YOUR REGION FOR BUSINESS
Prepared for: Financial Services Innovation Centre
October 2018
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CONTENTS
INTRODUCTION ...... 3
ABOUT TORONTO GLOBAL ...... 3
CANADA’S LARGEST & MOST DIVERSE ECONOMY ...... 4
POPULATION & DEMOGRAPHICS ...... 4
FUTUREPROOFED TALENT PIPELINE ...... 5
TORONTO’S STRONG & RESILIENT TECH SECTOR ...... 6
TORONTO’S TECHNOLOGY ECOSYSTEM ...... 10
RECENT INVESTMENTS IN THE TORONTO REGION ...... 11
LOW COST BUSINESS ENVIRONMENT ...... 14
GENEROUS R&D INCENTIVES ...... 18
WE SPEAK YOUR LANGUAGE ...... 19
ADDITIONAL INFORMATION ...... 20
ADDITIONAL GOVERNMENT SUPPORT & INCENTIVES ...... 21
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INTRODUCTION
The Toronto Region has become a magnet for world-class companies who are looking to grow their technology platforms, and presents the ideal location for your company’s next engineering centre. As a global technology hub, the Toronto Region provides access to high quality talent, outstanding industry expertise and increased collaboration between businesses, research institutions and government.
The following information package provides a high-level overview of the Toronto Region’s business climate, highly educated workforce and attractive environment where global companies come to do business.
Why the Toronto Region?
+ We grow talent. The Toronto Region is home to the most educated workforce in the OECD. With support from the Vector Institute, universities and government, the Toronto Region is building the technology workforce for the future
+ We attract talent. Our growth is strengthened by immigration. With programs like the Global Talent Stream, we accelerate immigration to attract highly-skilled workers and students
+ We retain talent. We lead North America in almost every quality of life metric, which is why highly qualified tech workers and professionals want to call Toronto their home
Key Considerations
+ Thrive in the fourth largest city in North America, and one of the fastest growing regions in the world
+ Do more with less; with R&D tax credits that can yield savings of up to 61% on your R&D spend, and unused credits can be carried back for 3 years or forward for 20
+ Become part of a thriving ecosystem centered around 18 universities and colleges which aim to produce over 50,000 STEM graduates annually, and home to the largest source of tech talent in Canada
ABOUT TORONTO GLOBAL
Toronto Global is the trusted partner for companies exploring expansion opportunities in the Toronto Region. Supported by Federal, Provincial, and Municipal governments, we offer complimentary and customized services that range from detailed market research to support decision-making, to providing local connections to facilitate the establishment of operations. Your success is our success. 3
CANADA’S LARGEST & MOST DIVERSE ECONOMY
GDP generated in the Toronto Region represents more than 20% of Canada’s economy – outpacing entire provinces including Quebec (Montreal) and British Colombia (Vancouver).
A $331 Billion Economy in 2016 Source: Conference Board of Canada, 2017
700,000
600,000
500,000 Toronto Region 331 Provincial 400,000
300,000
200,000 302 319 290 100,000 217
58 55 0 32 Ontario Quebec Alberta British Columbia Saskatchewan Manitoba Nova Scotia
POPULATION & DEMOGRAPHICS
Representing the fourth largest city in North America, the Toronto Region is Canada’s largest metropolitan area with a diverse population of over 6.4 million. Encompassing 26 dynamic, growing communities – the Toronto Region is experiencing strong and steady growth and is expected to reach 9.1 million residents by 2036. This ensures continued access to top talent, a diverse ecosystem, and a growing economy that’s unrivaled by many major North American markets.
