Tech troubles rise with dropping dollar

A slump in the Canadian dollar, which hit a 12-year low recently, has made it harder for the country's technology companies to recruit top talent, posing a longer-term risk to the sector's development, industry veterans said.
The dollar's slide means Canadian startups also face tougher competition for staff from the local divisions of deep-pocketed US players such as Google, which have set up in technology hubs like the Kitchener-Waterloo region of Ontario and in Vancouver, B.C.
"The biggest thing that all of these (Canadian) companies face is a war for talent," said John Ruffolo, whose OMERS Ventures backs a string of Canadian growth companies, according to the Times of India.
The pain of the currency's deterioration has been acute for Joel Leetzow, who left a high-paying tech job in the United States to become chief executive of Cortex Business Solutions in Calgary.
To be sure, the currency's weakness does help Canadian companies with US sales, who win an immediate boost to revenue.
But Leetzow noted Cortex, which derives about 40% of revenue from the United States, loses some of that advantage as it hires US workers to try to boost sales there.
"I felt it personally," said Leetzow. "It sucks."
Canadian startup executives and their backers fear local hiring could be further hurt by the recently elected Liberal government's pledge to increase taxes on stock options.
Acknowledging the issue, the government has promised to allow employees to claim up to C$100,000 in gains a year.
"You're fighting for skills all the time and you need as many arrows in your quiver as possible," said Ron Shuttleworth, a capital markets adviser to Canadian technology companies.
Canada's startup sector has been growing despite broader economic weakness. It secured C$2.6 billion ($1.85 billion) in venture funding in 2015, an 11% jump over 2014 and the most since 2002, according to Thomson Reuters data.
Cisco Systems opened a Toronto innovation center this month. Days later, Alphabet fired a confetti cannon at Prime Minister Justin Trudeau to mark the migration of Google Canada's engineering hub in Kitchener to a space three times bigger than their old one.
"Big companies like Google doubling down on Waterloo will definitely drive wages up," said Ted Livingston, founder and CEO of Kik Interactive, one of hundreds of tech companies that have sprouted up near the University of Waterloo, a well-known source of technical talent.
A BC Stats report said tech-based economic activity has grown to more than $23 billion, with last year's tech exports exceeding $1 billion for the first time ever.
They understand how a positive business environment supported by programs like the BC Jobs Plan creates the foundation for success.
In 2013 employment grew by 1.4%, with over 86,000 people employed in the B.C. tech sector.
To keep this trend going, we are taking action in post-secondary education and skills training to ensure that businesses here will have the trained, professional workforce they will need to keep growing.
Home-grown talent is the best way to guarantee we have a sustainable tech industry, according to local officials.

 

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