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Friday, August 11, 2017

Vancouver Canada cheap city to set up a tech firm

A report by Commercial Real Estate Research(CBRE) found that of 50 US and Canadian markets, Vancouver was the cheapest city to start up a new tech company.

CBRE has a full time staff of about 30 researchers spread across Canada. A typical tech company setting up in Vancouver would cost about $24 million a year US to cover both employee salaries and rent in Vancouver. In contrast the same company in the San Francisco Bay area, the most expensive area, would cost $67 million more than twice as much.
CBRE, Research Director, Colin Yasukochi said that the lower start up costs in Vancouver are due in part to the lower-priced Canadian dollar, but also more favourable immigration policies, and lower rental rates than many major US tech centers play a significant role. Yasukochi said: "I think there's a better supply demand balance in Canada with regard to the account workforce and the demand for it."
The average salary of a tech worker in Vancouver is $79,402 a year which is $34,000 to $44,000 less than they would receive for similar work in Seattle or San Francisco. However, some BC tech firms are aiming to lure workers to the province due to fears among workers in some foreign countries that Trump will impose strict visa restrictions on them. Allison Rutherford, Executive Director of HR Tech Group, that conducts a yearly salary survey of the BC tech industry said: "Yes our salaries are lower, so that's attracting big anchor companies to come here, because A we've got quality talent, and B, it's a reasonable place to set up shop."
However, Nils Anderson, a game designer in Vancouver said the lower Canadian wages might attract companies but they also drove senior workers to US sites where the pay was better creating a brain drain. Anderson said: "It's how markets work. The market pays what the market pays, and if nobody else in town is going to increase the wages ... then that's the offer you get here. As soon as you want to start a family here in Vancouver, it's like okay, can you do that on $30,000 to $40,000 a year less. When the cost of living here is basically the same as San Francisco, that's not really an option." Anderson also pointed out that Vancouver had not yet attracted big anchor tech companies such as Microsoft, or Ubisoft. He said if they set up shop in Vancouver wages would improve.
However, both Yasukochi and Rutherford said they expect the low wages in Vancouver not to last and that as Vancouver's tech sector grew, salaries would also. Yasukochi said: "I believe that as more and more companies discover the high quality of tech talent in Vancouver, then the relative value of the wages will start to go up."
The US is moving to tighten policies for H1-B visas for skilled foreign workers. However, Canada is waiting for a new streamlined process for worker permits to come into effect. As a result some BC tech companies are taking advantage of the fear created by US policies to recruit workers to come to the province. Igor Fatelski, CEO of Mobify a tech company producing apps for retailers says: "This uncertainty is really dialing down enthusiasm, especially for travel to the U.S. for long-term career moves. We're seeing that change slowly happen. We're seeing more and more interest from around the world from potential employees that want to work in Canada because they're not certain what's going to happen in the U.S." US President Donald Trump has recently announced that his government plans to suspend expedited applications for the H1-B visas. Fatelski said that more interest was being shown in coming to BC. Fatelski himself is an immigrant from Russia coming when he was 15. He now employs more than 100 people and will need more.
Navdeep Bains, Canada's Minister of Innovation said the government would act quickly to fast track work permits in order to attract highly skilled workers from other countries."We're taking the processing time, which takes months, and reducing it to two weeks for immigration processing for individuals [who] need to come here to help companies grow and scale up. So this is a big deal. It's a game changer." The change is to come through the Global Talent Stream a new program.

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