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Having worked 15+ years in both countries (SF, NY, Toronto, Calgary), you're not wrong. But this is a bit misleading.

In the SF Bay Area or NYC, yeah, double to triple. But a lot of that is cost-of-living related. Housing is half (or even less) the price in most cases, with Vancouver being an exception. I paid $2700/month for my 800 sq. ft place in Pac Heights with parking, we pay maybe $2200/month with property taxes in Calgary for a 1600 sq. foot house w/ 2 car garage just slightly north of the Bow River. Whereas a small 2br in NY in the West village was $4k a month 10 years ago.

That said, most living-in-Canada techs making good coin are either (a) working at Vancouver startups, who pay reasonably (b) working as contractors doing boring/annoying work that pays well, (c) working for international tech companies who pay the same rate in Canada as they do in the USA (usually in field sales or consulting - this is what I currently do).

The main reason I don't think this holds Canadian tech back is that many people meet their significant other here and don't want to deal with the hassle of leaving - they like the rockies, for example, or have family, or love snow. Or they're stuck for one reason or another (child custody, etc.). There's also a rather poisonous political environment in the USA that adds a cost to one's stay there.

I also think it's a great opportunity for companies to thrive in Canada and retain talent by paying them well and giving them access to lifestyle incentives. Not quite a startup, but an example: Cenovus energy has a startup-like culture in some ways after being spun out in 2002. They give employees every 2nd Friday off, they have major perks for working families, discount family passes to Banff/Lake Louise for skiing, and pay extremely well (usually bridging your pension, RSUs as part of a signing bonus).

Being from Vancouver myself, I frequently go back and do the math on cost of living. No matter which way you bend the math, even accounting for the (massively) inflated housing prices in the Bay Area or NYC the American salary still comes out ahead. Far ahead, even. I've heard Canadian friends use this sometimes as a reason to not consider state-side opportunities, but in their cases it's simply not true.

Granted, this is math for a single guy with no children - so YMMV.

I don't disagree with any of the facts you've laid out - but I do disagree heavily on whether or not this is holding Canadian tech back. There are certainly people who won't move to the US for any number of reasons - family, lifestyle, geography, politics, etc.

But the fact of the matter is that there are over 300,000 Canadians in the Bay Area[1] - clearly the number of people willing to jump south of the border overwhelms the number of people who will not. This represents nearly 1% of the entire population of Canada. The brain drain is very real, it's biased towards the more desirable parts of the talent pool, and it's happening at a mind-bogglingly large scale. While the brain drain will never claim everyone, it's certainly claiming enough talent that I think it's hard to argue that it's not having a massively negative effect on the industry domestically.

[1] http://business.financialpost.com/2013/07/10/why-canada-is-f...

>> 300,000 Canadians in the Bay Area... This represents nearly 10% of the entire population of Canada.

Canada's population is ~33 million, so that would be about 1%, not 10%. Still a surprisingly big number, though.

D'oh. Brain fart. My bad :(

I held highly similar views in my 20's when I was single with no children. I encouraged all my friends to move to the states, that Canada's brain drain was zombifying the country etc. I even had a dart board with John Roth (ex Nortel CEO)'s face on it because of the way he bragged about paying Canadians less than Americans.

This was in the 90's during the dot com boom... but the world kept turning, Canada didn't implode, there's still talent here, and I eventually moved back to have a family (no way do I want one raised in the USA).

I have plenty of friends staying in the USA for the reasons you state and I may go back some day when our kid(s) are older for the reasons you cite. But I'll just say that money isn't everything ... it's arguably the single most important thing.. others factors eventually add up however.

Don't get me wrong - what I'm saying is not meant to be prescriptive, for you or anyone. I'm not necessarily saying that Canadians should all move to the US to get paid more.

And hell, I may be back someday - I can't see it, but I can't discount it. I do like Vancouver too much to stay away forever.

My point is that empirically, money matters to people. Those 300,000 Canadians aren't hanging out in the USA for fun, they are largely there because of the market gap. This is an enormous loss of talent for Canada.

