Investing in Canada: the Silicon Valley of the North
The fastest-growing tech hubs are no longer limited to the San Francisco Bay Area. Canadian cities have emerged as ideal ecosystems for nurturing technology companies.
In particular, Toronto, Edmonton, Montreal, and Vancouver are well-known hubs for innovation, attracting some of the world’s top tech talent.
Today’s graphic from the Canadian Consulate in San Francisco highlights why Canada’s booming tech industry is attractive to foreign companies, and where the new avenues for growth are located.
Investing in Canada’s Tech Sector
Canada is an attractive market for foreign investors and corporations.
- Free Trade: Canada is the only country that freely trades with every G7 nation
- Innovation: The tech startup ecosystem in Canada ranks 3rd in the world
- Stability: Canada’s social and political climate ranks in the top 20 most stable worldwide
Foreign direct investment (FDI) into Canada is fueling this growth. In just a year, FDI grew by 70%—from $32.2 billion in 2017 to $54.7 billion in 2018. There are three primary types of FDI:
|Horizontal||Same type of business established in a foreign country||Cell phone provider in the U.S. opens stores in Canada|
|Vertical||Different but related business established or acquired in a foreign country||U.S. manufacturer acquires a Canadian supplier of parts or raw materials required for its products|
|Conglomerate||An investment made in a business unrelated to the foreign investor’s existing business||Joint venture between a Canadian Artificial Intelligence (AI) company and a U.S. company with no experience in AI|
For many years, Canada has maintained an open flow of trade, investment, and talent with other nations. That’s why many well-known foreign companies are flocking to the “Great White North” to attract world-class talent.
Who’s Got Talent: Hiring the Best
Canada is an emerging leader in talent attraction. The influx of FDI and skilled immigrants has sparked the “brain gain” throughout Canada’s tech sector.
The Global Skills Strategy (GSS) is a recent federal program that fast tracks immigration for highly-skilled workers applying directly to Canada or through U.S. companies. In 2018 alone, the GSS received over 10,000 applications─with a 96% success rate for approved work visas.
Shorter processing times for Canadian work visas are enabling more efficient immigration. Canadian visas are now processed within 10-14 days, compared with the typical U.S. timelines of 6-10 months.
Locally, Canadian tech talent has also grown formidable. Notable experts in AI, deep learning, and technology have pursued lucrative research and career opportunities in Canada.
Canadian Tech Pioneers
- Yoshua Bengio: 2018 Turing Award, University of Montreal
- Richard Sutton: Google DeepMind, University of Alberta
- Joelle Pineau: Facebook AI Research (FAIR), McGill University
- Geoffrey Hinton: Google, 2018 Turing Award, University of Toronto
- Donna Strickland: 2018 Nobel Laureate, University of Waterloo
- Doina Precup: Canadian Institute for Advanced Research (CIFAR) Senior Fellow, McGill University
- Sanja Fidler: NVIDIA Director of AI, University of Toronto
- Hugo Larochelle: Google Brain, CIFAR Associate Director, University of Montreal
Notable accolades include the Turing Award, which is given annually to selected individuals for their contributions “of lasting and major technical importance” to the computer science industry.
Highly skilled professionals such as those listed above are working closely with both renowned academic organizations and major tech companies to foster innovation in Canadian tech.
Show Me the Money: Setting up Shop in Canada
Companies that choose to invest in Canada’s technology sector also have access to several key financial incentives.
- Tax Incentives
Foreign companies can receive corporate tax breaks for investing in a Canadian office. Any research and development (R&D) work may also be eligible for Scientific Research and Experimental Development (SR&ED) tax credits.
- Lower Labor Costs
Lower costs of living throughout Canada allows foreign companies to pay lower wages to staff without impacting quality of life. The rent-to-tech wage ratio─the ratio of a tech worker’s monthly housing costs to their monthly wages─is significantly lower in Canada compared to major U.S. tech hubs. For example, Montreal’s ratio is 12.6%, compared to San Francisco’s ratio of 26.4%.
- Lower Operating Costs
Setting up a physical office also offers more value per dollar for foreign companies, as most operating costs are significantly lower in Canada.
The Canadian tech industry is consistently boosting job growth, tech innovation, and wealth creation─all important considerations for foreign companies and investors.
Attracting Foreign Companies to Canada
Many view Canada as a land of opportunity─ the country consistently ranks highly on global happiness, thanks to its stable politics, social factors, and strong economy.
With quality talent and lower costs, Canada is fertile ground for U.S. and foreign tech companies seeking to grow their businesses and global reach.
Ethical Supply: The Search for Cobalt Beyond the Congo
With the current supply chain of cobalt under scrutiny, companies and governments are striving to find new sources of cobalt beyond the Congo.
Ethical Supply: The Search for Cobalt Beyond the Congo
Each new generation finds new uses for materials, and cobalt is no exception.
Historically, potters and painters used cobalt as dye to color their work. Today, a new cobalt supply chain is emerging to build the next generation of clean energy.
However, there is lack of transparency surrounding the current supply chain for cobalt, as the metal is subject to a number of ethical issues from its main country of production—the Democratic Republic of Congo (DRC).
Today’s infographic comes to us from Fuse Cobalt and uncovers the potential for new sources of cobalt beyond the Congo.
Cobalt’s Growing Demand
Cobalt’s specialized properties make it crucial for rechargeable batteries, metal alloys, and EVs:
- Thermal stability
- High energy storage
- Corrosion resistance
- Aesthetic appeal
As the markets for EVs and rechargeable batteries grow, the demand for cobalt is expected to surge to 220,000 metric tons by 2025, a 63% increase since 2017.
