Pilot program for newcomers launching companies in Canada to be made permanent
Canadians are welcoming to people and ideas from around the globe. Welcoming entrepreneurs who have the expertise to turn their ideas into successful companies is one way that Canada’s openness can help build a world-class innovation economy.
The Start-up Visa Program, a pathway to permanent residence for cutting-edge entrepreneurs launching a start-up company in Canada, will become a regular feature of Canada’s immigration landscape in 2018.
As part of the five-year pilot, launched in 2013, innovative entrepreneurs can apply to become permanent residents after a Canadian venture capital fund or angel investor group has made a significant financial commitment in their business idea, or after a business incubator has accepted them into their program.
A recent evaluation of the Start-up Visa Program found that it is delivering on its goals; immigrant entrepreneurs are actively developing innovative companies in Canada that are beginning to show positive results for Canada’s economy and creating middle-class jobs across a range of industries.
Making the program permanent supports the Government of Canada’s Innovation and Skills Plan, which seeks to attract investment and support the growth of a diverse range of companies, creating well-paying jobs for Canadians.
In the months ahead, IRCC will work to finalize regulations for the permanent program in order to have a seamless transition when the pilot expires on March 31, 2018.
“Every company launched in Canada with the help of the Start-up Visa Program has the potential to be a big win for Canadians by providing middle-class jobs and strengthening our economy. Our Government’s Innovation and Skills Plan has identified the nurturing of entrepreneurship and the growth of start-ups as vitally important to Canada’s present and future economy. Making the Start-up Visa Program permanent supports that agenda.”
– The Honourable Ahmed Hussen, Minister of Immigration, Refugees and Citizenship
“Canadians benefit through the jobs that are created when entrepreneurs come from all corners of the globe to start businesses in this country. By making the Start-up Visa Program permanent, Canada will attract more innovative entrepreneurs who generate new business opportunities, create jobs and equip Canadians with the skills they need for the jobs of the future.”
– The Honourable Navdeep Bains, Minister of Innovation, Science and Economic Development Canada
- As of July 15, 2017, 117 principal applicants have been approved for permanent residence. These entrepreneurs represent 68 start-ups launched in Canada with the help of the Start-up Visa Program.
- More than 50 Canadian venture capital funds, angel investor groups and business incubators are now designated to participate in the program.
- During the first three years of the pilot program, Start-up Visa Program entrepreneurs received over $3.7 million in investment capital from designated entities to get their companies established and making contributions to the growth and innovation of the Canadian economy.
Toronto led the pack of North American cities in The Economist’s 2017 Safe Cities index, which evaluates and ranks 60 global cities across four categories of security: digital, health, infrastructure and personal. While the Safe Cities Index measures relative rather than absolute safety, there does not appear to have been a vast improvement in overall levels of safety since the 2015 report. However, Toronto’s ranking jumped from 8th in 2015 to 4th in 2017, highlighting how the Canadian city has provided some stability in a rapidly changing world.
The report also touched upon how developments in smart city and green technology help cities address infrastructure safety concerns such as climate change and natural disasters. For example, a simulation study in Toronto predicted that if half the city’s roof surfaces were green, irrigated roofs, it would reduce temperatures across the entire city by 1-2 degrees Celsius.
I’ve spent more and more time in Toronto over the past few years and learned there’s more to this city than Drake calling it home and the recent successes of their professional sports teams. We made one investment there in 2015 and the experience — with the company specifically and the city generally — has been overwhelmingly positive.
It’s been so positive, in fact, that we’re actively looking for more high-caliber Toronto founders to fund. The city has all the markings of a world-class hub for technology startups and reminds me a lot of how New York City felt in the early 2000s when I moved back from the Bay Area — simmering with entrepreneurial talent, opportunity and a strong foundation to support it. I think Toronto is poised to contend as one of the biggest North American hubs for technology startup activity over the next five-10 years.
