Over $750 Million of Tech Investments Spur Historic Week for Toronto
The past five days have been a whirlwind of tech activity in Canada’s largest city, and now that the photo-ops and press conferences have subsided, the community can finally catch their breath.
It has been known for a while that Canada and its largest city, Toronto, has been on the upswing in terms of its tech scene, with countless articles—Techvibes’ own included—showing off growth in AI, cleantech, cybersecurity and more. Late summer and early fall is always a frenzied time for tech companies and it just so happens a lot of that action involved Toronto.
Microsoft kicked things off with a huge announcement, stating they would invest $570 million into their Canadian presence over the next five years. That money will be spread over several different initiatives, with the main focus being a brand-new Canadian headquarters spanning close to 140,000 square feet of Toronto’s prime real estate on lower Bay Street. That new location is set to open in fall 2020 and could bring up to 1,000 new jobs.
“Microsoft’s latest investment in Canada…will create hundreds of new jobs and benefit several cities, from Vancouver to Toronto to Montreal,” said Justin Trudeau, Canada’s Prime Minister. “I know our highly-skilled, diverse workforce will continue to attract tech investment in record numbers – growing our economy and creating new opportunities for Canadians across the country.”
Beyond the new headquarters, Microsoft also unveiled a $21 million investment of Azure credits for Canada’s Supercluster initiative as well as $10 million over five years for the Cascadia innovation corridor between British Columbia and Washington, meant to spur more cross-border innovation. The Seattle-based company will also overhaul sales centres and innovation hubs in other Canadian cities.
“This is an exciting time for Toronto with so much investment,” says Michele Romanow, co-founder of Clearbanc and dragon on CBC’s Dragons’ Den. As a serial entrepreneur and the leader behind Clearbanc—a startup that helps founders scale their business and access capital—Romanow knows the value large-scale investments can have on a tech hub.
“It represents everything we’ve always know about the Toronto ecosystem—we have incredible universities with world-class talent driven to build the technology of the future,” – Michele Romanow.
The investments didn’t stop there, as another globally-renowned brand made their own announcement two days later. Uber’s CEO Dara Khosrowshahi visited the MaRS Discovery District to share news of his company’s $200 million investment into their Toronto offices and labs. The new funding will go towards building an engineering lab in the city to expand Uber’s Advanced Technologies Group.
“At Uber, we recognize Canada’s commitment to innovation and the vibrancy of Toronto’s tech ecosystem,” said Khosrowshahi. “We want to support the innovation coming out of this great, diverse region.”
With this new move, Uber will bring their total employee headcount to over 500 in Toronto. Part of the investment will also help expand the company’s self-driving lab already based in Toronto, further adding to the city’s reputation as an automation and AI hub. The ride-sharing giant touted Toronto’s access to tech talent as well as its already-established presence in AI as major factors for their investment.
Finally, not to be outdone, Intel announced plans to open a graphics chip engineering lab in Toronto. The news was sandwiched between the Uber and Microsoft announcements, and though the news cycle pushed it to the side, it remains an important move by an established tech leader. The new facility will be the main operation centre used to design and fine-tune the company’s latest GPUs that are set to launch in 2020.
“[Toronto] was always on our radar. So when we were going to expand our dreams, we really wanted to tap into this great talent that exists there,” Intel’s VP of visual technologies told the Globe and Mail.
It’s hard to say that these investments from world-leading tech companies are anything but great for Toronto, but the announcements underscore the fact that these are international companies stepping in to take advantage of Canada’s rich talent pool and startlingly-low salaries. This is nothing new, as several large tech outlets have presences in Canada and will continue to, but when they are able to attract talent at the same rate as homegrown companies, problems may arise.
Anthony Lacavera is well aware of this dichotomy. As the founder of WIND Mobile and the chairman and CEO of Globalive Technology, Lacavera is a seasoned vet when it comes to scaling successful companies within Canada. He was vocal when Toronto emerged as a frontrunner for Amazon’s HQ2, saying the strong presence of international companies will eventually lead to a depletion of Canadian talent. Lacavera says that a strong focus on local growth should come hand-in-hand with these new international investment announcements.
“It’s always great to see Toronto recognized as a top destination for international companies. The announcements this week speak to the high quality and diversity of Canadian talent, and will no doubt add thousands of jobs to our economy,” he says. “At the same time, we need to support the continued growth of our local companies first and foremost.”
“It’s crucial we leverage our technology expertise towards building Canadian-made success stories that can compete with the Microsofts of the world,” – Anthony Lacavera.
It will be a couple of years before these latest investments see any windfall in Toronto, so right now it’s all smiles and handshakes for leaders in the city. In 2017, Toronto created the most technology jobs in North America, beating out San Francisco, Seattle and New York City combined, which means there is a huge demand for talent. With Intel, Microsoft and Uber throwing their hats into the ring, it may result in a tougher talent ecosystem for founders and business owners—but at least on the bright side, it means more competitive wages and better working environments for the workers themselves.
Any way it is interpreted, these new investments mean Toronto is catapulting up the ranks as a major hub for technology innovation.
