Vancouver’s tech sector is growing rapidly compared to the overwhelming majority of its North American counterparts, overshadowed only by Seattle and Toronto.
According to a report from the Downtown Vancouver Business Improvement Association (DVBIA), entitled State of Downtown 2022, Vancouver’s tech sector grew by 21% from 2019 to 2020, eclipsed by Seattle and Toronto, which grew by 22% and 26%, respectively. While that’s down from 30% in 2018-2019, it is nonetheless far and away ahead of competition.
Since December 2020, nine privately-held high-tech companies that are worth at least $1B have established bases in Vancouver, the report stated, a third of which are in the city’s downtown. In fact, American venture capital firms have started taking advantage of remote work configuring by investing in the local industry. Tipalti, a U.S.-based fintech company valued at $8.3B, just opened a satellite office in downtown Vancouver, citing the city’s vast home-grown talent pool and its accessibility as its main reasons for establishing its Canadian footprint in the Pacific Rim city.
According to CBRE’s 2021 Scoring Tech Talent report, Vancouver placed 11th in North America, due in large part to its globally recognized post-secondary institutions, and it is fourth among so-called ‘brain gain’ cities, attracting 11,256 in the last half-decade, indicating that the city’s tech industry is respected abroad. To put that into context, the New York metropolitan region had a brain drain in excess of 65,478 during the same period.
Vancouver also has low operating costs for American tech companies, which are almost all located along the west coast from California through Washington State. Of the top 30 tech markets identified by CBRE, the eight most cost-efficient for one-year terms are all Canadian, with Vancouver registering fourth place. As the DVBIA report explains, Canadian tech sector salaries are lower than they are in the United States, where software engineers’ average salaries are 50% greater than they are in Canada.
In fact, the average tech salary in Vancouver is $89,190, significantly higher than the $61,963 median salary earned by non-tech workers who are employed in the same industry.
Office vacancy in downtown Vancouver remains among the lowest in North America, although it’s much higher than it was pre-pandemic. While many companies tentatively planned to return to the office in the latter half of last year and early this year, especially in light of soaring inoculation rates, another wave of COVID-19 kiboshed any chance of that at the tail end of 2021. Office foot traffic peaked at 56% of the pre-COVID-19 baseline during the week of March 8, 2021, subsequently hovering around 30% and falling to a 17.3% nadir during the week of September 13, 2021.
Persistent Uncertainty in Vancouver’s Office Sector
The DVBIA’s report was cautious in acknowledging that it is not yet known how high the adoption rate will be for office space when the pandemic officially ends, but a survey by Research Co. noted that 38% of workers province-wide worked remotely during the pandemic, including those whose employers have yet to communicate return-to-office -- or not -- plans. The survey additionally noted that only 11% of remote workers are expected to return to their offices, 75% will work remotely at least once or twice a week, and 34% are mandated to be physically present in their offices at least three days a week.
Interestingly, the same survey revealed that 62% of Metro Vancouver workers would leave their jobs if they weren’t permitted to work remotely.
