One of the worst things about tech in Canada is that the salaries are ridiculously low compared to the US. I made 2-3x as much by moving to California and then another integer coefficient greater than one when I moved to New York.
But really, I want to say this: as a Canadian, I find that image of poutine extremely offensive. What is that yellow stuff on top, Curry? Are those even proper cheese curds? They're not melted. Is that scallion?
How can this article be trusted when their choice of stock photo is so wrong I question if they've ever even had the dish?
As someone who keeps tabs on the poutine and labour markets back home, I can vouch for everything you said.
I don't even live in CA/NY (so my gross pay multiple isn't quite as high, but income net tax/cost of living is pretty great) and there's just no comparison. I probably make 60-80% more total comp in the USA than I would expect in a major Canadian city, and that's not even accounting for higher taxes (depending on state/province), frothy Canadian real estate valuations, and higher consumer prices almost across the board.
But Canada sure is a great place to live and I miss it dearly. I still hope to move back one day.
I made 2-3x as much by moving to California and then another integer coefficient greater than one when I moved to New York.
I don't understand this. If the "average" engineer in SV makes 120Kish, then the same engineer is making 40K in Canada? And they can make 240K in NY (with no additional experience)?
Are those number correct?
If they are: I'd note that salaries in Australia are more closely aligned with SV salaries than Canadian. Just in case anyone is looking to move somewhere...
This is a very good thing that I wish the US would adopt. We have people with three months total programming experience jumping from sales jobs to programming and calling themselves engineers. It's an insult to those who actually perform engineering professionally.
It might be a good thing if university graduates from computer science programs could apply for software engineering positions... Consequently, most educated hiring managers don't hire for engineers, which brings us back to square one.
No, it's not. In practice it is a way to give professional associations a monopoly and force people to pay fees to them (because it is membership of those associations which give you the ability to call yourself whatever, not what you completed at university)
Fortunately there are multiple job titles in computing that mean the same thing, so this should never be a real problem in computing.
Yes, yes it definitely is. While professional engineering certification might be a monopolistic moneymaking scheme, it also verifies that an engineer has some idea that he knows what the hell he's doing in a way that graduating from a university can't. Standardized tests have a real and valuable purpose. I'm more comfortable knowing that an engineer graduating from Western State has an independent source to test his knowledge against. Accreditation alone can't do this.
Except that you live better in Montreal than in SF with 1.5X less salary. I don't mind moving there but living in a shared room because rent are 2k5 a month for a small place...
How does one live frugally when rent is sometimes 60-70% of your income? Plus taxes in California are comparable to those in Quebec, but health care isn't covered.
Don't live in gentrified, high-rent neighborhoods in the city.
I rent in San Jose, have private health insurance, and am sole provider for a family of four. Our necessary expenses to maintain our standard of living for last year totaled around $40k. That year I had been offered (and turned down for unrelated reasons) a $115k job on the peninsula. Even assuming a worst-case tax situation, I still could have been saving $40k/year.
That's approximately the going rate in Quebec for the work I do.
If this were WA it'd be a substantial difference (somewhat). CA and NY though (particularly NYC) have a total tax rate in the same ballpark as Canada.
And the Canadians get health care for that money.
That said I've done the cost of living numbers between here (NYC) vs. Vancouver, Toronto, and Montreal, and even with the insane rent here I'm still coming out ahead - way ahead. The salary difference is truly mind-boggling.
More than the salary difference, the kind of work you're doing as a $200K engineer in SV/SF/NYC is very different than the kind of work you're doing as a $70K engineer in Toronto. There is a conspicuous lack of this level of work in Canada overall.
You need to include sales tax, which ranges from 5% in Alberta to 15% in Quebec. Also, taxes on alcohol and gasoline are much higher than the US.
That being said, with the recent tax increases in the US and the lower of provincial income taxes in many Canadian provinces (I'm looking at you BC), the difference isn't as great as one would think.
Not at all. Starting salary in Canada is $45-70k and I know at least four people who made north of $150k in total comp their first year out of school in SV. The interns in SV make more than some senior engineers in Canada.
It's especially worth noting that this is true even though these tax credits already exist. The benefit has largely gone to the companies that use them, not so much to their employees.
Of course, it can be argued that there would be fewer jobs for them without it, so that is not to say that there has been no benefit -- it's just kind of hard to quantify. But it has not helped make salaries in Canada more competitive.
2x of silicon valley and then bonus on top, but that required moving into finance. It also helped that my previous employer was Apple, it opened many doors when it came time to interview.
The fact of the matter is that other industries are starved for talent. If you can keep up in silicon valley, where all anyone talks about is technology, you will be godly in a different marketplace with more capital flow.
Firstly, it isn't clear exactly what you don't like about it. That it is Java? That it exists?
You need to put its existence into historical context. When it came out, it was before Google's Guava collections libraries were open source, so there were no decent collections libraries that did more than what the JDK libraries did.
That's the context GS Collections were built for.
(Disclaimer: I've never used them, but I do remember when they were released)
Do you mean they're self-satisfied enough to write themselves a framework, but too myopic to see that writing it is a massively misguided waste of time?
