[deepspace]

As someone who has worked in the Canadian tech scene for 25 years, and rode two startups all the way to exit (i.e. acquisition by US companies), in my opinion the problem has nothing to do with exit mindset, good angels, bad angels or SRED.

It is all about talent retention. Up until early 2000, Canadian tech salaries at least somewhat kept pace with US salaries, albeit 20-30% lower.

After the dot com crash, however, for some god-forsaken reason, the surviving tech companies decided that keeping salaries low was the new path to profitability. Every year the HR departments in Vancouver and Toronto do a hush-hush survey among each other and fix their salaries to the exact same level - maybe 2% but usually closer to 1% higher than the previous year.

The result of 20 years of this is that Canadian tech salaries have fallen ridiculously behind those of US companies, resulting in a massive brain drain to the south.

Now that Amazon, Microsoft and Google are setting up shop right here in Canada, the talent drain away from Canadian companies is only accelerating.

I have no idea what it will take to make companies realize that long term success requires retention of top talent and that that in turn requires paying competitive salaries.

[DanHulton]

Literally just left a really enjoyable job with a Toronto company for a California company that pays 50% more. This is completely correct.

[jonwithoutanh]

I made a similar move in BC and went from ~60k CAD a year to ~170k CAD. It's tougher work for the American start up but the pay differential is too big to not take advantage of. I feel like I'm throwing years of my life away to work if I work for a Canadian company.

The work is remote, I still live in the same place, but I've increased my income by 3x, I don't see how I could justify staying with a Canadian company.

[guytv]

Curious here. if you factor in cost of living differences, what is the resulting uplift?

[otoburb]

Semi-flippant response forthcoming, but if you factor in cost of living differences in their respective local currencies (e.g. moving to NYC or SF pre-COVID), healthcare (pay more in the US), comparable taxes (NYC/SF) to Toronto/Vancouver, then you likely might come out roughly the same or slightly ahead in absolute amounts saved depending on the salary+bonus bumps.

The kicker though is that presumably many Canadians harbour some type of fantasy in their heads of moving back home after N years, at which point the conversion of USD back to CAD can tip the balance. Historically the USD has been worth more than CAD, except for two times in 1974 and 2007.

It gets worse because Canadians that come down for "just a few years" probably end up staying longer since the original logic that drew us down in the first place is likely still valid. Throw on top the overhead and friction of uprooting your settled life (friends and maybe kids) and then it becomes even tougher to go back.

Next thing you know, you're applying for a greencard and the rest is history.

[raverbashing]

I'm assuming the number is 50% higher right? like 100CAD to $150k ?

[usrusr]

You consider "66% of California pay" low?

[freeone3000]

Wouldn't you, comparatively? It's not like your quality of work changed, it's solely location-based.

[srtjstjsj]

Purchasing Power Parity. The raise could end up entirely going to rent and healthcare

[gabbo]

Quite frankly the "all your money will go to healthcare" meme doesn't really apply to the kind of person who's leaving Canada for a much high-paying US tech job. A person like that will in all likelihood be working for an employer that offers access to equal or _better_ health insurance than they would have access to in Canada. If it's a big tech company the employer will pay virtually all of the premiums beyond some token amount, and out-of-pocket maximums are dramatically lower than the incremental pay raise. And even if the employer didn't pay that, the premiums would still be dwarfed by the pay raise.

Rent is certainly higher in the Bay Area, though less higher now vs. a year ago, and even so, at the income levels we're talking here (especially if going to FAANG or a unicorn), there is very little chance you'll end up with less disposable income after rent and health care.

If you want to buy a property, you have your work cut out for you since real estate is insanely expensive, though. It's not too hard if you're a dual-income high earner couple but very hard otherwise and will take a number of years of savings. This is worse than the Vancouver/Toronto housing markets, but it's less worse than you think given how crazy they are now.

[colordrops]

They probably under-negotiated.

[somerandomqaguy]

>Now that Amazon, Microsoft and Google are setting up shop right here in Canada, the talent drain away from Canadian companies is only accelerating.