Top 5 Largest Cities in North America: Top 5 Largest Cities in Canada: 1. Mexico City – Population: 8.9 million 1. Toronto – Population: 2.7 million 2. New York City – Population: 8.4 million 2. Montreal – Population: 1.7 million 3. Los Angeles – Population: 3.9 million 3. Calgary – Population: 1.2 million 4. Toronto – Population: 2.7 million 4. Ottawa – Population: 0.9 million 5. Chicago – Population: 2.7 million 5. Edmonton – Population: 0.9 million
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FUTUREPROOFED TALENT PIPELINE
Toronto Grows, Attracts and Retains Talent
Population Change, 2011-2016 Source: Statistics Canada, 2016; U.S. Census Bureau, 2016
700,000 The Toronto Region is the 4th largest 600,000 metro in North America and one of the fastest growing 500,000
400,000
300,000
200,000
100,000
0
Total Labour Force Size Source: Statistics Canada Labour Force Survey, 2017; US Bureau of Labour Statistics, 2017
12,000,000 The Toronto Region offers the largest 10,000,000 labour force in Canada and one of the top in North America
8,000,000
6,000,000
4,000,000
2,000,000
0
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TORONTO’S STRONG & RESILIENT TECH SECTOR
High-Quality, Low-Cost
+ The Toronto Region is the largest technology hub in Canada and fourth largest in North America
+ IBM, Alphabet (Google), HP, Cisco, Microsoft, LinkedIn, Facebook and Twitter all have research and development centres in the Toronto Region
+ Post-secondary schools in the Toronto Region offer more than 200 co-op programs in technology fields – including the University of Toronto’s Computer Science Program
+ Average salaries for STEM talent in the Toronto Region are significantly lower than major markets across the United States at similar or higher levels of education and training
Tech Talent Quality vs Cost Analysis Source: CBRE, 2017 Scoring Tech talent
140,000
San Fran/Bay Area 130,000 Seattle 120,000
NY/NJ 110,000 Austin Boston
100,000 Atlanta Charlotte Raleigh-Durham Washington, DC
90,000 Chicago Phoenix Kansas City
80,000 Miami
70,000
Toronto 60,000
Exceptional Very High High Good
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A HIGHLY EDUCATED LABOUR FORCE
Higher Education Degrees by Specialization
More people within the Toronto Region have higher education degrees per 100,000 people than any most other major U.S. cities.
When you break down the number of higher education degrees by programs of relevance and the hiring requirements of technology intensive businesses, the Toronto Region excels. We are strong across all categories.
ARCHITECTURE, COMPUTERS, MARKET ENGINEERING & MATHEMATICS & BUSINESS OTHER STEM STATISTICS
New York 855,268 301,265 1,162,741 Los Angeles 528,701 141,484 613,869 rd th th Toronto Region 460,120 (3 ) 111,810 (5 ) 364,590 (6 ) Chicago 419,188 128,440 559,129 Houston 325,277 61,543 345,653 San Francisco 313,411 131,827 296,780 Boston 286,570 89,627 301,397 Philadelphia 276,538 73,115 327,636 Atlanta 244,212 88,661 395,689 Seattle 233,817 90,342 193,319 Montréal 207,830 36,060 190,540 Vancouver 154,800 31,675 116,060 Pittsburgh 120,342 30,291 124,127 Austin 104,230 36,915 118,976 Charlotte 90,462 31,892 156,289 Ottawa-Gatineau 79,050 19,855 50,835
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Growing Capacity in Postsecondary
Universities and colleges in the Toronto Region are granting more and more diplomas and degrees each year, creating a robust talent pipeline to support our economy’s future growth. The number of business and STEM degree holders has grown more in the Toronto Region than the number of university graduates overall.
University Enrollment in the Toronto Region
COMPUTER YEAR ENGINEERING BUSINESS MATH SCIENCE
2016 9,835 33,579 40,357 9,203
2015 8,723 31,475 39,213 8,196
2014 8,003 29,799 37,988 7,349
2013 7,056 27,947 37,191 6,818
2012 5,364 27,089 35,247 6,503
Talent Spotlight: The University of Toronto
The University of Toronto is truly a global institution. It is home to 88,000 students, making it the single largest campus university in the U.S. or Canada. The University is ranked 10th in the world for Computer Science, and is among the top five public institutions in North America.
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The Vector Institute
Under the leadership of Chief Scientific Advisor Geoffrey Hinton, the Vector Institute is a non- profit institute devoted to Artificial Intelligence. Affiliated with the University of Toronto, the Institute expects to grow to 400 researchers, faculty, students and engineers, and will support the research and commercialization of AI technologies.
The launch of the Vector Institute for Artificial Intelligence has put a spotlight on the outstanding quality of globally recognized AI talent that lives right here in the Toronto Region. The Ontario Government has committed to sustaining its leadership in AI by increasing the number of Master’s students graduating from the Vector Institute to 1,000 within five years. Major international companies are establishing R&D labs in the Toronto Region to take advantage of this deep pool of knowledge to develop new commercial applications.
Current partners of the institute include Google, Shopify, Thompson Reuters, NVIDIA, Uber, Air Canada, and ROSS Intelligence as well as Canada’s five largest banks.