Maybe it's because I don't know Java, but the complete separation of interface for "ImmutableBagFactory" and an implementation "ImmutableBagFactoryImpl", and the fact you need a factory for an "ImmutableBag" in the first place... seems like very poor design. Even if it is common in Java (?).
Given that constructors can't conform to interfaces, if you want to be able to pass a constructor around you pretty much have to do this. I agree it's probably overkill, but if you wanted really strong compatibility guarantees I can see how this would make sense.
I went Canada -> Seattle -> SF -> NYC. Here's a datapoint:
- Seattle salaries were ~70% higher than what I would've gotten in Canada at the time (mostly looking at Toronto area market, though it's all fairly similar)
- SF salaries were ~30% higher than Seattle. I didn't know it at the time but that meant I took an effective pay cut. My total comp was about 1.8x what I would receive in Canada at the time.
- NYC salaries were another ~30% higher than SF (64% higher than Seattle). Cost of living here is lower than SF (weirdly enough), so I effectively got a large raise moving. I've been here for a while, and looking at the Canadian market now I'd reckon I'm about 2.2x higher than a similar position in Canada.
All of the above were done while staying in the same "field" - i.e., did not go into finance. And all of the above assumes I'd be fetching top-10th-percentile salaries for my position in Canada (itself far from a guarantee). If I do "just average" for compensation in Canada my NYC salary would be about 2.6x.
The one overarching trend is that the gap widens as you gain experience and seniority. Canadian salaries never catches up, and in fact continues to fall further and further behind as you go up the ladder.
I can vouch for the 2x from Canada->California, I'm making more than 2x what I did in Canada (Toronto) now. I don't know about the 3x or 4x, maybe sillysaurus was making like $30k in Canada before, or maybe he's just some kind of superstar that gets paid $250k/year.
Health care is generally included on top of salary in the US, so Canadian health care wouldn't be a consideration for engineers working at established companies.
Even significant health costs per month are ignored in a corporate environment in the US, though small startups may be different. For entrepreneurs, health care costs would matter before the company was large enough to have figured out benefits.
Any startup employees\founders willing to comment on how health insurance is generally handled at US startups?
You're probably right at the lower-end of the income spectrum, but any non-joke, non-freelance software development job in the US will include health insurance on top of the quoted salary at little or no cost to the employee.
I have a chronic health condition that needs some fairly expensive drugs and relatively frequent doctor visits and procedures. My total out of pocket healthcare expenses are less than $500 per year.
Except, before the ACA they could refuse to take you on because of "pre-existing conditions". I know several people who did not switch away from jobs they hated because they risked losing health care. And freelancers, even if they commanded high salaries, also had problems getting reasonable insurance.
I'm up-to-date as of 2011, I'm sure things have (and still are) radically changing - but the health insurance situation in the US was a horrible mess until recently - Everything worked fine until the day it didn't, and then you were possibly shut out of healthcare.
HIPAA in 1996 limited the ability of insurance plans to deny coverage based on pre-existing conditions. As long as you didn't have a gap of more than 63 days with no insurance coverage, they couldn't deny you coverage.
Silicon Valley companies tend to downgrade you in position for the simple reason of not being from there. That person would get a salary bump, but it'd be to another junior role around $100-120k. The money improves, but the job position degrades.
I found it obnoxious and annoying, and it's one of the reasons I'll probably never move to that cesspool. The idea that I should have 5 years knocked off my career because I came up in New York (which is a far better city than San Francisco, and far less expensive relative to opportunity and urban amenity) is one I just can't accept.
> I made 2-3x as much by moving to California and then another integer coefficient greater than one when I moved to New York.
I don't think this is much of a valid criticism, since most people in the States can also move to SV/NYC and make 2x or 3x their current salaries as well. Hell, those cities probably have the highest numbers (so ignoring CoL) than most places in the world.
I think it's a very valid criticism if your best people (not talking about "most" people, who don't start companies and create new stuff) can easily move to another country (or other state inside the US) and earn WAY more for the same job or skill set.
It's not a valid criticism if the gov. footing 80% allows these companies to now offer SV/NY competitive salaries. Which I suspect will happen if they do it right (both the governement and the entrepreneurs).
>I think it's a very valid criticism if your best people (not talking about "most" people, who don't start companies and create new stuff) can easily move to another country (or other state inside the US) and earn WAY more for the same job or skill set.
I think, what a lot Americans overlook, is that most people in the rest of developed world want more from life than a high salary. Moving from somewhere with the highest standards of living in the world, such as Toronto, to somewhere that doesn't even make the list of top 5/10 in North America alone such as NYC, might come with a salary increase but it's a significant trade off in terms of other factors.
Looks a lot of Canadians have overlooked it too - all but 2 people in my graduating cohort are writing code in the US.
You are welcome to delude yourself into thinking that "real" Canadians don't value a high salary, but in reality it's causing a massive brain out of the country.
Also, in order to be paid that much, you usually need to live there. It all depends on how you value certain things.
