A high concentration of talent helped keep Ottawa firmly entrenched in the No. 2 spot in CBRE’s annual rankings of Canadian tech centres released Tuesday – the fourth year in a row the capital has finished second to Toronto in the survey.
The real estate firm ranked 20 cities across the country based on 13 key metrics, including availability of talent, quality of labour and affordability of office space. Vancouver, Waterloo and Montreal rounded out the top five cities based on 2019 data from various sources, including Statistics Canada, the Conference Board of Canada, the Canada Mortgage and Housing Corp., provincial agencies and the firm’s own research.
Under CBRE’s scoring system, concentration of tech talent and labour costs carry more weight than factors such as office rental rates. Ottawa topped the first category, with 11.3 per cent of workers in the capital employed in the tech sector – more than double the national average of 5.6 per cent.
CBRE says cities with higher ratios of tech workers tend to see more growth opportunities over the long haul.
“A high density of tech firms oftentimes leads to a network effect, where an established high-tech industry provides greater institutional knowledge for others to draw upon,” the report says.
“The formation of clusters also acts as an employment multiplier by attracting highly skilled workers that are drawn by a diversity of opportunities and exposure to various disciplines and potential careers. These tech clusters also provide companies access to tech-experienced middle and upper-level management, which can help startups accelerate their development.”
Second-highest average wage
But the study also found that Ottawa’s workers earn the second-highest average tech wage in Canada at more than $91,000, offsetting the city’s relatively affordable office rents and making it less cost-competitive than many other centres.
A typical 500-person tech firm could expect to pay an average of $43.9 million in annual operating costs, CBRE says, second only to Calgary among major Canadian cities. At the same time, however, higher wages help Ottawa in cost-of-living comparisons against cities where housing prices are more expensive, such as Toronto and Vancouver.
(According to the report, CBRE’s definition of tech talent includes software developers, programmers, computer support workers, IT systems managers and “engineering-related” tech jobs.)
Ottawa made the dean’s list when it comes to the calibre of its workers, notching an A in the “quality of labour” category – although its closest competitors, Toronto, Vancouver and Waterloo, all beat it with marks of A-plus. The capital’s tech talent growth rate also lags far behind those centres at a paltry 1.5 per cent from 2014-19, well back of Toronto at 36.5 per cent, Vancouver at 47.9 per cent and Waterloo’s eye-popping 51.4 per cent increase.
Highly educated workforce
The computer support and information systems managers segment was the fastest-growing local job category in that time period, while the number of software developers and programmers in Ottawa actually fell by more than 17 per cent.
Not surprisingly given its prevalence of talent, the capital also fares well when it comes to the level of education among its tech workers.
Nearly 42 per cent of employees in the sector have attained at least a bachelor’s degree, CBRE reports. That’s the second-highest ratio in the country behind Toronto.
The real estate firm says the tech industry has weathered pandemic better than most sectors of the Canadian economy.
“Early on, e-commerce and social platforms experienced a boom as shelter-in-place measures went into effect, forcing everyone to rely on the tech around them to work and live,” the report notes.
“Success also extended to more specialized players in the realms of cybersecurity, IT infrastructure, gaming, and work-from-home enablers, all of which saw an uptick in demand. Further, nearly all major tech stocks saw earnings increase year-over-year as of Q3 2020.”