Maybe. Canada is bringing 400,000+ new immigrants per year until 2023 for permanent residence status, most of which are skilled workers of some kind. Probably a safe bet between that those three are setting up shop here in part because they can bring in international talent into North America more easily then with the US cracking down on it's immigration policies.

No idea on what effect it will have on salaries here though.

[blueblisters]

> Canada is bringing 400,000+ new immigrants per year until 2023 for permanent residence status

Canada is adding > 1% of its population in immigrants every year? I am curious if that is sustainable politically and economically. I suspect this will only drive down tech wages even further and put pressure on local housing markets, utilities, healthcare and social programs.

[HDMI_Cable]

There's this movement in Canadian political circles that calls for us to have a population of ~100 million by 2100.[1]

Their argument is essentially that Canada has a lot of space (especially with climate change and all [2]), and by bringing in a lot of people from other countries, that will make Canada a more competitive country on the world stage.

In my personal opinion, I don't have anything against the movement, its just that all of these people are coming to either Toronto or Vancouver, and so those cities are becoming more and more competitive, meanwhile more conservative regions like Alberta and Quebec have a labour shortage.

Also, this might have a weird effect on French (I'm a french speaker so I might be a bit biased), but a lot of the people that are coming in right now (mainly from Eastern Europe, India, & China) only speak English, and not French. So we're seeing French go the same way as Scots or Gaelic did in the UK -- slowly dying.

Overall though, as long as we ensure that the population is distributed (I guess high housing prices are a good thing), and that people learn French, the 100 million thing isn't too bad.

--- [1] - https://www.bnnbloomberg.ca/canada-needs-to-get-to-100-milli...

[2] - https://upload.wikimedia.org/wikipedia/commons/thumb/5/5a/Ko... - Note right now, Only Toronto - Windsor has that light blue climate (same weather as New England), and in 2100 most of Canada will, while southern Ontario and BC will have the same weather as Washington or Normandy.

[slothtrop]

We're certainly not building fast enough if that's the plan in earnest. Exceeding a certain rate of immigration also suppresses wages, according to this - https://www150.statcan.gc.ca/n1/pub/89-001-x/89-001-x2007001... . That is a ticking time bomb for public discontent as we'll simultaneously be dealing with increasing automation.

In theory, it could be done well, but it won't. All these other factors will be ignored which is just going to lead to a long wave of Conservative government in the future.

[HDMI_Cable]

I don't think the 100 million figure is exact, its more of ambitious target that we'll try to get to, but ultimately won't affect much if we're ~20 million short or something.

or sure wages are lower because of it. But I don't think there'll be much discontent just because immigration is not as heated an issue in the US, and we have more room to grow (especially on the infrastructure side).

However, we do have to consider that immigration does allow for businesses to grow faster, because our main bottleneck -- population, becomes less of a concern. Automation is a big concern in this regard, but we can just kick that can down the road.

[sershe]

Doesn't Canada have special immigration programs for specific provinces that are better/offer faster path to citizenship/etc. to try to solve this problem? I am pretty sure I remember Quebec had one that was better than BC (I used to be an immigrant in BC).

[jbarham]

You're probably thinking of the Quebec Immigrant Investor Program (https://www.immigration.ca/quebec-immigrant-investor-program). In theory applicants should "intend to settle in the province of Quebec", in practice most of them end up in Vancouver or Toronto.

[gabbo]

Beyond the QIIP, there are a whole host of provincial nominee programs where provinces can set their own criteria that are different from the federal government: https://moving2canada.com/provincial-nominee-program-pnp/

[HDMI_Cable]

I think its done on a federal level, its just that they make it easier to immigrate to some regions (like Quebec) vs other regions (like BC).

[srtjstjsj]

Canada also adds 1% to its population in babies, who can't work at all, and are fully dependent on others for housing, healthcare, and social programs.

[slothtrop]

This is also a product of immigration. The fertility rate is otherwise stagnant.

