Currently ranked 3rd out of 197 countries in the world for the strength of its startup ecosystem, the entrepreneurial scene in Canada is has established a global reputation. Toronto is the second largest technology cluster in North America, and it has become a major destination for business expansion. Here are the reasons why businesses choose Toronto / Canada:
A Toronto address puts your business in the heart of the political and financial centres of North America, with close proximity to New York, Chicago, Boston, Washington, etc. Operating in Toronto gives you quick and easy communication and travel with many other major cities and regions.
Not only is Toronto physically close to major cities, but international trade agreements (such as the North American Free Trade Agreement and the Comprehensive Economic Trade Agreement between Canada and the European Union) open the door to more than a billion consumers across the United States, Mexico and the European Union.
Toronto and Canada are internationally recognized business destinations. Canada was recently designated as the first renminbi (RMB) trading hub in the Americas and the only RMB trading hub in North America. This designation strengthens Toronto’s economic and business relationship with China, making the cost of doing business with Asian partners cheaper for Canadian companies, and boosting trade between the two countries. Doing business in Toronto means doing business with the world.
Focus on Innovation
Canada has a long history of technological innovation. MaRS Discovery District has recently been named as a world-leading accelerator, and has provided which provides skills training and a network of 1,000 high-potential-growth startups that collectively generated more than $1.3 billion in revenue from 2008-2015. It is one of the world’s largest urban innovation hubs, and a home for entrepreneurs building Canada’s next generation of growth companies.
Toronto is also home to one of the top technology industries on the continent with a thriving startup community and more than 14,000 established businesses including tech giants like Microsoft, IBM Cisco, Google and Facebook.
Ease of Doing Business
The World Bank Group lists Canada as the second-best country in the G20 for starting a business, and 6th globally. Canada also ranks highly in ease of getting credit, and protection of minority investors. KPMG’s Competitive Alternatives report lists Canada as having the second-lowest business costs of the countries studied, behind only Mexico. The cost of starting a business is reported to be only 75% that of the United States.
Out of 189 countries, Canada was ranked 18th by The World Bank in its Ease of Doing Business Survey from 2018. 26 Specific business criteria that Canada ranks highly for include starting a business (2nd), protecting minority investors (8th) and getting credit (12th).
Furthermore, starting a business in Canada is a fast and user-friendly process that can be completed within 1 – 4 days. Business owners need only to file for federal or provincial incorporation and register for VAT to complete the process.
Tax Benefits: Foreigners that have businesses established in Canada are still eligible to apply for a variety of tax incentives that help defray the cost of employees engaged in R&D, materials, overhead, and contract expenditures. Some examples include the Scientific Research and Experimental Development (SR&ED) tax incentive program and the Industrial Tax and Research Program.
Government Grants: The Canadian government is working hard to build and support successful startups and more broadly, ecosystems. Forbes reported that the Canadian government even provides refunds of up to 65% on companies’ investments in this sector, giving it a distinct edge over other regions. Majority of the government grants can be divided into 4 business areas: Business Expansion Funding Grants and Loans, Capital Investment Funding, Hiring and Training Grants and Research and Development Funding. Its competitive R&D environment and financial stability keep it driving innovation.
Education is free and is well funded by the Government. Canada consistently ranks near the top of a wide range of education-related metrics, including the percentage of the workforce with a post-secondary education, skills recognized by the World Economic Forum’s Human Capital Index, and the educational attainment levels of Canadian schoolchildren.
Toronto is a marquee destination for global talent, making it a prime place to do business. Every day, people from around the world converge in Toronto; tens of thousands choose this city as their new home each year. Toronto’s deep, diverse and globally connected talent pool of skilled, highly-educated and culturally savvy individuals is the driving force behind its economic prosperity and innovation.
With an estimated 15,000 companies and 200,000 tech workers, the Toronto-Waterloo corridor has been ranked among the top 20 technology clusters in the world and second largest technology cluster in North America. This is primarily because it connects Canada’s biggest, most diverse city (Toronto) with her leading innovation and research hub (Waterloo).
This is supported by the availability of financial capital, as Toronto has the second-highest concentration of large bank headquarters in the world and accounts for more than $1.5 trillion in institutional investor capital while Waterloo has the second-highest density of startups in the world. International Tech Giants such as Uber, Microsoft and Google have announced offices and innovation hubs in this region.
Canada’s tech ecosystem is keeps on growing, and is showing no signs of stopping.
Ontario’s three leading innovation hubs are working together to raise the tides in Canada’s tech ecosystem, with the goal of surfacing a new generation of $100-million companies.
In addition, large investments in Canadian startups are trending upwards. In September 2019 alone, Canada saw four venture capital deals surpassing $100 million for organizations in Hamilton, Vancouver, Toronto and Montreal, accelerating the expansion and development of homegrown companies. The impact of this investment spike can’t be understated: in all of 2018, Canadian startups saw only three deals that rose above $100 million.
With Canada having all the ingredients for a very successful ecosystem, the only question is: Are you ready to take on this high potential ecosystem?
The best way to experience and learn about Toronto’s startup ecosystem is to immerse yourself in the city. LatAm Startups is currently accepting registrations for our marketing validation program: Scaleup Bootcamp for March 2020. Spots are limited! Registration deadline is October 30. Visit our website to learn more about the programs and how we can help your business.
For more detailed information regarding Canada’s startup ecosystem, please download our White Paper: Canada, Your Gateway to the North American Market. If you have any further questions regarding the ecosystem, send us an email at firstname.lastname@example.org.