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From Alexander Graham Bell to the Canadarm, Canada has long been a hub for tech innovation. And within our country in recent years, few regions can rival Toronto’s skyrocketing tech industry. Big names like Google, LG and Samsung have all begun to looking to our city for future expansion. Uber recently made an investment here of $200 million over five years, and Microsoft will be adding 500 new jobs to the downtown core by 2022[1].
Capital investment in Canadian Tech
BDC Capital recently found that there was a 113% increase in venture capitalism in Canada between 2011 and 2016. And while the numbers may pale in comparison to capital investment south of the border, the drastic increase is worth taking note. The federal government has been quick to emphasize their plans to continue to attract tech investment to Canada, with the Minister of Innovation, Science, and Economic Development pointing to Microsoft’s new venture as “proof” of their efforts.
But capital investment isn’t the only option for Toronto tech start-ups either; Canadian tech grants are plentiful, and many never need to be paid back. The Venture Capital Action Plan provides $1 for every $2 given to a start-up by a private investor. The Scientific Research and Experimental Development Program (SR&ED) is a federal tax incentive for companies conducting research, and the Industrial Research Assistance Program provides tech entrepreneurs with funding and advice[2].
Unparalleled talent
According to the CBRE’s Scoring Tech Talent Report, Toronto has been ranked 4th worldwide for our talent pool of tech professionals. Given that tech is a knowledge-based industry, it stands to reason that talent would be a driving force for innovation and investment. In 2017, Toronto added more tech jobs than anywhere else in the world- more than Washington, DC, Seattle, and the San Francisco Bay area combined.
What’s missing for tech entrepreneurs?
Maclean’s has listed the three pillars of a healthy tech industry as:
- Quality start-ups
- Successful scale-ups
- Plentiful venture capitalism
And while Toronto is well on its way to strengthening each of those three pillars, the foundation isn’t yet sturdy. Venture capital investment still lags behind tech regions in the US and without the backing of healthy venture capital, when one of the incoming tech giants (say, Microsoft) offers to purchase a local startup, the financial implications become even more difficult to pass up.
Why should this matter? Because without the opportunity to spend time scaling up organically, a revolutionary technology is quickly swallowed up by a foreign company who reaps the benefit of the innovation. Toronto needs more chances for small startup tech companies to scale into giants in their own right, making a name for our city as a pre-eminent leader in the tech sphere on a global scale.
How Zeifmans helps Toronto tech start-ups
Since 1959, Zeifmans has been a trusted advisor to Toronto small businesses. As a member of Nexia International, our team has access to contacts in more than 115 countries worldwide. Our technology and startup clients benefit from our expert knowledge of government grants, venture capital attraction, stock options, financial reporting, and SR&ED filings.
Our services go beyond accounting to offer an unparalleled level of mentorship and support that creates the perfect ecosystem to sustain and scale Toronto tech startups. We arm our clients with a depth of knowledge that equips them to take advantage of every available opportunity.
For more information on Zeifmans’ services, reach out to Steve Metallo, Ezra Lauterpacht, Ahmad Aslam, Armand Sorra, and Brandon Swartz, who are members of Zeifmans’ Technology & StartUp team, at 416.256.4000 or email us at info@zeifmans.ca.
[1] Maclean’s, “What if the Toronto-Waterloo Corridor Really Becomes the next Silicon Valley”?, https://www.macleans.ca/economy/what-if-the-toronto-waterloo-corridor-really-becomes-the-next-silicon-valley/
[2] Tech Crunch, “Canada is North America’s Up-and-Coming Start-up Centre”, https://www.macleans.ca/economy/what-if-the-toronto-waterloo-corridor-really-becomes-the-next-silicon-valley/