Ample parking, day or night: $2500/yr
People smiling; kindly neighbors: $5000/yr
Public schools that don't suck: $15000/yr
Parks/public spaces that you actually want to visit: $2500/yr
Low violent and property crime rates: $5000/yr
Political and cultural compatibility: $2500/yr
Good local television and radio stations: $1250/yr
Things like that add up, and are highly subjective. But when I see significantly higher salaries in very specific geographical regions, what I see is one of two things: either people there tend to be more valuable than others, or they are demanding compensation for all the crap they have to put up with and/or purchase that they can get for free or at reduced cost elsewhere.
For instance, in Chicago, I had to pay an extra $100 a month for a parking space behind my apartment. That's $1200 a year already. Never mind if you actually wanted to go anywhere in your car and park in the same ZIP code. That costs you additional time and walking distance or additional cash. And it certainly impacts your property and casualty insurance premiums.
Having grown up in a different city, where parking had never been an issue, that threw my own freedom of movement up in stark contrast, as something that had calculatable value to me, and which likely differed significantly from other people. The costs of having a car in Chicago were only partially mitigated by having CTA and Metra commuter service. Grocery shopping is a lot different when you can only buy what you are willing to carry in your arms for as long as it takes to get home. You buy a lot less of the things that are mostly air (additional volume) or mostly water (additional weight).
That was but one of the reasons that I found the local pay was not worth the local costs, and moved.
For a variety of reasons, the people deciding on the location of a business do not value those local costs in the same way, and do not realize that their employees may demand more in compensation because of them. Or they just don't care.
As for myself, I could probably get 1.5x my current pay in SV or 2x in NYC. But it would have to be 3-5x to be worth it. I currently rent a 3br 2.5ba house for about 12% of my gross pay, and can drive to work in 20 minutes. Is that even possible in SV or NYC on income less than $15 million a year?
You are correct and I never seen a poutine like this before but there is many variations that are good... I like a good "poutine italienne" for example:
I'm from Vancouver and have lived in Los Angeles for three years now.
There are 'hidden costs' to living in LA/California.
It just depends on what you prefer and where your priorities are.
I would love to move back to Vancouver, because when you consider gas (living close to work vs living in a suburban sprawl), property (yes, you get a bigger house here, but unsafe neighbourhoods are just around the corner, and bad air), quality of education (Canadian primary and secondary schools outperform American ones), then is it really worth the trade off?
For example, in LA, the concept of 'you get what you pay for' is truly taken seriously. You want the best? Get ready to pay thousands and thousands of dollars (more expensive than Canada, usually). If you just want mediocrity and barely get by, LA is super cheap, affordable, and you can raise 10 kids here, no problems.
EDIT: With regard to poutine, that looks like the fancy poutines you get in Santa Monica. Savages! All of them!
I'm a software dev in Waterloo and I can definitely see that. I've got absolutely no problem getting job offers, but they are low compared to what friends of mine who moved to the US are making.
I'm sure my cost of living is less. On the other hand, looking at the figures makes you feel a little undervalued.
Tell us where are you looking for job cos all the positions I've checked in Toronto where 80$ - $90k, plus stock options, etc... I'm talking about last week..
> Are those even proper cheese curds? They're not melted
You must be from outside Quebec. Fresh cheese curds, (they'll squeak as you chew them), won't melt in the gravy, only soften a bit. Melted cheese curds means that they've been sitting in a fridge for a few days or more.
I moved from YVR to SFO a couple years ago. Buying a house in either city is expensive. However, my rent doubled when I moved. If I had chosen to live in San Francisco itself my rent would have been even higher. Parts of Vancouver are more expensive than parts of San Francisco but if you compare similar neighborhoods Vancouver will almost always end up cheaper.
Transportation costs in the Bay Area are also much higher than the GVRD. Parking in San Francisco costs a fortune and public transit is a mess. You can get a three zone bus pass in Vancouver for far less than I spent each month on BART and the Caltrain. Because there's only one transit company that bus pass is good everywhere. In SFO you need passes for each service. BART doesn't do monthly passes and if you need to go to Oakland bring cash. Your clipper card isn't good there.
If I was looking at equal compensation there is no way I'd choose to live in SFO.
Don't underestimate how expensive Canada is. I recently moved from San Diego to Calgary and everything here is more expensive (groceries being the most extreme at 40-60% more) and unlike San Diego, Calgary doesn't have an ocean.
interesting site, plugged in Victoria Canada (city my company is in) and numbers seemed a little off for rent currently listed in craigslist. +170% on website more like +300% from quick look in craigslist.
also doesn't factor in time commuting, quality of life, avg hrs worked per day, etc... would love to see a pay breakdown $$ / hr worked (at office).
The data is crowd sourced so it may deviate, you can contribute your data to keep it aligned. Also the quality of life and commuting comparisons can be done from the pull down menu in the header.
interesting, would imagine that could deviate quite a bit then. for things like cost of coffee / meals i could see crowd sourcing but aggregating from an online source for rentals / housing sales would lead to much more accurate estimate as they are the bigger ticket items.