[raverbashing]

The number is probably lower but still the bar is high for qualified immigrants (then there's the familiar reunion/refugees/etc)

Too bad Canada treats most of them like they came in a dinghy from some weird 3rd world country and leaves some of them in survival jobs (especially in a certain big eastern province)

[MartianSquirrel]

Canada has been at it for quite a while, otherwise the economy would be stagnating. And it has the advantage that it can chose its immigrants based on the market's needs. Compared to other countries, people coming to canada are also highly skilled:

> Over half of recent immigrants have a bachelor's degree or higher [0] > Recent immigrants were even more likely to have a master's or doctorate degree, with 16.7% of them holding these graduate degrees in 2016. [0]

[0]: https://www150.statcan.gc.ca/n1/en/daily-quotidien/171129/dq...

[iridium_core]

Its sustainable politically if you call anyone who opposes the scheme racist - only a single country in the top 10 migrant contributors to Canada is of European heritage:

https://www.cicnews.com/2020/02/a-quarter-of-canadas-immigra...

This is already causing long-term social problems, like sex-selective abortion which is prevalent in Indian communities in Canada even after multiple generations:

https://www.sciencedirect.com/science/article/pii/S170121631...

If the USA is restricting immigration, and Canada is not, this is just another driver for the top talent to flee Canada to the USA.

Canada might succeed in becoming a dumping-ground of migrants, a country of cheap back-office labour and expensive housing, but that sounds like a terrible place to live or develop any cutting-edge technology.

[DaiPlusPlus]

> Every year the HR departments in Vancouver and Toronto do a hush-hush survey among each other and fix their salaries to the exact same level - maybe 2% but usually closer to 1% higher than the previous year.

Collusion like that would almost certainly be illegal - do you have a source for that?

[wvenable]

There is an entire industry around the collection of and aggregation of salary, benefits, and perk information. Every year your HR department pays a firm, fills out these surveys, and a few months later gets a report on salary ranges and perks for their industry.

If you think about it then it makes perfect sense, how else do businesses know they're offering competitive salaries, benefits, and perks?

Source: I consulted for a company that does these surveys and aggregates the results.

[DaiPlusPlus]

> how else do businesses know they're offering competitive salaries, benefits, and perks?

I would assume from how many applicants negotiate - or outright reject - their job-offers

But yeah - I forgot about the consulting companies that do the survey thing.

But we have our own! https://www.levels.fyi/

[pm90]

Interestingly, I haven’t ever seen actual candidate data used to determine compensation. Ie companies almost never use a candidate demanding more to actually change anything. It’s all based on these “professional comp surveyors” as the parent has described.

[DaiPlusPlus]

Unrelated: I'm sure we have our own fantasies of potential employers (or past-employers) begging us to work for them with them increasing their offers or offering other benefits - but I'm curious if that's ever actually happened to anyone.

[sokoloff]

Negotiations for big, non-standard benefits (custom health plan, greater retirement match) are practically impossible.

Negotiations for a custom salary are entirely normal IME.

[freeone3000]

You should absolutely negotiate salary. Saving a few ten thousands a year on salary for a department doesn't really mean that much to your manager or to the company, compared to filling that slot in the org chart.

[dismayedjim]

It is but it happens all the time. Google, Facebook, Amazon, and the rest all have been caught doing it on a large scale. Most of them even agreed not to hire from each others employee pool.

[chrisdinn]

I agree 100%. It’s all about talent. The existence of the TN visa ensures this will continue to be a problem until founders/investors learn this lesson. Any Canadian university graduate can go work as a “computer system analyst” (but not a programmer wink wink) in the US at anytime. That means we are constantly competing with US startups for talent, any salary advantage you think you have is because your best team members haven’t realized that yet.

[jvergeldedios]

But doesn't what you're describing reinforce the author's point? Tech firms in Canada aren't paying high enough wages to keep talent in their pool in order satisfy profit milestones rather than pursuing growth. That's the exact difference in mindset the author points out.

[sershe]

I can confirm that.. In 2010 I was looking for jobs in Vancouver after working for a US company there for the US-level salary, and the salaries in local companies were sorta ridiculous. I moved to the USA.

Btw, it was also really difficult to find a primary care doctor in Vancouver at the time, when I finally found one taking patients after a while, he (an older guy who I assume just like living where he grew up) told me that the reason is that all the doctors move to the USA if they can.

