Waterloo Region is the fastest-growing major tech market in Canada, according to new research from commercial real estate and research firm CBRE.

Jobs in the Waterloo Region tech ecosystem grew 51.4 per cent between 2014 to 2019, more than Vancouver at 47.9 per cent and Toronto at 36.5 per cent.

Guelph, a much smaller tech market, had the fastest tech job growth overall at 65.5 per cent, a pace that reflects its location next to the thriving Toronto-Waterloo Innovation Corridor, the report says.

The CBRE report – called Scoring Canadian Tech Talent – ranked 20 tech markets across the country based on a variety of metrics that were each weighted by relative importance to companies seeking tech talent.

Overall, the top tech talent markets in 2020 were Toronto, Ottawa, Vancouver, Waterloo Region and Montreal.

“These locations possess the strongest combination of attributes that the technology sector requires to flourish including, and most importantly, a high concentration of tech employment,” the report says.

Looking at individual categories, Waterloo Region ranked No. 1 in the country for both quality of labour and talent quality-to-cost.

“We have known for years that smaller communities are magical,” said Iain Klugman, CEO of Communitech. “The CBRE report is one more indication of the breadth, depth and strength of the tech ecosystem in Waterloo Region.”

Another source of data, compiled previously by Toronto innovation economist Charles Plant, indicates that Communitech member companies outperform other tech companies on a variety of measures, including:

  • Communitech members raise 19 per cent more capital: $28.6 million compared to $24 million.
  • Communitech members raise more rounds of financing: 3.4 compared to 2.5.
  • Communitech members raised up to nine per cent more financing in recent rounds: $17 million compared to $15.9 million.
  • Communitech members hold more patents: 13.1 compared to 8.5.

The CBRE report also addressed the impact of COVID-19 on tech markets, noting that nearly all major tech stocks saw earnings increase year-over-year as of Q3 2020.

“These same companies now view the current landscape as an opportunity to penetrate and establish themselves in markets where they’ll benefit from tech talent over the years ahead,” the report says. “This extends to talent-rich mid-sized markets, such as Waterloo Region or Edmonton, which could see disproportionate benefits from firms electing to establish office campuses that may even be larger in size there than what they’ll occupy in markets like Toronto, Vancouver and Montreal. Unperturbed by discussions surrounding the role of the office, these firms are making pragmatic decisions with long-term mindsets.”

Klugman also noted the growth opportunities presented by wider acceptance of remote or “proximity optional” work formats. Just today, Communitech announced the expansion of its Outposts service, which helps Canadian companies hire the internationally based talent needed to foster revenue growth in foreign markets.

“COVID-19 has brought the future of work into the present, prompting many companies to take a proximity-optional approach to hiring for the foreseeable future,” Klugman said. “Communitech Outposts offers an unprecedented level of support for Canadian companies looking to employ remote talent internationally or conduct business virtually, across borders.”

Other data in the CBRE report include:

  • The number of tech workers in Waterloo Region grew to 22,400 in 2019, up 51.4 percent or 7,600 individuals since 2014. By comparison, tech employment in Toronto grew to 250,000 in 2019, up 36.5 per cent or 66,900 individuals in the same period. The Ottawa tech market grew to 76,200, up 1.5 per cent or 1,100 individuals.
  • Waterloo Region’s tech talent as a percentage of its overall employment reached 8.5 per cent in 2019, behind Ottawa (11.3 per cent) but on par with Toronto (8.8 per cent) and ahead of Vancouver (7.0 per cent)
  • The total number of tech workers in Canada stood at 899,200 in 2019, up 22.5 per cent and adding 165,300 jobs to the Canadian economy between 2014 and 2019.
  • Waterloo Region had the highest average annual wage for software developers in the country, at $95,000. Among the top five per cent of highest paid software developers, Waterloo Region came second at $146,000, behind Ottawa at $160,000.

CBRE is a global commercial real estate services and research firm. Each year it publishes a number of reports. In a July 2020 report, CBRE ranked Waterloo Region No. 1 overall in its “Next 25” list of up-and-coming tech markets in North America.