OT, but how is Victoria as a city to run a tech company in? I lived there nearly a decade ago and enjoyed my time - I still think about returning some day.
This has changed quite a bit. There are a strangely large number of companies (both startups and a-bit-older-than-startups) doing various large data analytics type things. Also plenty of adtech related startups.
One of the reasons I'm bearish about NYC's future as a tech hub is that, although Manhattan cost of living is extremely high, engineer salaries still seem to have the $150k ceiling, except in finance. Which means you'll have plenty of under-30 talent but few long-term, highly experienced engineers.
A lot of the talk is on SRED credits. SRED is a large part of the credit program for startups in Canada. Though it's not as simple as "Canada pays 80% of your salaries"
You can get up to (off the top of my head) 75% of salaries paid back on hours worked "advancing technology". That means it's only for true R&D. That means UI, business logic, API, App anything, expenses, costs, etc... don't count. It's only for when you embark on a project that truly advances the worlds state of technology where you can really reap the benefits of SRED.
Most startups, as sad as it may be, don't truly advance technology. A lot create value, yes, but advance technology? not really. Certainly not all year. So they'll only get 75% of salaries paid for the hours they worked on advancing technology.
You'll get that back at the end of the year as one lump sum. It's awesome. However, it goes to the company and the company has to have already funded the salaries -- it wont fund salaries, it will reimburse them.
On top of that the system is so hard to navigate that you'll end up requiring a consultant to navigate it. They'll take a cut, between 10-20%, of the return.
It's not as simple as the article states, and our poutine doesn't look like that.
As someone who has actually used the SR&ED program for many years, I have to say that you've got it a bit wrong...
SR&ED will cover a percentage of capital expenditures essential to the work and a percentage of $ paid to contractors so it's salary plus SOME eligible expenses. Salaries make up the biggest part though. I got about 65% back, using the proxy method - a simpler way of calculating SR&ED overhead on eligible salary expenses.
The R&D effort does not have to advance "the world's" state of technology, just your company's.
It can't be obvious or routine engineering BUT work that is required to complete the R&D work (but not directly R&D) IS eligible and you can claim it.
The 3 core requirements of SR&ED eligibility (for software anyway) are (1) there has to be technical uncertainty, (2) you must use a systematic approach and keep records a notes and (3) you must achieve a technological advancement.
The 3rd item catches people because it doesn't require a successful outcome. You can fail and still claim the project. If you knew in advance (or it was obvious to anyone in the field) that it would fail (or succeed) then there was no uncertainty and it would not qualify.
SR&ED is really not that difficult to navigate. Consultants can help, but they'll take a big chunk of your claim. Most of them work for a percentage that runs anywhere from 15% to 35%. That's big money for very little value. I wrote my own claims for many years and they were all successful.
When I started there was no limit on the write ups, now they put some severe character count limits on the writes ups. That makes them harder for us but less confusing for the reviewers. You really have to be able to distill things down to just the essentials.
Any Canadian software company that doesn't at least look at SR&ED is just throwing money out the window.
They've recently removed the ability to claim capital equipment. My experience, which is probably less than yours, is that the R&D requirement is real and omnipresent - anything that's spent on production or that will go into production can't be claimed. Furthermore I've been asked for lab notebooks and experiment designs to justify the materials I used that I claimed were for R&D purposes.
They used to have an "Account Executive" program where you could talk to a reviewer BEFORE you started work to explain what you were doing and get tips on what was eligible and what was not. I did that when I started and it was an eye opener!
The reviewer I spoke to was the one who handled all our claims, so it didn't hurt that he already knew about us. It made his job, and mine, a lot easier.
Wait... okay, found a link to the services they offer and Account Executive is still in there, plus a bunch of others...
If you're at all uncertain about what you can/should be claiming then you should definitely talk to a SR&ED professional or use one of these services to get definitive answers from the source.
In theory SRED is supposed to be for R&D. You'd be surprised what can count for R&D. Doing A/B testing to solve the problem of which UI is more preferred/efficient? That can count for SRED work.
What works in practice wouldn't be held up in an audit. Depending on the mood of your approving agent they can deny the whole application if you mention specific interface words.
You'd be better off creating and Irap project to cover UI and business logic items. IRAP is out of the same government fund but pays slightly less for a project as you go, not one lump at the end of the year.
IRAP and SRED are mutually exclusive but if you spend time thinking about it you'd be able to decide work to fit into both nicely.
I had to go through the whole SRED song and dance at my previous $work. The company writing up the proposal was really eager to get the numbers high, but the when the government agent came down to the office to go over the expenses the whole experience was so painful that the owners of company decide to pass on even applying for SRED in subsequent years.
Similarly at a small startup I worked at were surprised at how rough the auditors were with us. We certainly thought we were 100% in the clear and doing genuinely innovative work but they really pressed us on it. Getting SRED is not easy as some say.
This shouldn't dissuade anybody from trying. That's the whole point of business. Going out on a limb. Read the rules, follow them, and if it doesn't work out... at least you tried.