[throwawaysea]

The hush hush survey is something all tech companies do in the US as well. They report their salary information to a third party company who then shares industry data back with all participants. I am not sure how this is not an illegal price signaling scheme. I heard this from a person who worked in compensation at a FAANG company.

[pm90]

This is true. It’s not illegal probably because why would it be? They’re “just taking surveys of aggregate salary data”.

[ChuckNorris89]

This happens in EU as well. Wage suppression is real.

[forgingahead]

Thanks for sharing this. What is the solution though?

"Paying salaries competitively" can also be rephrased as: "Raise as much money as you can and keep salaries on an upward trajectory". Optimising for profit is normally a good, healthy thing, but given the cheapness of capital (printing etc) sloshing about, how does one go about and build a profitable and steady company with good talent without getting yanked into this cycle?

All companies want talent, and capital has been freely available for the past 15 years in amounts previously unimaginable. It doesn't seem like there is any way to avoid this treadmill.

*Note, I am perfectly on board with paying competitive salaries, my point is that given the heavy market distortion because of all the VC money, that "competitive salary" isn't actually an accurate descriptor.

[Kalium]

> how does one go about and build a profitable and steady company with good talent without getting yanked into this cycle?

One approach might be to build a business by cleverly leveraging the value of competitively paid software engineers. You can accomplish quite a lot through focused effort. You shouldn't need fifty ICs to develop a profitable product.

Paying professionals doesn't have to come from absurdly oversized VC rounds. Sometimes it comes from steady, profitable, sustainable growth.

> *Note, I am perfectly on board with paying competitive salaries, my point is that given the heavy market distortion because of all the VC money, that "competitive salary" isn't actually an accurate descriptor.

You're right. It isn't. We should ignore the VC funded companies, and talk instead about the big players: FAANGs. That is the new definition of a competitive salary. I suspect you'll find it dwarfs that of many VC-fuelled startups.

[pm90]

You can use generous equity. By far this is the most powerful tool: you may not be a VC funded unicorn so you may have to grant more.

You can be creative in the kind of perks you offer (4 hour workweek? More PTO than competitors etc). Note that there is some evidence to show that shorter work week may even result in better productivity.

[ZephyrBlu]

"Paying salaries competitively" can _also_ be rephrased as "valuing your engineers".

[jariel]

It's not Canadian companies that are 'keeping salaries' low, it's Valley Companies (and to some extent, American companies) that are paying a lot.

Also - the USD varies at 1 to 1.5 CDN that has tremendous comparable effects.

The 'reason' is that a vastly disproportionate amount of the surpluses go to the winners.

'2cnd place is for chumps' - at least in the context of 'winner takes all' games.

Everywhere outside of the Valley is 'second place' and it's going to be hard to compete otherwise.

Another way of looking at it:

The market does not want Canada to be 1st place.

Canada is literally designing itself in every way to be a 'suburb' (i.e. as 'second place' country) - no specific identity (i.e. Post-Nation-Nation), high basic standard of living, high levels of material consumption, but no innovation, leadership or otherwise. The 'town square' is a shopping mall full of products and services designed elsewhere.

In crude market terms it's 'more efficient' to close the local coffee shop, put up a Starbucks and have workers take marching orders from Seattle where they can concentrate Product Innovation and R&D.

Canada used to have a few automakers - but with 'consolidation' they were all bought by US firms - which in raw market terms, makes some sense.

The same would happen to all protected industries: Bell/Telus, CTV/Global, CIBC/BMO - all of it them be snapped up instantly if they were not protected.

It doesn't matter if AT&T/Verizon are 'well managed' or 'poorly managed' relative to Bell/Telus - the fact is they are 15x bigger and that's that. 'Headquarters' will be in Virginia, not Toronto. And that's where the surpluses will go.

Canada brings in tons of 'educated workers' and then sends the best and brightest of them right away to the US (I've seen this happen time and time again). Who can blame anyone with 'no ties' to Canada moving on for 2x salary? So Canada gets 'good workers' ... and the US gets 'the talent'.

