Toronto doesn’t want to be Silicon Valley. It’s building something better

It’s a sunny Thursday afternoon in Toronto, and a group of international tourists and new immigrants are staring at me through the glass doors of the reception area of the mayor’s office. I try to ignore them as I prepare for my meeting with the city’s top official when one opens the door and asks me, in broken English, if she can go in and see the mayor.

Midway through my poor attempt at explaining how I don’t have the power to grant her such permission, Mayor John Tory opens the door behind me, prompting cheers and camera flashes from the crowd. “I’m sorry I’m running late,” he says to me, “but I’ll need another minute.” Then he heads toward the group gathered in the hallway.

It’s Newcomer Day in Toronto, an annual celebration that invites those seeking to or in the process of making Canada their home to experience the country’s cuisine, music, and culture, while offering a range of resources to ease their transition into the city.

“Thousands of people will come out, have a bit of fun, have a bite to eat, but mostly will feel supported and be supported,” Tory tells me a few minutes later, as we watch the crowds gather in the square outside City Hall from his office window overlooking the festivities. “We want them to understand that for us it’s a big deal they came here and chose Toronto.”

From Nebraska to New York City, Dallas to Chicago, Boston to Seattle, it seems like every city in North America is trying to be the next Silicon Valley. In recent years, just about every cluster with some modest venture capital activity, a few offices with big tech names on the front, an incubator or two, and a college campus has claimed the “Silicon-something” moniker. But what’s happening in Toronto feels unique.

The city is North America’s fourth largest and fastest growing market for tech workers, currently employing roughly 214,000, according to a report by the Bank of Montreal. Since 2017 Toronto has added more technology jobs than the Bay Area; Washington, D.C.; New York City; and Seattle combined, according to a study by the CBRE group. Recent months have also seen major investments by Uber, Microsoft, Samsung, Intel, and Shopify into the city’s technology ecosystem, which saw more than $1.4 billion in international investment in the month of September alone.

The best and the brightest

If you happen to ask Mayor Tory what the city’s secret is on Newcomer Day, all he’ll have to do is point out the window. Roughly 51% of Torontonians were born outside of Canada, and recent federal programs have made the immigration process even easier for those with technical skills or an interest in starting a business. Canada’s new Entrepreneur Start-Up Visa Program helps foreign entrepreneurs settle in Canada, while the Global Skills Strategy allows employers to bring international talent to the country within two weeks of submitting an application.

“If you want to get really granular about why we’ve been able to grow so quickly, it’s because we have government policies that have been responsive to what people told us in the tech sector, which is that ‘we need to move the best and the brightest from India or Hong Kong or Brazil, and get them here on short notice to help build our business,’” explains Tory. “We put in place a system that is able to bring people here in a number of days—not months and years—just at a time when other countries are going in the opposite direction.”

But a welcoming spirit alone will only get you so far, and Tory points to the city’s proximity to the United States, comparatively low housing, office and talent costs, its strong financial, entertainment and biomedical sectors, its post-secondary student population of about 400,000, its relatively affordable education system, and its scale as the continent’s fourth largest city as significant contributing factors.

“I think Toronto is straight up the best place to start or build a tech company right now,” says Tobias Lütke, the CEO of Shopify. The Ottawa-based e-commerce platform recently announced plans to invest $500 million into doubling its employee count in the city by 2022. “The world is still having conversations about whether multiculturalism is good or not, and you know what, we ran that experiment up here, we started this in the ’60s, and it turns out it’s really good,” adds Lütke.

When Collision, North America’s fastest-growing technology conference, decided to move from New Orleans to Toronto this year, the switch was met with scepticism, particularly from its Valley-based attendees. “Some people didn’t react well to the decision,” says the event’s founder, Paddy Cosgrave, during the inaugural Toronto iteration of Collision in late May.

One of the key factors in that decision, according to Cosgrave, was the city’s open and diverse culture, citing concerns about travel bans and visa issues as barriers to hosting the international event in the United States. “Even whilst there might not be travel bans in place, I think sentiment counts for an awful lot,” he explains.

Like many of the startup founders that share their stories at his events, Cosgrave says Toronto is the overnight success that took decades to build. He explains that Silicon Valley only became the capital of the tech world through investments by the federal government in programs like DARPA and the National Science Foundation, as well as through military contracts.

“That started in the 1940s, and everyone started wanting to be the next Silicon Valley in the 2000s, or the 2010s, but the foundation is built on vast levels of investment into highly speculative research areas,” he says. “In the case of Toronto and Canada, there has been a huge focus on directing a lot of money into very high potential areas.”

Cosgrave points to the Canadian government’s investments in AI research, dating back to the 1980s, as an example. He also points out that many of the industry’s biggest companies were founded by immigrants who flocked to the Valley.

“Silicon Valley was a magnet for people with great ideas and great skills from around the world,” he says, explaining that many are now choosing to take their talents north.

“Toronto is the most cosmopolitan city in the world, it’s like a shining beacon of openness in relative terms,” he adds. “There’s been a lot going on here for a long time. Collision is just riding a wave, not creating one.”