I agree. A key part not mentioned is that you have to fund the salaries before and it's only paid much later! As in after you close your fiscal you then have to submit and it takes about a year before you're paid. So in total you have to cover the salaries for two 2+ years before you're paid. You also have no guarantee you will be paid.
It's also only on developer costs that are accepted and only on R&D work: none of the business costs etc are covered. In many cases these are just as significant or more.
There's also a reason that a consulting industry has started around it, it's a good amount of effort. Again helping more advanced companies as they can afford the costs for the 2+ year it takes before you can get it back. And again nothing is guaranteed.
Essentially it's not good for startups or smaller companies, it really only benefits companies of a medium size that were alreday going to cover this expenses by reducing some of their costs to increase them growth rate. But for a small company, less than 10 employees it's really hard to actually take advantage of the program in real life.
Plug: the UK govt also has R&D tax credits, and it's what my company, GrantTree, specialises in.
They're similar to Canadian tax credits, but can give you up to 25-32% cash back, and are a fair bit more lenient on what passes audits (at least compared to the horror stories I've heard from Canada).
Feel free to get in touch with me to find out if/how you can get some of that in the UK.
Are UK salaries even worse than Canadian ones? I've looked at analytics related positions in the UK and was shocked at how bad the average pay seemed to be given what the cost of living was.
It seemed to be the same for software developers.
Given what patio11 says about salaries in Japan, that country also sounds absolutely terrible.
It's actually 80% of the salary for any work that has been done in R&D, but like you said, most of the work isn't.
A few years ago a lot of stuff could be considered as work "between two uncertainties", including non-engineering work such as graphic design, but the rules are much more strict nowadays. I think they still give credits for things that are way too simple to be R&D (ie: normal problem solving), but we've been doing [small] claims for the past 3 years and the rules have been tightened a lot.
Also, doing a claim requires you to provide evidences that you were following a certain R&D methodology. It's definitely worth it, but it's a pain.
Yeah, they immediately start parsing and backpedaling the headline: "the Canadian government is paying almost 80% of his <developers>' salaries.". Still disapointing they don't delve into the actual program structure though.
I'm currently a beneficiary of SRED in a startup context in Canada.
The first thing to note is that it doesn't solve many major problems. The lack of development talent is the biggest one; trying to get someone to move from California to Canada isn't something that's solved as simply as offering more money. And in my experience (as a recent graduate), the talent that would have studied computer science or has an interest in programming moves onto "safer" education and career options (in the local context) - usually engineering or commerce/finance.
There's simply a lack of talent, or more realistically, a lack of talent with no better options.
The money here is being used to attempt to make up for the extreme economies of scale that places like Silicon Valley have. It's not enough to make Canada a competitive place to start a startup, really, but it may have some effect on the total amount of expatriation by talented individuals.
> The lack of development talent is the biggest one; trying to get someone to move from California to Canada isn't something that's solved as simply as offering more money.
Actually it would take a lot less money than you would think to get many people to move to Canada and take a job offer. There's a whole world of immigrants out there who would love to move to Canada. They're mostly not located in California however, but east and south of Europe.
Though there is mention of the "startup visa" in the article, which applies to people from non-NAFTA countries as well. Though not sure how it works for hiring talent.
I, personally, would have preferred to stay in Canada but finding a job is a right pain in the ass. American companies will fly you in on their dime, while Canadian firms won't even give you a phone call. It would even help if these companies were even offering competitive wages.
There are also plenty of American firms that won't give you a phone call or offer competitive wages. Silicon Valley strip mined its own local talent pool long ago, so they have to do well at courting potential relocation candidates if they aren't able to poach from the other valley companies.
Finding a job anywhere else is still a right pain in the ass. Entering through the back door using your personal network is still the best way. Otherwise, the process of resume submission to phone screen to technical screen to in-person interview to negotitations to at-will employee is horrible, and no company does it well from end to end. Being dropped without any further contact can happen at any stage in the process. I was flown out to Denver for a half-day, multipart interview ordeal and after I returned, it was as though I no longer existed to them, which was odd, because I thought I did rather well at the interview, at least enough for someone there to return an e-mail or tell me that I was cut.
It isn't being American that excepts SV from the rule, but the supply and demand for technical specialists. In that context, perhaps the Canadian program might not raise your pay directly, but it might make it easier for you to get hired in Canada.
Speaking as someone nearing the end of their undergrad and looking for internships/full time opportunities, staying in Canada is simply not competitive or attractive enough for the talented students in each class.
Local companies are not "big of a name" enough for career advancement (aka resume padding) and do not pay nearly as well either for entry level positions (50k vs 70/80k - taxes).
Furthermore I have heard of local startups that relocate or migrate down to SV for some period of time to fund raise or experiment before pivoting/failing/moving permanently to the US or their talent leaves during their time there.
I think if you're in computing this is true. The tax credit "successes" in Canada are groups like the hundreds of artists on videogames or mechanical engineers in aerospace. Software development that way does exist, but it doesn't account for a very high proportion of jobs in these programs.
As an outsider in Canada I've been told it's easier to get foreigners to join startups due to how risk averse Canadians are, and what I've seen would tend to back that up.
