Canadian Tech Companies Are Attracting More Overseas Talent, But Brain Drain To U.S. Continues
A new government program to bring foreign talent in more quickly is working, yet Canada continues to lose thousands of highly educated, skilled people to the United States each year
Ask the leader of any technology company and they'll tell you that hiring engineers, data scientists or mathematicians is one of their biggest challenges. STEM careers are the fastest growing part of the labour market, and some estimates put the need for technology workers at 216,000 jobs by 2021. To explore the talent gap, the FP talked to innovators who have left Canada to pursue opportunities with big multinational companies, and also those who have moved here to be a part of this country's digital transformation.
It took just six weeks for Johannesburg's Ideshini Naidoo to be hired, navigate the immigration process and relocate across the Atlantic to start work at Wave Financial Inc. as the Toronto-based tech company's new chief technology officer.
What used to be an ordeal turned out to be pretty smooth, aside from the drastic change in climate. "I went from South African summer to Canadian winter. It was quite a shock," she said.
In previous years, it would have been impossible for Wave, which provides accounting software to small businesses in more than 200 countries, to bring in Naidoo, who has executive experience in banking and e-commerce, so quickly - it would have been difficult to do in less than a year, never mind six weeks.
But Naidoo was fast-tracked under a new federal program called the Global Talent Stream, currently running as a 24-month pilot, which has helped fast-growing Canadian tech companies recruit and retain highly skilled talent from around the world.
The pilot is a key component of Ottawa's goal to stimulate innovation and encourage economic development and diversification and it has had some success, but industry executives say it at best solves half the problems tech-sector HR managers face, because Canadian tech talent continues to be lured by the buzz of Silicon Valley's biggest companies even as it's easier to bring in foreign workers.
The Global Talent Stream program is at least a start in addressing that issue. In the year before the program launched in June 2017, Wave hired two senior people from abroad in a drawn-out process that Ashira Gobrin, the company's senior vice-president of people and culture, said took nine months for one position and 12 months for the other.
"Imagine trying to hire 20 or 30 or 50 engineers. You're hiring for immediate needs. How would I even know if in 12 months that I will have an open position at that time?" Gobrin said. "Six weeks is a hell of a lot better than the nine to 12 months we were dealing with previously."
She said the program has been a massive boost to her company of 200-plus employees, allowing Wave to scale up more quickly than it otherwise could have. Further, she hopes the pilot program proves successful since there is otherwise expected to be a shortage of 20,000 engineers in the city of Toronto alone in 2020.
It's not just Toronto that needs more talent. A study released in November by the Communications Technology Council forecasts demand for 216,000 new tech workers across the country by 2021, a demand the Global Talent Stream program is supposed to help meet.
The program expedites the immigration and work visa processes in one of two ways. A "designated partner," or a company the government has identified as needing to hire skilled foreign workers, can refer potential job candidates through the program. Or, companies can hire foreign workers in select positions, identified by the government through its "global talent occupations list," for which there are insufficient Canadian workers.
The Council of Canadian Innovators, an association of roughly 100 small- and mid-sized tech companies, said that 20 per cent of its members have already made use of the Global Talent Stream to hire workers, including senior people with the intention of building teams around them.
One such company is Vancouver-based Terramera Inc., which develops plant-based pest control and other agriculture products. It recently hired Wiseborn Danquah as a senior scientist to build a team to develop safer products for controlling microscopic worms.
Danquah, a nematologist (an expert in roundworms), was educated in Ghana, the U.K. and the U.S. before moving to Vancouver through the program.
"Nematologists are very rare worldwide and also in Canada," said Karn Manhas, chief executive and founder of Terramera, who added that "bringing in Wiseborn was really important."
Marhas said Danquah is now training young biologists in his field, and the company's nematology team has expanded from zero to three people in under a year.
However, he also said the company has been able to build out other related teams - such as its engineering department, which has grown from zero to 30 people in a year - largely as a result of establishing its nematology team.
Critically, Manhas said, the company has not been forced to locate its research and development efforts outside of Canada, which was a potential concern previously.
Since Global Talent Stream's launch, the Ministry of Immigration, Refugees and Citizenship said companies have used it to hire for 3,100 new positions. In an email, the ministry said companies have also committed to establish 38,000 jobs for Canadians or permanent residents and invest $59 million in training domestically.
But while the program has helped bring in foreign talent, Canada continues to lose thousands of highly educated, skilled people from the technology sector to the United States each year.
"I think we are losing a ton of really talented people," said Lindsay Gibson, chief operating officer at Waterloo, Ont.-based TextNow Inc., a 107-person company. "It has to be hurting Canada."
TextNow has also used the Global Talent Stream to hire foreign talent and Gibson said the company is looking to grow its headcount to 130 employees.
Gibson said it's difficult finding people in Waterloo, or even southern Ontario, because of the lure of jobs in California's rich tech industry, which attracts many new graduates from domestic universities.
"They have offers from Facebook, Twitter. It's not like we can't compete financially. I just think they get excited about going to Silicon Valley, just because of the hype of it," she said.
An indication of Canada's brain drain is that the emigration rate to the U.S. has averaged about 0.7 per cent of the population since the mid-1990s, which is a major problem, C.D. Howe Institute chief executive Bill Robson said.
The think tank showed the rate at which Canadian talent migrates to the U.S. has, for the most part, trended upward since the 1980s, with the exception of certain periods when the American economy went into recession - such as the dot-com crash of the early 2000s, the financial crisis of 2008/2009 and most recently.
Between 2015 and 2016, while the U.S. economy continued to grow, data show the number of Canadians departing for the U.S. precipitously dropped - to a little less than 0.06 per cent of the population from about 0.1 per cent.
"The United States feels like a less friendly place to go," Robson said, adding the election of Donald Trump and his America First campaign could have impacted emigration figures.
Regardless of whether or not there has been a Trump effect on Canadian emigration to the U.S., Robson said Ottawa needs to address personal tax rates and business competitiveness issues in order to keep more domestic talent in the country now and in the future.
Tech companies certainly haven't seen much evidence that the southern flow of Canadian tech workers is ebbing, or that Canadians are moving back.
"All of us know people in the U.S. We know tech folks in the same circles. A lot of them are considering or actively talking about coming back," ThinkResearch chief executive Sachin Aggarwal said. "I can't say that they're coming back in droves."
Aggarwal said finding senior talent is still a major problem, noting that he currently has 30 vacancies at his company of 220 people.
"We don't have a generation of tech companies that has produced (senior people)," he said. "When we're looking for senior roles in the first place, they don't exist."
Aggarwal said the Global Talent Stream program is beginning to help tech companies identify and bring in more senior engineers and other senior people, but many domestic companies haven't hired internationally before and therefore don't have the skills to do it well.
"It's useful, but we're not talking about numbers that are going to equalize it," he said of the flow of people moving south.
Wave's Naidoo said one area that needs improving is marketing the country's high-tech companies more directly to overseas talent.
"Maybe you guys need to market it a little bit more. I kind of discovered it by accident," Naidoo said of Canada.
She visited Canada on vacation, found the country was home to a burgeoning tech sector and reconsidered her list of desired destinations. "Up until then, I would have thought about the U.S. and Europe," she said.
Naidoo ended up turning down job offers in both the U.S. and Europe to pick Canada as a landing spot.
"I had seen some of the things that had been done to make sure that women and minorities were being looked after and heard," she said. "As a female engineer, to have a platform like that to work from, was very encouraging."
Now, Naidoo is discovering not all government programs in Canada are as streamlined as the Global Talent Stream. Laughing, she said has now applied for permanent residency in Canada and found the process considerably more complicated.