Backed by more than $250 million in public and corporate funding, the Vector Institute has three objectives:
1. To become a world-leading center for AI research;
2. Graduate the most machine-learning PhDs and masters students in deep learning and machine learning globally; and
3. Become the engine for an AI super cluster that drives the economy of Toronto, Ontario and Canada.
“Canada has the potential to become a global leader in advancing AI research, development and commercialization, and all of Canada stands to benefit as a result. I’m a proud Canadian who grew up in [the Toronto Region] and graduated from the University of Waterloo. I am excited about returning home to help lead these efforts with the Vector Institute.”
— Dr. Garth Gibson, CEO, Vector Institute for Artificial Intelligence (Professor and Associate Dean of Computer Science, Carnegie Mellon 9 University)
TORONTO’S TECHNOLOGY ECOSYSTEM
Backed by Leading Accelerators, Research Institutions and World- Renowned Innovation Hubs
Financial Institutions in the Toronto Region are actively partnering with incubators and accelerators to better connect with fintech players and drive innovation.
TD LABS Working together to develop solutions for key customer
problems with digital and emerging technology
CIBC LIVE LABS Working with emerging talent in the technology field to help drive innovative new ideas
INSURTECH ACCELLERATOR Launched an accelerator program for Canadian startups that require rapid development
TECH STARTUP ACCELLERATOR Contributes to CDL’s programming fund and provides advisory
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Partner with Leading Research Institutions
In addition to the leading work taking place at the University of Toronto, industry-academic partnerships are a central focus across a number of academic programs in our 18 postsecondary institutions. From engineering to big data and privacy – students across the Toronto Region are entrenched in cutting edge research and development.
Rotman's FinHub Rotman's FinHub provides an environment in which students, the financial industry, startup entrepreneurs, and faculty interact to develop the expertise that enables ongoing innovation in the financial sector.
Privacy and Big Data Institute Led by Ryerson University, the Institute pursues and promotes research, innovation, and commercialization in the fields of privacy, security, and data analytics.
Master of Information Technology Security (MITS) The MITS program is the first of its kind in Canada and one of few specialized IT security graduate degree programs available in the world.
Partnerships and Government Support
Leverage government programs while building a talent pipeline by partnering with universities and colleges
Mitacs (50% Cost Matching) Solve your research challenges with academic expertise and leveraged funding by partnering with a post-doc or Ph.D. The government will fund 50% of the researcher’s costs
Ontario Business Research Institute Tax Credit (20% Tax Credit) Partner with an Ontario-based research institution and receive an additional 20% refundable tax credit for qualified expenditures on scientific research and development work
Co-operative Education Tax Credit (30% Tax Credit) Financial assistance is provided in the form of a 30% tax credit for companies who hire Ontario university and college students enrolled in a post-secondary program
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RECENT INVESTMENTS IN THE TORONTO REGION
Few places in the world offer such limitless opportunities to apply AI across multiple industries in a commercial setting as the Toronto Region. We are home to a global financial services centre, a world-leading medical and health systems research hub, and have among the largest tech, manufacturing, professional services, and creative industries in North America.
+ Samsung’s Toronto lab aims to strike strategic partnerships with the University of Toronto and the University of Waterloo. It will focus on the data intelligence, natural language understanding and computer vision to advance Samsung’s early work on AI, including its personal assistance platform. The Globe and Mail, 2018
+ Uber is betting big on Toronto’s strengths in AI, investing $200 million and increasing its total headcount to over 500. The investment will build on Uber’s Advanced Technologies Group led by the University of Toronto’s Raquel Urtasun, which is applying machine learning and computer vision toward autonomous driving research. Globe and Mail, 2018
+ NVIDIA announced plans to open an AI research facility to further explore novel approaches to deep learning. Its team will be led by deep learning and computer vision expert and University of Toronto assistant professor Sanja Fidler. NVIDIA, 2018
+ ETSY has chosen Toronto as the location for its newest Machine Learning Center of Excellence. Attracted by Toronto's deep pool of world-class machine learning talent, leading universities feeding a robust tech pipeline and vibrant maker culture, the city was a natural choice for the technology company’s third machine learning location. BlogTO.com, 2018
+ LG is establishing a five-year, multimillion-dollar research partnership with the University of Toronto to build a new AI campus. LG’s Global President and CTO praised Canada’s strengths in “fundamental” AI and the core development of theories. The Globe and Mail, 2018
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Case in Point: Cognizant Chooses the Toronto Region
Cognizant, a Fortune 500 company, is one of the world’s leading technology and business services companies. Headquartered in New Jersey, Cognizant works with major companies in industries from healthcare to banking and others to help them transform their business, operating and technology models for the digital era.
