Trudeau vs Trump Lures Silicon Valley and Students to Toronto
(Bloomberg) -- Silicon Valley startups are tapping into Toronto’s tech talent.
Okta Inc., which JPMorgan Chase & Co. calls one of the fastest growing public software firms, opened a 60-seat office this month on trendy King Street West. Lured by a deepening pool of engineers in a city routinely ranked among the world’s most innovative, the company is following peers such as Uber Technologies Inc. and Amazon.com Inc. across the border.
Okta chose Canada’s biggest city because it’s home to the University of Toronto and is near the University of Waterloo, which are "educational sector leaders in developing future tech leaders," said Armen Vartanian, vice president of global workplace services. "With respect to the talent supply that’s there, this is effectively a no-brainer for us."
A big draw for start ups is a jump in potential graduates as U.S. President Donald Trump’s policies divert foreign students to Canada. Sensing an opportunity to wean his economy away from a reliance on commodities, Prime Minister Justin Trudeau is offering fast-track visas to high-skilled workers and increasing funding for innovation.
Trudeau’s administration clarified on June 12 that only firms growing 10 percent to 20 percent can avail of a new program that brings high-skilled foreign workers into the country in as little as two weeks, effectively ringfencing the approvals for the tech sector.
He has also extended a popular venture capital financing program started by the previous government and added another C$950 million to spread around tech hubs in Canada. He gave C$125 million ($96 million) specifically to support the country’s budding artificial intelligence research programs.
"The tech innovation ecosystem in Toronto has just been blowing up," said Bilal Khan, founding managing director of OneEleven, a startup accelerator backed by OMERS and Royal Bank of Canada, that’s played home to successful Canadian tech companies including Wealthsimple and Big Viking Games. "This is a government that gets it, that’s willing to invest both time and support to build out the ecosystem."
Meanwhile American applications to Canadian tech companies are increasing following the election of Trump. Shopify Inc. reported a 40 percent increase in the first quarter of 2017 over all of 2016, and Zoom.ai Inc. saw a 31 percent rise from nearly zero for engineering roles, Karen Greve Young, vice president of partnerships at MaRS Discovery District, another Toronto tech incubator, told Bloomberg TV Canada.
Uber last month hired University of Toronto Associate Professor Raquel Urtasun to lead its first non-U.S. branch of the Advanced Technologies Group at the MaRS Discovery District. In a blog post, Travis Kalanick, former CEO and co-founder, said "Toronto has emerged as an important hub of artificial intelligence research, which is critical to the future of transportation."
Shares of San Francisco-based Okta, the $2.2 billion company that helps companies secure their internal communications, rose more than 38 percent when they debuted this April and are trading 37 percent above their offer price.
Back in the city’s schools, students cite career prospects and diversity as an important plus for Toronto. That’s especially true "at a time when there is political turmoil in other parts of the world," Daksh Sikri, an Indian-born recent engineering graduate from the University of Toronto, told the campus newspaper.
Rival University of Waterloo is overseeing a C$88 million building project to accommodate 1,200 more engineering students. Some C$33 million of this was funded by the federal government, said Pearl Sullivan, Waterloo’s dean of engineering.
Talented job applicants are receiving multiple offers from competing companies, a precursor to increased salaries, according to OneEleven’s Khan. Meanwhile employers applied for about 16 percent fewer U.S. H-1B visas for highly skilled workers this year than in 2016, possibly reflecting concern that the Trump administration is taking a more restrictive approach to the program.
"Words matter," Khan said, referring to Trump’s protectionist rhetoric and growing sentiment that the U.S. is closing to immigrants. "It’s incredible because at that exact moment, Canada threw its doors wide open."