One of Canada’s four major ecosystems, this team sees President Trump’s immigration blunder as Quebec’s technological gain
Last year, I had the opportunity to think of one of the most ridiculous headlines I could for April Fool’s Day. I pulled it off with the zinger of a headline, “Rogers Centre to be converted to massive refugee co-working space for startups if Trump elected.”
It sported fake quotes from real figures in Canada that promised to protect Silicon Valley’s most coddled entrepreneurs, replace the SkyDome’s astroturf with cherry wood floors, and consider the possibility of building a wall all along the US-Canadian border to keep out American refugees.
One year later, and we have been met with eerily similar events. President Trump has issued a six-month freeze on approving new H-1B visas starting in April. Many are debating what to do about real refugees from the Middle East fleeing the US for Canada, and there are loud whispers in the Bay Area about setting up satellite offices in Canadian cities to take advantage of what is perceived to be a more lenient Canadian immigration system.
Entrepreneur Michael Tippett founded True North following the election, providing logistical services to companies looking to move their visas-holding immigrant employees northward to Vancouver once Trump clamped down on H-1Bs.
It might be more lenient than the US these days, but discussion about loosening it up further has not exactly resulted in excitement among Canadian lawmakers.
“Even though our Prime Minister has stated that his government will loosen restrictions, it’s actually now taking longer to get landed immigration paperwork approved,” Montreal-based SourceKnowledge President and Co-Founder Patrick Hopf told Geektime in an email. While Hopf’s company has him focused on video networks and adtech most of the day, he has become an outspoken advocate for opening up Canada’s borders to take advantage of Trump’s hardline on immigrants, especially the professional ones.
Hopf is specifically trying to get Montreal onto foreign engineers’ radar, one of Canada’s top four startup ecosystems. It’s “the second most popular location for most types of ICT jobs” after Toronto according to Canada’s Information and Communications Technology Council. Americans definitely were looking to escape when Canada’s official immigration page crashed immediately following Trump’s election, and one can reasonably suspect some of those searching were based at startups in New York, Boston, or the Bay Area.
Yet, the city and its province Quebec might be the tightest of the tight on immigration policy up north.
“Quebec adds an extra layer of complexity. A procedure that should take two months now seems to be taking six to eight months for Quebec, which is obviously much too lengthy as speed is essential when onboarding new employees.”
That being said, Montreal is burgeoning. Microsoft bought deep learning Montreal company Maluuba last month, while Google invested $3.4 million in the local Montreal Institute for Learning Algorithms (MILA) and a new lab. Relay Ventures has put money into local startup automat.ai, and several other firms are hunting for prospects. The foundations for strong companies are there, much like Stanford serves as the bedrock for the San Francisco Bay Area, but the pool needs replenishing.
“With the available talent pool of developers in Montreal being essentially tapped out, the reality is that the province will need to absorb the added skilled workers without delay. It will become a critical success factor for technology startups here in Quebec and in the rest of Canada.”
“While the Canadian ecosystem has made huge strides in the last four to five years, with many innovative startups growing to scale, Canada’s quality of life, inclusive society and robust social services also make it an attractive alternative for skilled workers,” Hopf argues.
One could point to salary as a drawback for Americans making the trip, but if those Americans are moving from Silicon Valley it would be tough to argue about moving anywhere. Many US cities have a lower cost of living and provide more disposable income than San Francisco and its environs.
Canada’s top three metropolises do the same, but Montreal would be the cheapest. If you had a monthly salary of $7,900 (US) living in San Francisco, you would only need $3,396.50 (or $4,549.78 Canadian) to have the same standard of living, according to Numbeo. The problem is average salaries, as the average software engineer in Montreal might make $45,224.94 (American) according to Payscale, compared to $110,786 in San Francisco. The average engineer would lose money moving to Montreal, even with the lower cost of living.
Hopf admits that situation needs to improve but is extremely optimistic it will. He argues that throughout Canada, the cost of doing business is still very much cheaper. According to KPMG’s competitiveness index, Montreal is the third most competitive metro in the world falling just behind Mexico’s capital and Monterrey. On the other hand, San Francisco’s rising costs have kept it at the bottom of their rankings.
“I think we’ll see salaries start to become competitive with Silicon Valley over the next several years. Investors know that their dollar goes further in Canada due to the exchange rate and this, in turn, allows startups to offer more competitive packages to their employees. This trend will only escalate as the ecosystem grows.”
So should Montreal launch a specific initiative to attract US startups or venture capitalists to open offices there?
“Functionally, the favorable exchange rate, government-subsidized research, development tax credits and the affordable cost of housing already provide great incentives for US startups and VCs looking at moving to Montreal. What we’re lacking is a centralized hub like we see in the Silicon Valley and in the Ottawa/Waterloo corridor,” referring to Toronto and the startup-dense hub of Waterloo and Kitchener. “Montreal is missing that type of environment that can be a draw for growth-oriented startups to converge around. The Cité du Multimédia in Old Montreal was supposed to provide this, but it really hasn’t blossomed yet.”
Considering what Tippett’s True North is doing, which specifically targets current H-1B holders to set up shop by inviting them on a $6,000 tour of the city’s ecosystem, Hopf doesn’t necessarily endorse the approach for Montreal nor does he degrade the idea. From there, Hopf offered praise for highlighting the nearby opportunities in Canada, which could serve as a reservoir for a Silicon Valley economy fretting over the loss of critical staff.
“I think the individual trips themselves are less important than the exposure it provides for the Canadian tech industry. True North communicates that the Canadian tech ecosystem is serious about attracting the best possible skilled workers.”