Lack of talent or lack of US-comparable salaries? A lot of U of Waterloo people get snatched by American companies, I bet if we paid them about the same many would stay here.
UWaterloo grad in the US here - I'd go back in a heartbeat if the salaries were comparable and the market healthier (i.e., a substantial number of players paying US-comparable salaries, so you're not golden-handcuffed).
Can you please elaborate on your comment concerning the lack of talent in Canada? What's wrong with the large pool of CEGEP and university graduates or more experienced developers who are well able to pick up new technology?
What does U.S. talent have that's missing in Canada? Are the good ones really all moving away to where the money is? Or could it be that, despite all the available funding, Canadian entrepreneurs are less prone to risk training new recruits?
It is work, and about as arcane as you would expect a government form to be. You need to track your eligible hours for SRED on a weekly basis or throughout the week (as an employee). As an owner you need to deal with capital expenditures as well.
Both are viable. We use a contractor that takes a cut (~25% for < 25k claims, 20% for bigger claims IIRC), but I know of companies that do it themselves and hire a SRED specialist to review their application on an hourly contract.
Hiring is really hard, but from anecdotal experience and hearsay, I still think the number of Canadian tech workers leaving for the US is a depressingly major factor. A large number of my ambitious Canadian peers ended up moving to the US, and Canadians are really well-represented among US tech companies. Many end up moving back (or plan on moving back), but it's almost always for personal reasons at significant cost.
I consider myself to be an above-average software developer, but I found the hiring processes at many start-ups (Wave, Freshbooks, Tophat, etc) in Toronto would reject me to weird reasons. E.g.:
- I had never used the functools library in Python before, so because I couldn't answer trivia questions about it, my Python skills were low. (FYI: You can read the entire documentation on the functools library in ~3 minutes). And this was after an initial interview where I apparently got the trivia question that 'no one' gets (which I'll note was actually more relevant to general Python knowledge as it was about keyword args).
- I had 'amazing technical skill' but because I didn't have enough side-projects to prove that I "love the web" enough to work with them.
I eventually ended up in my current position of lead developer at an early-stage startup, but it frustrates me a bit when I hear about a lack of talent while at the same time feeling like my own experience is that startups are being very picky in their hiring practices (i.e. looking for any chink in the armor, no matter how small, and then flat-out rejecting someone because of it). If they were rejecting me for such those kinds of reasons, then either:
1. They had someone better than me that they decided to hire instead.
2. They really aren't that hard up to talent, and decided to wait for someone "better"[1] to come along.
[1] For various definitions of "better," as in this case it just means jumps through the hiring hoops correctly.
Looking at my own graduating class... it's not lack of talent, it's lack of opportunity. Many (most) graduates end up taking jobs south of the border within their first year post-graduation.
This article is light on facts (which is surprising to see in the wsj). This program is called Scientific Research and Experimental Development Tax Incentive Program. And, qualifying for a full SR&ED isn't as easy as they make it sound. To learn more, visit:
The trick to SRED is to hire an outside expert who will work on contingency to get a percentage of the SRED rebate they generate. There are many companies providing this service. These folks are experts on writing the necessary reports/forms given your engineers have written detailed logs of their work. Don't try to do SRED yourself. It's just one of those things, like hiring a lawyer, where it's complete lunacy to do it yourself.
SR&ED consultants are simply exploiting a knowledge gap for serious profits. If you can, you should find someone who can help you and give advice, but don't give away 10%+ of the return.
Or like myself, hire a firm once in your career, assist to the free government course and do it yourself in the future. The trick is really learning what they are looking for in the write up and scientific audit. The rest of the claim is easy. And once you're approved, you usually don't get audited thereafter.
The trick to SRED is to hire an outside expert who will work on contingency to get a percentage of the SRED rebate they generate.
This is the scam of SRED. It is unfortunate that we are at this place.
There is absolutely nothing difficult about SRED (it is absolutely no more difficult than any other completely banal corporate submission), beyond understanding the magic terminology and phrasing that will get your submission accepted as is. That a whole business of vampire consultants exist around exploiting that, with agreement from Revenue Canada, is the real lunacy. It undermines the efficacy of the program.
+ 100. I find it revolting and scammy that tech companies have to get outside "consultants" to help fill out the paperwork. I've heard stories where some consultants worked for the program itself in the past. How can Canada piss away so many tax dollars is beyond me.
I think this is an overreaction. Why? Let's be honest. If you're the stereotypical 150-IQ, borderline-Aspie tech co-founder, you're going to have to find a business co-founder with connections. He's going to take a huge cut, and you're going to do more work. That's just how the system's set up. Then you deal with venture capitalists, who can pretty much set terms unilaterally because of their inappropriate and collusive influence over what everyone else thinks of you and your company.
If I'm an entrepreneur in need of capital, I'd rather pay a 10% tribute to someone who knows the paperwork than the current 90+ percent tribute (to people who can make introductions, people with sales skill, makers of reputations) of Silicon Valley.
With all due respect, you should read more about the SR&ED before you call someone's legitimate criticism an overreaction. It is a program designed to pay back a portion of salaries that go into scientific research or development. This isn't new capital, it is a rebate program where you earn back a portion of salaries that you have already paid.
