53. The tech industry requires a ton of highly skilled immigrant labour, and Canada's immigration system is much friendlier to skilled immigrants than the American one.
If you're highly skilled and thinking about moving to Canada, check out Express Entry: canada.ca/en/immigration
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54. Even apart from immigration, Canada has tons of tech talent. Silicon Valley is filled with Canadian-educated engineers: if you look closely you can spot many of them by their Iron Rings: en.wikipedia.org/wiki/Iron_Ring.
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Something like 40% of the graduating CS class at the University of Waterloo ends up working in the United States. I'm told that a super high status thing for Waterloo CS students is getting a co-op/internship at every one of the FAANGs.
Canada has loads of technical talent!
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54. Canada is a smaller market, but it's probably the single best foreign country from which to launch in the American market.
We share a language, time zones, and culture. Canadians don't struggle to do business in the US.
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55. Nonetheless, the Canadian tech industry feels really undeveloped compared to the American one.
At any point in the past ten years, Canada has had at most one large, globally large tech company. Today, that's Shopify. When I was growing up, it was RIM/Blackberry.
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Back during the dot-com boom, Nortel was literally 1/3 of the total value of the Toronto Stock Exchange, until it spectacularly imploded. If I remember correctly it limped along on government subsidies for a few years before declaring bankruptcy.
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56. Canada has a lot of the ingredients of a dynamic tech industry, but not a lot to show. Why?
Tobi Lütke cites Canadian modesty: tobi.lutke.com/blogs/news/the
blames risk-averse angels: alexdanco.com/2021/01/11/why
People on HN think they know: news.ycombinator.com/item?id=6077025
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I certainly feel like there are some compelling points, but nothing that feels complete to me.
If you have ideas, I'm eager to hear them!
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57. This isn't just a tech industry phenomenon, either. We see the same pattern in biotech, summarized in The Globe and Mail (~the Canadian NY Times):
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This isn't to say that there aren't shining stars. Notably, Vancouver-based Acuitas developed the lipids used to encapsulate the Pfizer/BioNTech COVID vaccine!
And yet... the entire Canadian biotech sector is worth something like $30 billion. What's going on?
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58. One interesting story that might shed some light on differences between Canadian and American tech sectors is the cancellation of the Avro Arrow.
Here's a BBC piece, but I'll summarize the highlights:
Replying to
The Arrow gets covered ad nauseam in Canadian history, so, for the Americans: the Avro Arrow was a Canadian designed and built interceptor jet developed in the late 1950s. It was arguably the most advanced jet in the world at the time, and was supposed to be sold to NATO allies.
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The project was cancelled for not-entirely-clear reasons in 1959, devastating the Canadian aerospace industry.
The story still has remarkable resonance today. When someone found some plans that had been squirreled away, it was national news:
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59. I think this actually points to a natural weakness of the Canadian aerospace industry: aerospace is so nationalized and intertwined with defense that small countries struggle to compete in global markets. Canada will never be able to keep up with the US in defense spending.
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Young Canadian engineers warn each other not to study aerospace engineering, because most of the jobs are in the US and require security clearance that Canadians struggle to get.
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60. Another lesson to draw from the Arrow is: be way concentrating power over important industries in the hands of a small country's government.
Unfortunately this goes against most Canadians' instinct. We natural ask "how can the government help?".
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Replying to @cperciva
Unfortunately Canadian governments think that the best way to help startups is by setting up "innovation centers" and handing out subsidies.
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In the case of developing a tech sector, I suspect that the answer is probably "set up the right conditions and then stay out of the way." That's a tough pill for many Canadians to swallow, though.
At least some entrepreneurs in Canada agree:
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Replying to @cperciva
I don't want subsidies. I'm too busy building a business to apply for them. I want the government to stop giving my competitors subsidies.
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62. To summarize this chain of thought with statistics, Canada has considerably lower labour productivity than the US (2015 numbers: $49/hour worked in Canada vs. $63/hour worked in the US). A lot of this comes down to the lack of high-tech sectors.
Cite: conferenceboard.ca/hcp/provincial
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[That took a lot longer to put together than I thought, especially with all the graphs and stats. Gonna tweet some quick, breezy stuff about how all of this affects life in Canada and then pick this up again tomorrow! Happy !]
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61. So, what do these cultural/economic differences actually mean about life in Canada?
In broad strokes, Canadians are mostly poorer than Americans of similar socioeconomic status, except in areas where Americans deprive themselves of wealth in service of political signaling.
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62. In terms of material wealth, Canadians have (on average) lower incomes and lower purchasing power parity (something like 80 cents on the dollar, in exchange rate neutral terms).