Starting in June 2017, Toronto Global worked closely with Cognizant to help them understand the Toronto Region’s advantages relative to other North American tech hubs, in terms of cost, talent availability, international market access and quality of life. Based on Cognizant’s needs, Mississauga was selected as the location for their new delivery centre.
The state-of-the-art facility, complete with training rooms, a digital lab, and a co-innovation space, will allow Cognizant to work alongside clients to build and deliver specialized technology and industry-specific solutions.
Cognizant’s new 50,000 square-foot technology and services delivery centre in Mississauga was initially planned to house 400 employees, however, the company was able to recruit high quality tech talent so quickly, it now expects to onboard another 200 employees by the end of 2018.
Cognizant was able to rapidly hire specialized Software Engineers, Developers, Network Engineers, Systems Engineers Infra Ops Specialists, Business Analysts, to name a few and expand their work on cutting edge design and innovative digital services.
Cognizant’s ability to rapidly scale its operations in the Toronto Region is a testament to the Region’s abundant tech talent supply and access. By setting up in Mississauga, Cognizant was able to access talent from all over the Greater Toronto Area.
Toronto Global was also instrumental in helping to build partnerships with regional stakeholders. This included Seneca College, who is now partnering with Cognizant to provide a new technology training program aimed at enhancing skills for current IT professionals, and building skills for students and other individuals interested in pursuing technology careers.
Cognizant’s investment in reskilling initiatives is intended to expand local businesses’ access to more qualified technology workers, as well as providing additional jobs and career opportunities for area residents.
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LOW COST BUSINESS ENVIRONMENT
Establishing a location in the Toronto Region means low overall business costs. From the initial capital investment to annual operating costs, businesses here are able to save more and invest hard-earned revenues back into what matters most.
+ Salaries for Toronto Region technology workers range from 20% to 40% percent less than comparable technology hubs in the United States, including New York and San Francisco
+ With Ontario’s Health Insurance Plan, employers save an average of 40% on employee health and benefit costs
+ Competitive corporate tax rates of 26.5% are lower than most international peers and lower than most American states
+ Tax credits for research and development activities can reduce the after-tax cost of every $100 in R&D spending between $37 and $61
Software Design Business Cost (Index)
Source: KPMG Competitive Alternatives
140 The Toronto Region ranks among the 20 lowest-cost cities in the world for software design 120
100
80
60
40
20
0
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Estimated Salaries
ROLE TORONTO ATLANTA NEW YORK SAN FRANCISCO
Director of Technology $105,661 $149,460 $198,105 $270,000
Big Data Engineer $103,589 $159,000 $210,750 $230,000
Data Scientist $87,015 $126,140 $167,195 $195,000
Software Engineer $95,302 $128,260 $170,005 $190,000
QA Engineer $64,225 $80,030 $106,078 $112,000
Network Security $91,158 $121,900 $161,575 $194,000 Engineer
Source: Robert Half Technology 2018 Salary Guide. All amounts are in USD. All salaries are based on the city average. Toronto Global used an exchange rate of US$1 = CDN$1.29.
Toronto’s tech scene is rapidly approaching that of San Francisco and New York. If you’re looking to staff a software development project, you’ll want to give it a look. There’s a lot of talent, opportunity, and innovation right across our northern border.
— James Chou, CTO at Workmarket, and former CTO of Shutterstock
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Employee Benefit Costs
With Canada’s Universal Health Care system, employers can reap significant cost savings versus U.S. employers. The Ontario Health Insurance Plan (OHIP) is universal and provides every Ontarian with basic medical coverage.
EMPLOYER BEST PRACTICES PAID BY EMPLOYER
Basic Medical Coverage 1.95% paid on employee
earnings. First $450,000 in OHIP coverage includes doctor’s appointments, hospital total remuneration is visits and stays, medical surgeries, basic prescriptions, and exempt. child delivery.
Added Health Benefits Average of $300 per employee per month. To remain competitive, employers commonly offer These costs are optional extended benefits, including massage, dental coverage, for the employer. chiropractic care, gym memberships, etc.
2-4 weeks Vacation (2 week minimum)
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Real Estate Costs
The Toronto Region spans over a distance of 7,000km2 (4,300 square miles) offering companies the opportunity to select from a wide variety of locations suited to corporate priorities and the lifestyles of employees.
REGION RENT
Downtown Toronto (core) $48/square foot
Downtown Toronto (fringe) $39/square foot
Midtown Toronto $38/square foot
Toronto Region West (including Mississauga, Oakville and Brampton) $26/square foot
Toronto Region East (including Markham and Richmond Hill) $26/square foot
Toronto Region North (including Vaughan) $29/square foot
Source: Colliers GTA Office Market, Q3 2018, All amounts are in USD. Toronto Global used an exchange rate of US$1 = CDN$1.29. Rates do not include additional rent/TMI.