The challenge in SR&ED is convincing the bureaucrats in charge of the program that the salaries you're asking for a rebate on actually went into advancing the state of technology. One problem is that many of the bureaucrats who work in this program come from accounting backgrounds. Hence the statement that you need to make sure your application contains the magic words that will get an application through.
In practice, the odds of an inventor receiving a full shred if she fills out her own application are nearly zero. So, to take part in a program like this, tech companies need to allocate ~7.5% of their annual research salaries to a shred specialist.
I'm Canadian and I pay taxes, so I have a few problems with this program. It is yet another program where you need an expert to sit in between the relevant business and the government. And, it's a perfect example of a Canadian government program where bureaucracy overwhelms the purpose.
But, as someone who works in tech and has gone through a few shred processes, this program seems crazy. Who is better qualified to explain an invention than the inventors themselves? And, if you need a gatekeeper to explain your innovation, are the bureaucrats involved competent enough to administer a program like this?
Those are important questions for Canadian taxpayers and are most certainly not an overreaction. Your feelings about the VC industry are obvious, but in this case, they aren't very relevant.
Oh I completely agree. SRED shouldn't be difficult. I think the actual practice is more complicated though, having had to go through it. If you do it on your own you risk leaving a whole lot of money on the table, opening yourself up to a filing which won't stand up to an audit, or both. It's just one of those things I'd rather leave to somebody who deals with Revenue Canada on the same issue day in and day out. There are pretty scummy companies doing SRED returns but there are also decent ones who are professional and above board.
Canada was already doing this for the games industry, though not at 80%. It worked. Look at all the studios in Montreal. Perhaps it could work again for the startup culture. It's cold enough up there in the winter that going outside is horrible, so why not stay inside and code!
The article is really light on details, but I'm pretty sure it's not describing anything new. It's just SR&ED (lovingly called shred colloquially) and related provincial programs, which have been around for a long time (in their modern form since at least 1994). In fact, it's probably fair to say that almost every tech employee (and many non-tech employees) in Canada has been under an SR&ED grant whether they knew it or not.
There's actually quite a bit of overhead in reporting on how your work qualifies as research, and it's gotten more strict in recent years. Apparently there have been cases in the past of things like restaurants claiming their chefs were doing research and such.
I believe the company also needs to be majority owned by resident Canadian citizens. There are a number of accounting firms that specialize in SRED claims, but most take a cut of your return in exchange for their services.
The requirements are quite specific. As a designer I didn't qualify for shred when I got here, but programmer colleagues (with an appropriate degree) did.
The requirements are, but enforcement isn't always particularly strong. There's a LOT of companies using SR&ED and relatively not a lot of bureaucrats checking up on it. It's extremely valuable to a company, so some will go to some pretty ridiculous lengths to get it.
Actually it's the province of Quebec and it is a tax credit for video game studios. The incentive was put in place around 1998-1999 and it is said to have been paying itself since 2005 or so from the influx of high paying job in the industry.
And winter isn't that bad, we only get -30C for a week or two in January!
"The downside is a more European attitude toward work— less intense, less ambitious, more likely to have wine with lunch, Mr. Adelman says"
As a Montrealer and a Sotware Engineer having worked at various size companies in this city, I can say I've NEVER seen my collegues have wine at lunch. Working in video game industry and sleeping at the office at crunch time (back in the days) I couldn't say my collegues or I 'lacked' the famed Silicon Valley work ethos ...
This article is fraught with stereotypes and coated with a few fragment of facts ...
I'm moving to Vancouver, BC soon to found a startup, so it's good to hear this. But from comments here, i'm hearing a lot of comments pertaining to Toronto and Waterloo region, but not much about Vancouver or BC in general. Why is that? Is Vancouver/BC not a good place for startups? Am I heading in the wrong direction? I'm still in a position to switch back to Toronto if necessary, so if someone can enlighten me that would be greatly appreciated.
Vancouver seems like a fine place for a startup to me. Better weather than the rest of Canada, same timezone as SF, very short flight to SF. One of Canada's startup success stories, Hootsuite, is in Vancouver. There are lots of video game studios and branch offices of American tech companies (Amazon, MSFT) so there is tech talent around.
I didn't have a startup in Vancouver, but a prominent angel investor in Vancouver put some money into my NYC-based startup, and I flew out there for a couple of 'portfolio summits', with companies largely-based in Vancouver. I liked the group I saw and people I met, but a) that was years ago, and b) I don't know if they were representative.
Hey, if you want to talk to someone in Vancouver about the local start-up scene, why not shoot me an email? (It's in my profile.) I can ask my old investor if he's willing to hop on the phone and answer a few questions.
Vancouver has a strong tech industry, but its cost of living is very inflated. Waterloo in particular has managed to have a thriving tech sector while maintaining a comparatively low cost of living. I wouldn't be surprised if at the end of the day I banked the same amount as I do now if I moved to the valley. Toronto has similar cost of living issues to Vancouver (mostly super inflated housing costs).