Canadians can't afford to buy as much stuff because everything is just much more expensive.
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63. An example that Canadians will recognize is books. Most paperbacks with prices printed on the back list much higher Canadian prices, even adjusting for the CAD/USD exchange rate.
Last I checked, there wasn't a satisfying answer about why this even is:
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64. Canadians are mostly in denial about the degree to which they are poorer, in material terms, than Americans.
There's honestly a lot of cope about this and not a lot of serious analysis. No one wants to admit there's a problem!
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65. If you talk to people or look at discussions online, you'll see Canadians who are really eager to justify the higher prices north of the border.
It's the exchange rate!
It's our small population!
It's because we're a frozen tundra wasteland!
All transparently false.
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66. A common retreat tactic is to cite a "lower cost of living". This is fundamentally confused, since PPPP already adjusts for that.
I think a lot of Canadians don't grok how cheap most goods and services are in the US. There's a lot of this going on:
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When someone points this out, people will then fall back on "quality of life" but, when pressed, they'll usually cite things that are actually better in the U.S., indicating that they not only have no idea what U.S. tech is like, they simply have no idea what the U.S. is like.
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67. Another factor here is that upper-middle class people usually pay considerably more in taxes in Canada than in the US.
This is hard to see by looking at tax brackets: the top marginal tax rate in the US (37%) is actually higher than the top marginal tax rate in Canada! (33%)
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68. There are some differences in how the brackets are constructed, but the primary difference is that the US had a broad range of tax deductions laser-targeted at people making, say, more than $200k but less than $1 million/year.
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The US has deductions like SALT (a current political football as a de facto subsidy to high tax blue states), the mortgage interest deduction (recently reduced to cover "only" the first $750k in mortgage debt), etc. etc.
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Canadian tax deductions are much less generous, and are also usually calculated as "non-refundable tax credits", unlike American deductions.
In the US, deductions are worth *more* if you make more. In Canada, they are always calculated against a fixed tax bracket, and so aren't.
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69. Why did I keep qualifying my claim with "in material terms"?
As far as I can tell, Canadians are actually richer than Americans in a few keys ways. They are unified by the fact that they are aspects of life that the US has completely screwed up.
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70. The big one is housing, but in a subtle way. Measure like housing price-to-income ratio are actually often *worse* in Canada than in the US (e.g., 10:1 in Toronto vs. 7.5:1 in San Francisco).
Urban Canadians spend also about as much as urban Americans on housing.
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71. From what I can see, the biggest difference is that Canadian housing tends to be much higher quality than similarly-accessible housing in (coastal metros in) the US.
Most of this is because Canadian housing is usually much more recently built.
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72. A typical young professional in Boston or SF lives in a somewhat-renovated multi-family building built between 1890 and 1930. The same professional in Toronto probably lives in CityPlace: en.wikipedia.org/wiki/CityPlace
Is CityPlace especially inspiring? No. But...
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A cookie cutter CityPlace condo probably has elevator access, in-unit laundry, and heat pump air conditioning, none of which are common in the old multi-family housing that dominate American cites.
These things don't show up in housing prices, but still matter.
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[That's all for today. I should be able to finish this giant thread up tomorrow. 😄]
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[My past few days were unexpectedly busy re-arranging travel plans around Omicron. Topically, a primary concern was making sure that I don't get caught in a potential border closure! Should have time to finish this up soon. 🤞]
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[Whew, long delay due to, uh, world events. Let's see if I can wrap this up in 2021!]
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73. One the starkest difference in Canadian vs. American housing is insulation.
When I lived in LA I thought that bad insulation was a California thing, but the Boston area is full of $1 million+ homes that are... completely uninsulated?!?
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I'm not sure if this is because of different building standards, older housing stock, or... tradition?
My previous apartment (build in 2007 or so) had drafty double-hung windows, whereas most Toronto housing built after ~1970 is 100% casement windows.
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In Massachusetts, it's not uncommon to put giant pieces of cling wrap over windows to provide some additional insulation/draft protection.
I suppose that this probably exists in Canada, but I've never encountered it there, presumably because most people have much better windows.
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74. Both Canada and the United States are highly suburban but the standard style of suburban development is pretty different.
In particular, even remote Canadian suburbs tend to be denser than American ones.
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This picture reminds me of why new Canadian suburbs are so great. Very high lot coverage, real grids so they can be served by transit, and ADUs are generally legal so in the long run they’re all duplexes. I like the customizations/additions too twitter.com/globeandmail/s…
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