An Ontario MP, trying to attract Cisco to Toronto indicated that Canadians work for less salary than Americans and that he would do everything within his power to keep it that way.

So there you have literally the leadership trying to do what they can to keep salaries low, to keep the system firmly in '2cnd place', by design.

This is the Canadian National Strategy.

If you want to do something exceptional, go to specific places in the US where systems are designed for that.

The theory being that it's better than being in a left out US state like Arkansas, West Virginia etc..

In some ways, it's commendable, because Canada relative to the world has a really high standard of living, stable 'everything', good basic rights etc.. But of course, there is not a lot meaningful to do. That's the deal.

[danlugo92]

>Who can blame anyone with 'no ties' to Canada moving on for 2x salary?

Does that salary increase make up for the lost gov benefits (free healthcate etc?)

[jariel]

It depends on one's situation.

'Gainfully Employed' people are generally better off in the US. The healthcare there is great - when you are covered.

The risk comes for those unfortunate/unforeseen situations, and of course, when one doesn't have coverage.

Overall - it's one of those factors that goes into the equation - but for a young, single talented person, usually it's not a priority - or - it factors favourably.

It's a good point because for the 'elite economy' - US healthcare is just fine. Good in fact.

For the 'everyone economy' it's arguable that Canadian style (or something like that is better).

The H/C equation kind of reinforces what I am saying: exceptionalism vs. the commons + stability.

[dismalpedigree]

When the new employer is likely footing 90%+ of the bill (pretty standard in skilled professional jobs) then the answer is a clear yes. 100k CAD = ~$78k. Somebody making 100k CAD is likely commanding 110-120k USD at a minimum in the US. CAD equivalent is 140-153k CAD. Knock off $2k for healthcare out of pocket. Don’t forget the significantly lower tax burden. The worker cones out significantly ahead.

[DeRock]

> Don’t forget the significantly lower tax burden

Very dependent on where you work. High tech salaries are concentrated in California, where the tax burden at your numbers will be higher than most provinces. I remember doing a comparison of BC to California, and the cross over point was about $250k USD (where taxes become more favorable in California).

[dismalpedigree]

I’m referring to Middle America salaries in most mid sized cities. If those same people went to NYC or SF it would be another story. Likely 2x at least.

[gabbo]

Yes. Absolutely. It so much more than makes up for lost government benefits.

Health insurance working for a decent US tech company generally requires some out of pocket, but the amounts are really quite modest. Premiums are typically mostly paid by the employer and not considered part of your compensation. If you're single you'll probably pay nothing for insurance premiums and potentially up to a few thousand out of pocket if you're a heavy user of health care, and maybe $5k in the absolute worst case (and the out of pocket is often tax free). If you've got a family, you might pay a couple thousand per year in premiums and $10k in out of pocket maximum. These numbers are honestly chump change for people who are earning $50k-250k more, with better career prospects and more high paying employers to choose from if a particular job doesn't work out.

[bregma]

Yes, when you're young, healthy, and unencumbered by family. Like anyone who is mobile enough to make the move.

It's like the old bait-and-switch swindle.

[AzzieElbab]

Doesn’t Canadian tax system make higher salaries kind of pointless? Same with bonuses

[novok]

Tax in BC is about the same as California. And you don't have to pay for people's healthcare, so it might be cheaper from a 'total cost' perspective.

Sales tax is a few % points more, property tax is actually less in general for new buyers unless you've owned a place for +15 years in CA.

You don't get a mortgage interest tax deduction, but you have an UNLIMITED cap gains exemption on the house you live in that you sell in Canada, while the USA has a limit.

The tax system is overall more straightforward and not a pile of fade outs and patches like the US tax system is. Compare Canadian RRSPs & TFSAs to the entire 401k, IRA, Roth IRA, mega backdoor roth 401k, etc mess that they have in the US. There isn't a penalty to withdrawing from your RRSP so there really isn't much of a loan concept for them either. I don't think something like AMT exists in Canada.

Cost of goods in Canada are overall more expensive than the USA.

[raverbashing]

Do you think Californians or NYkers pay that much less tax?