On a recent visit, a native Toronto entrepreneur explained why she thought I may be picking up on these undertones: “Toronto always had the talent, but it was historically recruited away. Today, the city is recapturing more of those people who left to work in the Valley or elsewhere, and they’re coming back to build businesses back home.”
Here are few reasons why Toronto is well positioned to make this transition.
Creative engineering-focused talent pool in a Top 5 North American city
Most people don’t realize Toronto is the fourth-largest city in North America (only New York, Los Angeles and Chicago are larger) and produces the most engineering-focused university graduates each year. There are 150,000 full-time students enrolled in universities throughout the Greater Toronto Area, all within 90 minutes of the city center.
Toronto is, in fact, the center of Canada.
Two schools — the University of Toronto (which has a world-class technology and engineering program) and Ryerson (a dedicated technical university) — are located in the heart of downtown and boast 80,000 students between them. There’s also nearby York University with another 65,000 students, Queens College with more than 16,000 students and, of course, the widely acclaimed University of Waterloo (which in many ways, launched the local movement), with a few thousand highly sought-after students 90 minutes west.
Supportive local government
Both the Canadian federal government and Ontario’s provincial government offer strong support, encouraging technology innovation in many ways. The two government bodies have set up several grants, matching contributions and financial assistance programs specifically designed to encourage and support technological development. Some of these include:
■ Scientific Research and Experimental Development (SRED): This federal tax incentive program was developed to encourage Canadian businesses of any size to conduct R&D that will result in new, improved or technologically advanced processes or products.
■ FedDev Ontario: FedDev Ontario delivers programming to help create, retain and grow businesses, cultivate partnerships and build strong communities. Financial support is available through 14 programs and initiatives. Some are delivered directly by FedDev Ontario, while others are delivered by organizations that have received funding through FedDev Ontario.
■ International Science and Technology Partnerships Program: Small and medium-sized businesses with R&D programs in science and tech can receive additional financial support to partner with foreign researchers.
■ Conservation Fund: This is a program designed to fund new energy conservation technology and programs for businesses.
This could be grouped under the “supportive local government” heading, but the Canadian universal healthcare system means that everyone is entitled to free healthcare benefits, lifting the financial burden for employers. Because everyone gets equal free healthcare, workers don’t feel pressured to settle for jobs solely to secure coveted benefits, but instead feel encouraged to take risks and follow an entrepreneurial path. Without the burden of paying for healthcare, startups can operate more leanly and reinvest those dollars into growing their businesses.
Attractive leverage/favorable currency exchange
With government support programs and universal healthcare, dollars invested in Toronto businesses provide the possibility of going much further. Taking into account the benefits described above and the typical benefit package afforded a Toronto startup, investment there has the opportunity to extend 1.2X-1.4X further versus investment in American companies.
What’s more, for the past three years, the U.S. dollar has enjoyed strength versus the Canadian dollar. The exchange rate (at the time of writing) is 1.30 CA to 1.00 U.S., a 30 percent change from where rates were as recently as 2012. For financings denominated in Canadian dollars — as they often are for seed-stage Canadian companies — U.S. investors enjoy a 30 percent advantage (for the time being).
The RIM diaspora
With RIM‘s (BlackBerry) continual transition from a large technology leader of approximately 10,000 employees to a significantly smaller outfit, many talented engineers and technologists in the Toronto area have begun to disperse and launch businesses of their own or team up with local entrepreneurs. As a result of “the RIM diaspora,” significant talent has been unleashed on the Greater Toronto ecosystem.
Strong startup foundation
Torontonians are a creative and entrepreneurial people. The culture of the city lends itself to the tech field, particularly with the backstop of the Canadian government behind them. Toronto is already home to a number of successful venture-backed businesses, such as Shopify, KIK, FreshBooks, 500px, Assurex Health, Influitive, Wattpad, SoapBox, Figure 1 and Vidyard.