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GENEROUS R&D INCENTIVES
+ More than $14 billion is spent annually on R&D in Ontario, home to almost half of Canada’s full-time R&D personnel
+ Four of the top ten corporate R&D spenders in Canada are headquartered in the Toronto Region: Magna, IBM Canada, Rogers Communication, and Constellation Software
+ Combined federal and provincial R&D tax credits can reduce the after-tax cost of every $100 in R&D spending between $37 and $61
+ More costs qualify for R&D incentives here than in many other locations in the United States – including wages, materials, overhead and contract expenses
Ontario's Cost Advantage Versus Other G7 Countries Source: KPMG, 2016
30% lower cost higher cost
25%
20%
15%
10%
5%
0% Ontario France Italy Germany Japan United U.S. Kingdom baseline
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WE SPEAK YOUR LANGUAGE
The Toronto Region offers one of the most diverse populations in the world. Nearly half of the region’s 6.4 million residents are foreign-born – a higher percentage than most global cities, including New York. On a national scale, the Toronto Region is home to nearly 40% of all foreign-born people in Canada.
Access International Talent
Canada’s view on immigration is aligned with globalization and economic sustainability. With supportive policy to welcome students and skilled workers from around the world, companies in Canada have the ability to access talent that is multicultural, multilingual and globally active. The Global Skills Strategy can offer qualified companies:
A two-week processing time for work permit applications
Work permit exemptions for highly-skilled workers on short-term work assignments and for researchers involved in a short-duration research project in Canada
A dedicated service channel, providing a single point of contact for companies to work with throughout the process
Percentage of the Population that is Foreign-Born, 2016 Source: Statistics Canada (2016 Census), U.S. Census Bureau (2016)
50% With 43% of residents born outside of Canada, Toronto Region is among 40% the most multicultural in the world
30%
20%
10%
0%
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ADDITIONAL INFORMATION
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ADDITIONAL GOVERNMENT SUPPORT & INCENTIVES
The following list includes incentive programs that may be applicable for companies operating with an R&D focus. Toronto Global can assist in further filtering appropriate programs based on specific activities and scale of operations.
Investment and Operational Incentives
PROGRAM ELIGIBILITY BENEFIT
Stackable R&D Tax Must be a Canadian incorporated Can reduce the after-tax Incentive company cost of every $100 in R&D
spending between $37 and Federal + Provincial Supports qualifying expenditures related $61 Government to R&D activity
Development and commercialization of Industrial Research Financial support innovative, technology-driven new or Assistance Program determined by Industrial improved products, services, or (IRAP) Technology Advisors processes in Canada.
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Hiring and Training Incentives
PROGRAM ELIGIBILITY BENEFIT
Research collaboration with skilled graduate and Mitacs Funding begins at $15,000 post-graduate students at Canadian universities.
This program supports the cost of employee training. Employers must contribute one-third of the total Up to $10,000 in government Canada-Ontario costs. There will be additional flexibility for small support per person for Job Grant businesses to provide an in-kind contribution training costs. towards their share of the costs. Training is to be delivered by an eligible, third- party trainer.
Industrial Employees between (15-30 years of age) Research Must work on technical opportunities within the Assistance firm and on non-technical but technology-related Cost-share the salary of a Program (IRAP) projects such as R&D, Engineering, youth candidate - Youth development of new products and processes, (3-6 month internship) Employment market analysis for a new technology-based Program (and product and/or business development related to Youth-Green) science and technology activities.
Financial assistance for companies to hire Co-operative Ontario University and college students enrolled 25% to 30% refundable up to Education Tax in a post-secondary co-operative education $3,000 Credit program.
Claim 25% of eligible Have a permanent establishment in Ontario expenditures, 30% for small Apprenticeship businesses, during the first Pay Ontario income tax Training Tax 36 months of an Credit Incur eligible expenses in training apprentices in apprenticeship program. certain skilled trades Maximum of $5,000/year for $15,000 over 36-months.
Employs apprentices who complete their training in any of Ontario’s approved trades Apprenticeship Taxable cash grant of $1,000 Completion for each apprentice Employer Bonus Corporation or unincorporated businesses subject to Ontario corporate income tax or Ontario personal income tax
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Daniel Hengeveld Ellen Mitchell 647.729.0733 647.638.3760 [email protected] [email protected]
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