Toronto has fast become one of North America’s premier technology hubs where companies attract top-tier talent with lucrative salaries that countervail the city’s housing affordability challenges.
“As a realtor, part of our due diligence is to log the careers and job titles of our clients and a growing share of my clients come from the tech industry, because it pays very well with six-figure entry level jobs,” Norman Xu, Real Estate Broker and team lead at Royal LePage Signature Realty, said. “They’re the group of people who can almost immediately afford a home because, for them, it’s easier to save money. I have noticed a trend among my clients where before they mostly came from other industries, but now more are coming from the IT industry.”
Xu added that tech salaries have become so competitive that workers in the field can easily afford to live as close to the city’s core as they desire, irrespective of how large the home is.
A Boom in Toronto's Tech Space
There have recently been some high-profile announcements from tech firms that they’re opening large offices in Toronto. Late last month, Meta announced it’s creating an engineering hub in Toronto that will create 2,500 well-paying jobs. Also last month, Walmart announced it’s hiring 5,000 new employees and opening large offices in Atlanta and Toronto, where 26% of all Canadian tech workers reside, which isn’t surprising because Canada’s largest city produces about 25,000 graduates from STEM-related studies every year. In a bid to keep Canadian tech talent on Canadian soil, Walmart says its Toronto office is seeking several hundred new hires.
Jamieson Jackson, Managing Director of the GTA Office Practice Group at Colliers, pointed out that the metropolitan area has at least four major tech hubs, including the waterfront and MaRS Discovery Districts, East Bay Front, and Cinespace in Mississauga.
“There are many more but that’s a smattering in Toronto,” Jackson said. “They have definite advantages; tech companies are driven by talent and want more gravity, they want other tech companies nearby for collaboration, recruitment and amenities. Toronto spent a lot of time and money creating those and it has put us in good stead.”
Tech Firms Seek Out Toronto's Benefits
The advantages Toronto has extend beyond its technology districts. Canada’s healthcare system is well esteemed internationally, and Ontario offers companies a non-refundable tax credit for research and development, which has enticed myriad tech firms to Toronto in recent years, with many more to follow suit. Canada’s welcoming disposition to immigrants as well as Toronto’s reputation as arguably the world’s most multicultural city have also played outsized roles in attracting major firms, Jackson says.
“According to stats from CreateTO, healthcare costs alone are around $10,000 per employee and that is going to save tech companies some major money. SR&ED [Scientific Research and Experimental Development] and other tax credits in Canada make the country a really amazing place,” Jackson said. “And then there’s the 25,000 STEM graduates a year in Toronto and those talent pools, plus those incentives, make it a great place to build a hub.”
Tech companies offer competitive amenities in addition to remuneration. In a bid to lure employees back to the office as the COVID-19 pandemic subsides, some of them offer daycare, which normally ranges from $2,100-2,700 a month per child at the city’s daycare centres. Other perks, like on-site bike biker lockers and showers, and healthy eating options are among the many creative perks tech companies in Toronto use to recruit and retain employees.
Pandemic Failed to Dent Tech Office Demand
Tech firms still drove office leasing activity during the pandemic -- interesting considering that a lot of companies were trying to offload space, even going so far as to sublet what they had.
“A significant percentage of the office market, particularly downtown, was driven by tech companies, even during the pandemic,” Jackson said. “The traditional narrative is that tech companies have gone 100% remote, but what they’re actually doing is taking more and more space as well as keeping what they have, because they need it for culture building, for knowledge transfer, but also for staff acquisition and retention. One of our clients is a mid-market firm in their industry and they said the office has been critical for them because they saw increased staff attrition as a result of bigger firms bumping up their entry-level salaries, but what allowed them to keep their staff was the culture and camaraderie on their team. But with everyone working remotely during the pandemic, they saw increased attrition.”
The perks are, indeed, significant factors for employees. Typically the standard for hiring is the worker must live within commuting distance of their office, but even then, Jackson says tech companies are flexible.
“Tech companies have been leading way to allow up to two months working anywhere in the world,” he said. “Live within commuting distance but if you want to take two months off and work in Costa Rica, go for it.”
