Tech industry boosts Canadian economy in 2016
Employment within the technology industry in Canada has reached an all-time high, employing over 503,000 people nationwide. The technology sector has outpaced the growth seen in finance and insurance, as well as real estate and leasing, increasing at an impressive rate of 20.3 percent since 2005.
Kitchener-Cambridge-Waterloo at the Forefront
In Kitchener-Cambridge-Waterloo, technology firms are responsible for 5.9 percent of the area’s total employment –the highest in the country. Toronto comes in second place with 4.6 percent while Vancouver and Montreal are tied at 4.5 percent. All markets have a strong variation of well-established U.S. based and global technology firms, as well as smaller start-up companies. Kitchener-Cambridge-Waterloo in particular has an impressive mix of homegrown technology companies, including Blackberry, Open Text and D2L, in addition to the global tech giants, such as Google, Intel, SAP and Electronic Arts.
“It has been 15 years since we have seen this much activity within the technology industry” says Brett Miller, President, JLL Canada. “Our dependence on technology has accelerated its growth at an unprecedented pace, and most industries are profiting. Should this trend persist, the second half of 2016 is looking to break the $20B level in investments, which will significantly impact the overall economy.”
2016 Another Record High for Venture Capital Investments
Technology investments saw an increase of 58.5 percent in the first half of 2016 compared to the same period last year, with a total of $1.05B in investments, spread over 168 transactions. With the exception of Calgary and Ottawa, funding continues to increase in the majority of technology markets. This indicates a healthy appetite for technology start-up companies in Canada, and the sector’s overall revenue potential.
Real Estate a Winner as Technology Booms
The rise of employment within the technology sector has propelled real estate leasing. In Toronto, technology firms were responsible for 14.0 percent of leasing activity on spaces of 20,000 square feet or greater, exceeded only by government and financial services. In the first half of the year, technology companies generated 15.8 percent of total leasing activities for spaces of 20,000 square feet or greater in Canada.
“We continue to see tremendous demand in the Vancouver tech market from US companies looking to take advantage of our exceptional talent pool, value of the Canadian dollar and proximity to the robust tech sectors on the west coast of the United States” says Gavin Reynolds, Executive Vice President, JLL Canada. “The concern here however is the falling vacancy rate in Vancouver. No new construction projects are scheduled until the next build cycle, which is projected to be in 2020-21. This could pose a challenge for the sector’s growth if companies do not have office space to lease and grow their business.”