Now, we can argue about whether or not they're making the right decision being in California, paying Bay Area rent, etc etc, but the fact of the matter is that they're doing it, which puts them in the US, and not Canada, and harming the Canadian tech industry. We're training a huge number of capable technologists, exporting the bulk of them to the US, and the domestic tech industry is poorer for it.

I do not see anything slowing the brain drain by an appreciable degree, except to hugely raise engineering salaries in Canada. I don't think there's a chance in hell of this happening. And I believe that the brain drain, at its current scope and scale, is having a large chilling effect on creating the sort of companies and jobs that the blog author is talking about.

There are still certainly tech jobs in Canada, there are even (some) very well-paid ones, but Canada cannot hope to have even a sliver of the scale of the Valley's success unless it can retain its own talent pool.

It should be noted also that the link from my previous post is an op-ed by the CEO of HootSuite, itself one of the bigger successes to come out of the Canadian startup scene, where he claims that the shallow talent pool (and the brain drain) is a large growth-limiter on his business.

Where he and I disagree is that he advocates for more immigration and education as a solution. Based on what we've seen with Canadians moving south, I think it's a sure bet that the immigrants he proposes to import will likewise drift southwards, and the extra graduates he proposes to educate will do the same. Short of some kind of indentured servitude you can't prevent that from happening. We even have companies like Microsoft and Facebook who specifically set up Canadian offices for the purpose of greasing this "Canadian immigration as gateway to USA" process along.

Of course, IMO the real solution HootSuite's talent woes is to make their pay market-competitive with the American companies that are draining their talent pool...

Largely agreed, though I am skeptical about your southward immigration theory, and do think (in lieu of broad based salary increases) that immigration is a good solution to Canada's talent shortage. Why? Look at our whole discussion - clearly it is the US's solution! :)

My point is that (a) US immigration reform is dying in the house of representatives, there's a chance the US will make it harder and harder for Canadians to stay there. I know I had my complications. Canadians largely enter the US on TN visas, which have gotten easier (the 3 year renewal requirement vs. 1 year). An immigration-unfriendly administration could make this harder.

H1B's are also possible lately as the quotas haven't been being hit since the financial downturn, but they have always been highly controversial.

(b) Canadians require citizenship before they can be eligible for a TN visa to the USA. It's a long period of time for a Canadian immigrant to achieve citizenship in Canada and THEN move to the USA.

Anecdotally, I have seen what you're suggesting (a southwards movement), but not with the majority. For example - my colleagues & friends that have received permanent residency in Canada from India (usually engineers from Infosys or TCS that were part of the onshore crew of a contract) have mostly stayed in Canada, with a couple of exceptions that moved to the USA for a specific job opportunity and used the L1 visa to do it.

My girlfriend is Canadian but this is exactly what prevents us from moving there, I love Canada as a country.

But something's missing from this equation.

If wages are low in Canada because there is a glut of workers relative to the number of jobs, then why doesn't the sector expand to take advantage of the low wages?

Contrarily, if the sector is small because high wages attract workers to the states, why can't Canadian companies pay as much as the American companies? There's nothing magical about America that allows its startups and companies to pay so much; Canada isn't particularly poor itself and its companies don't even have to pay for workers' health care.

Either way, there has to be a deeper reason.

Wage rates are less elastic than simple supply/demand until you get to macroeconomic scale.

I'm obviously not an expert on Canada, so I'll try to illustrate one way it might work, but please feel free to shoot this full of holes...

Say companies in Canada start by paying their employees half of a competitive wage. Not all employees will notice. The ones who are willing to move thousands of miles will eventually disappear but there will always be new hires, right? Thus the management gets away with low wages.

I _have_ seen this exact scenario play out in several locations in the US, but not Canada.

In this scenario, the company slowly accumulates B and C players who drag down the company's reputation: death by a thousand paper cuts. The company doesn't _die_ outright, but everyone just thinks, "Oh, not a Silicon Valley level company."

