 12, we’re focusing on the data we’ve mapped there with the embedded presentation below and some analysis on the different layers you’ll find if you scroll down past the map. This map was created by Alex Coop, associate editor of Computer Dealer News, and myself using Esri’s ArcGIS mapping software.
Click through the slides below to view each layer individually in this presentation. Use the full-screen view for the best look, and be sure to click on the highlighted locations to get all the relevant details.
Here are the sources of data you can explore in our custom map below:
PwC and CB Insights MoneyTree Canada Report – Q3 2018
This quarterly report tracks venture capital fundraising for companies across Canada, providing a snapshot of where the up and coming tech startups are located across the country. While Toronto is by far Canada’s best magnet for startups attracting venture capital, the third quarter of 2018 saw a decline there and across the country. Toronto startups saw 18 per cent less funding compared to Q2, and Q2’s funding was also less than the first quarter of 2018. There were also fewer deals made in Q3 than in Q2 (32 deals) or Q1 (42 deals).
Overall, Toronto startups raised $248 million in 30 different deals, making an average deal size of $11.3 million. That’s both more money total than anywhere else in Canada (Vancouver was second at $104 million) and a much higher average deal size than elsewhere (Montreal was second on this metric with $6.8 million). Of the six largest venture capital deals made in Q3, Toronto was home to four of those deals: Kira at $50 million, League at $47.2 million, Q4 at $38 million, and Integrate.ai at $30 million. However, while Toronto was the recipient of the most venture capital, it was not the source of it. All of the investors on the top six list are based in Montreal.
On the map above, explore the MoneyTree layer (look for the $ symbols) to see the Toronto firms that have received the largest VC fundraising deals over the past six quarters are located.
CBRE Research – 2018 Scoring Canadian Tech Talent
This Los Angeles-based commercial real estate services firm has a unique view into how the technology sector impacts cities across North America. It pits Toronto and other Canadian cities against U.S. tech hubs and ranks them all based on a score that reflects access to talent, the density of tech sector jobs, venture capital funding, housing affordability, and a quality to cost analysis. Not only does CBRE rank Toronto above all other Canadian cities in just about every metric (Waterloo, Ont. wins on the quality for cost ratio), but it ranks as fourth in North America overall.
CBRE’s analysis of Toronto says that making the shortlist for Amazon’s HQ2 location “thrust Canada’s tech market into the spotlight,” even if it wasn’t selected as the winner for its bid.
Toronto has the largest tech labour pool accounting for 28.9 per cent of all tech talent in Canada, but Ottawa had the densest concentration of tech workers not only in Canada, but all of North America. Toronto is by far the fastest-growing city for tech jobs, responsible for half of all tech jobs added to Canada since 2012.
Toronto is also rated at the top of the list for educational attainment and high-tech industry. It’s high-tech industry workers form 4.4 per cent of the labour force, above the 2.6 per cent Canadian average.
CBRE estimates that operating a tech firm of 500 employees in an office space of 75,000 square feet in Toronto would cost $39.1 million annually just for office lease and salaries. That’s a lower cost than can be found in Ottawa, Calgary, and Edmonton. It’s also about on par with Waterloo, Oshawa, Regina, and Saskatoon.
On the map above, look for the CBRE layer to see how Toronto’s tech sector has spilled over to surrounding areas. Look for the red Maple Leaf logos.
Narwhal List 2018
The University of Toronto Impact Centre produces this annual report, which also measures venture capital investment, but divides it by the number of years its been operating to create a financial velocity score. Toronto is the home to more fast-scaling tech firms by a wide margin. It has five of the top 10 fastest scaling firms tech firms in Canada – Ritual Technologies (1), Wealthsimple (2), League (5), Kira (9), and RadiomicsAI (10). It’s also home to 13 of the top 25 firms listed.
Other notes for Tech Sector Growth Map of Canada 2018
We weren’t able to update all layers from our 2017 map, so we’ve decided to keep some of that older data here to fill in a bigger picture of Canada’s tech sector growth in recent years. For an updated look at the Branham300’s Top 250 ICT Companies in Canada, they’ve put together an excellent Esri map that you can explore.
JLL Research is no longer producing its Technology Outlook for Canada report, so we’ve kept the most recent data from 2016 on the map for now.
We’d like to continue to develop this map with new data sources and new indicators of tech sector growth in Canada. If you have data you want to share with us, let us know in the comments below or tweet @brianjjackson.