Montreal, like other Canadian hubs, hopes to attract ever more US workers and investors
Google’s $3.4 million investment in the Montreal Institute for Learning Algorithms (MILA) and new lab opening in The City of Saints not only highlights the company’s banking on artificial intelligence, but its faith in Canada’s ICT industries to help it in that quest.
Montreal is running neck and neck with Toronto and Vancouver to attract talent and incubate businesses. Though Ontario holds a lead over it, Montreal remains, “the second most popular location for most types of ICT jobs” after Toronto according to the Canadian Information and Communications Technology Council, and over 222,000 people are employed across various industries, from gaming to AI R&D.
AI in from the cold
The lab will be led by University of Montreal and Twitter alumnus Hugo Larochelle, whose like-minded associates at MILA are already heavily invested in deep learning applications. About half of Google’s total research funding in Canada goes to AI, according to Wired. And MILA already has a startup incubator for this kind of research, led by Yoshua Bengio: Element AI, which is committed to training talent in a field where expert shortages are being felt all around.
Larochelle’s own operation will be part of the larger Google Brain project, and Google is also involved with NextAI, a nonprofit initiative to build up AI infrastructure in-country. Canadian academia has long been supportive of this work, even as it fell off elsewhere when prospects failed to materialize, and, as Recode put it, the money just dried up. But now, as The Star reports, MILA is attracting interest and funds from Google and other industry majors – alongside $150 million from the Canadian government invested in local universities’ AI work.
Startups can count among Montreal’s advantages affordable rents, low operating costs, a supportive government that keeps taxes low, and a strong higher education sector to provide trained employees. “Montreal has made incredible strides over the last few years,” according to Philippe Telio at of the International Startup Festival. Speaking to Montreal’s startup scene last year that, “We have an extremely tight and cohesive startup ecosystem, with tremendous community and government support.”
Gaming is probably the most visible aspect of the ICT economy in Canada. According to the Entertainment Software Association of Canada, the industry employs over 20,000 people and is worth over $3 billion. In terms of employees, Canada ranks third after the US and Japan.
Several major game developers have offices in Quebec, in addition to others around the country. Some, like Warner Brothers, Eidos or Ubisoft, employ several hundred people each in Montreal. There are also smaller satellite studios for other majors like Square Enix and Electronic Arts, as well as a number of other big-name companies like BioWare.
Overall, Quebec accounts for more than half of the national workforce and a third of all active studios. Most of these are the larger companies employing over 150 people.
Their presence is actively sought after by the provincial government, which offers a tax credit of 30%, plus an extra 7.5% for a French language localization. (Not all companies take advantage of this, though.) As is increasingly the case elsewhere, mobile gaming is coming to account for more growth compared to big-budget console projects, and Canadian studios have to adjust to this fact since historically, mobile gaming has been small there. Most of these games, notes Windows Central, are for the export market, especially to the US.
Beyond gaming and startups, Canada is also an attractive place for cloud computing services to open data centers. Oracle and Microsoft all have operations there, and industry giant Amazon will be coming in soon, too.
Montreal is not without its challenges to ICT development, though. VarageSale, one of several new online marketplaces aiming to be a “Craigslist killer,” was founded in Montreal, but eventually relocated to Toronto. According to the company, the main reason for the move was the need for a bigger talent pool to recruit from, something the city could not provide on its own. Although the company was hiring in Montreal, CEO Carl Mercier said in 2015 that Toronto and Waterloo were also, “great places to recruit from and you’re not competing with Facebook or Google for talent.”
Waterloo, of course, is famous as the home of BlackBerry Limited, co-founded by Canadian nationals Mike Lazaridis and Douglas Fregin in 1984.
That distance from Silicon Valley, of course, also applies to Montreal and has helped maintain the city’s startup culture. According to Canadian expat and C100 co-chair, Katherine Barr, the strong sense of community helps make up for the small size and early-stage foci of the sector. This distance, though, has also led to some problems, as The Globe and Mail found when it interviewed a number of successful startup founders who’d come out of there, including Barr and Mercier. Another, Daniel Robichaud, the founder of Password Box, also told the newspaper that one of the biggest issues was financing: “It’s not a place to raise funding.”
Although funding remains an issue, it is not for a lack of trying on the part of entities like Teralys Capital, which earlier this year concluded an (oversubscribed) $375 million innovation funding drive; Montreal’s own TandemLaunch, which, closed a $15 million Venture II round; and Relay Ventures’ $150 million fund.
Overall, as Geektime has reported previously, venture capital is becoming more readily available in Canada, with $2.5 billion raised in 2016 so far, with Montreal rising in the North American rankings, though it still trails the largest US locales, like San Francisco, New York, and Boston.