At that point the company will never make enough money and can't even dream of raising wages.

Only at that large scale (companies competing for talent and then trying to turn their talent into revenue) do you start to see the effects of their salary range.

- In this scenario, the company slowly accumulates B and C players who drag down the company's reputation: death by a thousand paper cuts. The company doesn't _die_ outright, but everyone just thinks, "Oh, not a Silicon Valley level company."

Interestingly, you just described what happened to RIM.

> "then why doesn't the sector expand to take advantage of the low wages?"

It is. See: the huge presence of multinationals in Canada like IBM, SAP, even gaming giants like EA and Ubisoft. The Canadian tech industry is by no means shrinking, it's just growing in a way that doesn't fit Silicon Valley's "high pay, high benefits" mold. Canada has not seen the massive software engineering wage explosion that the US has.

Which naturally leads to your next question:

> "Contrarily, if the sector is small because high wages attract workers to the states, why can't Canadian companies pay as much as the American companies?"

This is a big and complicated question. The short answer is: because it somehow got this way and now we can't change it.

It's important to note that the US tech industry isn't all shuttles and gourmet meals either - the bulk of the industry is paid a fraction of Silicon Valley salaries, with none of the cushy benefits. The tech industry is divided into the low/mid-end and the high-end, and the two sides could not be more different.

There is an active war for talent in the high-end that keeps driving up salaries and benefits, while low/mid-end software engineering remains relatively stagnant. It's largely a group of companies working on computationally hard problems that's driving this war - folks like Google, Facebook, Microsoft, Amazon, etc. These companies are uninterested in low/mid-end talent, confining the insane salaries to only a small segment of the total industry.

This segment of the industry also largely does not exist in Canada. Canada's tech scene has, for many complex and perhaps unexplainable reasons, developed into one that is largely enterprisey. The tech jobs are largely at not-tech companies (where you're a cost center, not a profit center), and where they are at tech companies, they are at satellite offices of American or European companies.

This doesn't create a market where there is high demand for top-level talent. Complicating this somewhat is the fact that the talent war in the US has bled across the border, thanks to relatively easy immigration laws for Canadian citizens - the bleeding of talent to the south prevents the establishing of companies locally that would feed on a top-level talent pool.

So this really circles back to OP's original complaint. The reason why wages aren't rising in Canada is because companies that demand high talent do not exist in Canada. There are no major companies working on truly hard problems that would demand campuses full of top-level engineers, and thus no drivers for salary growth.

The companies that do exist cannot raise salaries wildly for a few reasons. Firstly, because they are not having trouble finding talent at the level they want at their existing salaries. Secondly, because their business model may rely on being cheaper than the US. Thirdly, there is a lack of institutional employers who employ high-end engineers which would kickstart a talent war.

Not only do you make more as a software developer in the USA, the living costs are much less (I believe the average price of a home in Canada is currently close to double that in the USA [1])

I think a person is more likely to pursue a startup and succeed at it when they can spend less time/energy covering their basic living expenses. A lot of SV giants were started by people in their garages, they simply had enough surplus resources to pursue their ideas[2].

[1]http://www.cbc.ca/news/business/story/2013/06/05/business-oe... [2] http://en.wikipedia.org/wiki/HP_Garage

In general this is not actually true. Software developers as a whole do not make much more in the USA than they do in Canada.

Only certain geographies tend to have a large number of high-paying software jobs, and those places (see: Seattle, SF, NYC, etc) tend to have inflated housing prices.

Ditto Canada, there are plenty of places where housing is cheap - but that's not where the tech jobs are. The bulk of the tech work is concentrated in cities like Vancouver, Toronto, and Montreal where housing is expensive.

That being said, being a Vancouver native I try to keep an eye out on salaries in the city vs. cost of living. Vancouver has the double whammy of being extremely expensive but not nearly making it up in pay - this is a somewhat uniquely Vancouver phenomenon though... housing in other parts of Canada is less insane.

Lower salaries is a benefit for business (and startup), not a disadvantage.