The Waterloo region is popular because of U Waterloo (a tech heavy school) and RIM. However, it won't be hard to convince people to move to Vancouver, it's warmer there.
1. Yes
2. Yes, but only for the portion of your time that was SR&ED activities, which if you're the only employee couldn't conceivably be anywhere near 100%.
If you are an owner in the company you only can claim a maximum of 75% of your salary. So if 100% of your time was eligible work and you made $100K you could only claim $75K of that and you'd get a percentage of that $75K back, not the whole thing.
The kill or be killed attitude they mention in this article is interesting because I almost immediately noticed the difference when moving from Canada to California. It's a different animal, that's for sure.
I would say Toronto is only slightly more relaxed than California in terms of deadlines and workload and number of hours expected to work. Definitely less relaxed in terms of dress code. However business does seem less ruthless up there.
Many immigrants prefer the US over Canada because (a) there are major benefits to the US passport, and (b) there are unexpected prestige factors. In some parts of Asia, Canada still has the stigma of being "for people who couldn't get in to the US" even though, for the past 20 years or so, it's been as hard to get into Canada as the US (if not harder).
If you take away New York and Silicon Valley and the unique opportunities those places offer, the appeal isn't living in the U.S. It's having an American passport.
All that said, I think there are plenty of skilled people who'd live in Canada. You see the same thing in the U.S. Midwest. There are a lot of smart people who'd love to stay in, or move to, Chicago and Minneapolis. But the job markets aren't nearly as strong there, so they move to the coasts, settle down, and never return.
Properly deployed, programs like this can change that (although it tends to take a long time).
can you mention one, esp. over the Canadian one? One particularity of the US passport is that you have to pay US taxes even if you live and work elsewhere
My co-founder was one of the first 3 people accepted to Canada from the US via the Startup Visa program (I'm Canadian, made him move) - We're fully realizing the benefits of operating in Canada as a CCPC. This article doesn't even touch on how much is actually going on here. Not only was the cover photo offensive, I question if they even researched the topic because they barely touched on IRAP which is just as beneficial as SRED.
Talk to any founder from Canada and you'll likely get more reliable info then was in this article. The compelling reasons to start a company here are many and they are no secret.
A caution if you're considering Quebec. You might be caught off guard by the draconian French language laws, and restrictions on where you can send your children to school. (Ex-Quebecer here)
Although I worked for several startups that benefited from SRED credits, I always found the system appalling and prefer the way it works in US with VCs.
No government should take hard working folks's money and give them to white middle-upper class, well educated founders that will possibly just get wealthy even more and the class division cycle will continue.
I would bet if you pay this money directly to the engineers themselves they will create much more value.
Anyways I found that writing everyday what I did in a way it looks more as a research just so SRED accountants don't question the company, as extremely annoying to my day flow.
A while ago, I daydreamed the possibility that some government could, by way of international competitive advantage, establish by law a favorable tax situation for corporations that had a "Gov Class" stock. This would represent no less than 10% of the total ownership interest, and would be proxyless and nonvoting, but would have preferred treatment for dividends. Any distributions to Gov Class shareholder would be deductable from any taxes otherwise owed to it, but would not be refundable.
That would allow the government, or anyone in its federation or confederation or otherwise under it in the hierarchy, to invest in startup businesses in such a way that favors local development and limits tax jurisdiction shopping.
If Chicago bought 15% of a new local company as Gov Class shares, it retains 15% of the value of the company and 15% of the profits, at the expense of tax revenues, even if the company moves to San Francisco. In that case, taxes would ordinarily drop to nothing, but as a stockholder, the municipal government retains its investment. But perhaps the State of California buys out City of Chicago to sweeten the deal. Chicago now has that money back to reinvest, instead of pissing away tax dollars to develop companies that just leave when they get big enough.
Of course, that assumes governments could be responsible investors, which is a proposition very difficult to prove. As it is, straight subsidies seem like a far stupider and more bureaucratic way to just waste tax money and enrich business owners without producing the intended effects. If the government is enriching the business owners anyway, wouldn't it be more cost effective to actually be one of the owners?
Do I get it right? I set up a startup. Declare my own salary to be $100. Canadian gov pays me $80. I take $20 of that amount and pay it to myself as the remainder. Sounds like basic income.
I don't understand why all countries require startups to have investment. For one, most tech start ups don't need significant investment and can be boostrap. The average 30 year old has enough saving to get by for a year or two without any investment. I feel require investment is really a cruft of the past and shouldn't be a necessity for visas.
I had more at that age, but now have less. I probably would have been better off marrying a startup instead of a spouse. Either one alone can drain away all the time and money you have, and then some, but only one is likely to make your bank account any larger later on.
Now they say that money can't buy happiness, but not having enough of it is a great way to get miserable. Think about that before you choose.
But really, I want to say this: as a Canadian, I find that image of poutine extremely offensive. What is that yellow stuff on top, Curry? Are those even proper cheese curds? They're not melted. Is that scallion?
How can this article be trusted when their choice of stock photo is so wrong I question if they've ever even had the dish?