There’s also a strong network of emerging local venture capital supporting the ecosystem, firms such as Golden Venture Partners, OMERS, Georgian Partners and Relay Ventures. Finally, there are more incubators and accelerators hatching every month, including Ryerson’s DMZ, MaRS, Highline, The Next 36 and Communitech.
There’s also a strong community developing with lots of weekly events; the TechTO Meetup is one of the largest, with more than 11,000 members, playing a role very similar to the one the NY Tech Meetup served for New York City five-10 years ago.
Vibrant and growing city center
Similar to the way some New Yorkers think we’re the center of the universe, Toronto is, in fact, the center of Canada. Not only is the city the center of commerce and industry in the country, but it has an exciting and diverse urban core that’s focused and invested on development and infrastructure. Toronto is the epicenter of Canada’s construction boom, claiming the most high-rise construction projects (and cranes) of any North American city with 130 projects underway.
Toronto is poised to contend as one of the biggest North American hubs for technology startup activity over the next five-10 years.
The city itself exudes creativity, especially the Queen West neighborhood, which serves as the de facto center of startup activity with its abundant restaurants, cafes and flexible creative workspaces (it reminds me a lot of the east village of New York in the 1990s). The neighborhood was recognized by Vogue as having the second-best street style in the world. The proximity of Queen West from the downtown core — a five-minute taxi ride or 20-minute walk — means startups have easy access to large corporations, enabling natural collaboration.
Friendly and entrepreneurial people
The international community has long regarded Canadians as being a kinder, friendlier and a more accepting culture; in my experience, it’s true. Softer and less aggressive both socially and in business, Canadians are pleasurable to work with, which is worth a lot in my book.
Toronto is also ranked one of the most multi-cultural cities in the world, with half the population being foreign-born. In addition to making for a diverse and interesting population, it sets a good precedent for the birth of startup businesses, because we know there’s a strong correlation between immigrants with the sense of adventure to relocate and entrepreneurial activity.
Alphabet, Google’s parent company, will be developing 3.3 million acres along the waterfront of Lake Ontario for its Sidewalk Labs initiative.
Canadian Prime Minister Justin Trudeau announced Tuesday in Toronto that Google’s parent company, Alphabet, will develop a portion of the waterfront along Lake Ontario. The development will house Sidewalk Labs, a unit of Alphabet focused on innovation in urban environments.
“This project offers unprecedented opportunities for Canadian innovators and will create thousands of good, middle class jobs,” Trudeau said during the announcement alongside Toronto Mayor John Tory and Alphabet Executive Chairman Eric Schmidt.
According to The Globe and Mail, Google’s Canadian headquarters will be relocating to the 12-acre site.
Schmidt said that “we are making a bold bet that innovation technology and forward-thinking urban design can make fundamental improvements in city life.”
St. Joseph Media has introduced what one of its senior executives believes is a possible antidote to the FOMO (fear of missing out) syndrome so common in the age of information overload.
The Toronto media company quietly launched a daily email newsletter called Twelve Thirty Six – also represented as 12:36 – about two months ago.
The digital product, which delivers what Toronto Life publisher Ken Hunt describes as an “interesting take” on the day’s events, is delivered to subscribers’ inboxes at 12:36 p.m. Monday to Friday.
Hunt describes Twelve Thirty Six as a “daily lunchtime tabloid” covering an eclectic mix of stories, all with a Toronto focus. “Hopefully it’s things readers haven’t heard 10 times already,” he said. “It’s not a general news update or the top headlines of the day – it’s an eclectic news product.”
Headlines in a recent edition included a story about the ongoing gentrification of The Galleria Mall in Toronto’s west end, and Toronto councillor Norm Kelly surpassing 100,000 followers on Twitter.
Twelve Thirty Six is overseen by Marc Weisblott, a former correspondent for now-defunct alternative paper Eye Weekly who has also written for Yahoo and Canada.com. Last year PR firm Hill+Knowlton named him one of the 10 voices to follow in Canadian media.