But can industry meet its demand with a supply of ethically mined cobalt?
A Precarious Supply Chain
In 2019, the DRC produced 70% of global mined cobalt—a majority of which went to China, the leading importer of mined cobalt and an exporter of refined cobalt.
Moreover, 8 of the 14 largest cobalt mines in the DRC are owned by Chinese companies, resulting in a highly controlled supply chain.
Why the Democratic Republic of Congo?
When it comes to cobalt reserves and concentrations, DRC looms over the rest of the world as a clear leader.
|Country||Cobalt reserves as of 2019 (tons)|
|Papua New Guinea||56,000|
|Rest of the World||500,000|
|World total (rounded)||7,000,000|
The African Copper Belt hosts the majority of the DRC’s cobalt deposits, where it is primarily mined as a by-product of copper and nickel mining.
Low labor costs, loose regulations, and poor governance in the DRC allow for the flourishing of artisanal mining and cheap sources of cobalt.
However, cobalt from the DRC is tainted by ethical and humanitarian issues, including:
- Child labor
- Hazardous artisanal mining
With the current supply chain of cobalt facing scrutiny and criticism, a transformation in the cobalt universe is well underway.
Cobalt’s Changing Landscape
As consumers become aware of the dirty costs of cobalt mining in the DRC, battery and EV manufacturing companies are looking for ethical sources.
Tesla, BMW, Ford, and Volkswagen are part of more than 380 companies that have committed to responsible sourcing through the Responsible Minerals Initiative. Responsible sourcing entails increasing supply chain transparency and searching for sources of cobalt outside the DRC.
Here’s how some companies are leading the way:
- Ford, Huayou Cobalt, IBM, LG Chem, and RCS Global are using blockchain technology to improve transparency and trace the sources of cobalt.
- BMW signed a $110 million deal for cobalt from Morocco’s Bou Azzar Mine, in an effort to avoid cobalt sourced from the DRC.
- Tesla agreed to buy 6,000 tonnes of cobalt annually from Glencore, a multinational company financing North America’s first cobalt refinery.
The U.S. recently added cobalt to its list of critical minerals—minerals for which it seeks independence from imports. The effort aims to reduce its net import reliance of 78% for cobalt, encouraging more localized and reliable production.
As a result of these shifts, the entire supply chain is beginning to reconsider cobalt sources in better-managed jurisdictions.
Cobalt Beyond the Congo: Why Not North America?
North America has comparable sources of cobalt to what is found in the Congo. As of 2019, Canada had 230,000 tons in cobalt reserves, whereas the U.S. had 55,000 tons.
Ontario hosts some high-grade cobalt deposits such as the Cobalt Silver Queen, Nova Scotia, Drummond, Nipissing, and Cobalt Lode mines.
In fact, Bill Gates, Jeff Bezos, and other billionaires from the Breakthrough Energy Fund are already fueling the exploration and development of cobalt deposits in North America.
Unsung North American Potential
The United States is home to 60 identified deposits of cobalt. These sources along with Canada’s deposits, should provide explorers and miners with a massive opportunity to develop cobalt mining in North America.
As the EV industry booms with gigafactories in construction, will North American carmakers and other battery makers be able to pivot to ethical, local raw materials?
On the Edge of Discovery: Canada’s Next Gold District
Canada is home to prolific mining regions, but there is still more to find. The Trans-Hudson Corridor could be Canada’s next major gold district.
On the Edge of Discovery: Canada’s Next Gold District
Canada is home to some of the greatest gold districts in mining history. These regions occur mostly across Ontario, Québec, and British Columbia, where past mineral exploration has uncovered their geological potential.
But Canada is vast, and there are still more regions to explore—in particular, the Trans-Hudson Corridor. It’s here that SKRR Exploration and Taiga Gold are leading the way into a new mineral frontier, with the hope of uncovering Canada’s next gold district.
Canada’s Major Gold Districts
The Abitibi Greenstone Gold Belt, the Red Lake Gold District, and the Golden Triangle are key sources of gold in Canada.
- Ontario and Québec’s Abitibi Greenstone Gold Belt:
With over 100 mines, this gold belt stretches across the provinces of Ontario and Québec from Wawa to Val-d’Or. The belt has produced a massive 180M ounces of gold over its history and remains today a source of gold and employment in Northern Ontario.
- Ontario’s Red Lake Gold District:
The Red Lake Gold District experienced its first gold rush following initial discoveries in 1897 and 1925. With over 30M ounces of gold produced since then, the Red Lake mining district is one of the largest and highest-grade gold camps in North America.
- British Columbia’s Golden Triangle:
Having hosted the Stikine Gold Rush and the Atlin Gold Rush, the Golden Triangle is a popular destination for exploration companies. Investment in the region has produced 5.26M ounces of gold and impressive discoveries such as the Bruce Jack mine and the Kerr-Sulphurets-Mitchell (“KSM”) project.
Although these regions have garnered attention from large mining companies, the Trans-Hudson Corridor is open for a new era of discovery, and very few companies have taken advantage of it.
The Trans-Hudson Corridor: Canada’s Next Gold District?
The Trans-Hudson Corridor lacks an extensive exploration history, but it shows potential as a prime area for discovery.
The Trans-Hudson Corridor stretches from the Dakotas of the United States to James Bay in Canada. One of the few remaining exposed portions of the Trans-Hudson, the Black Hills region of South Dakota, hosts the famous Homestake Mine, which produced 43.7 million ounces of gold and 9.9M ounces of silver before closing in 2001.
Despite the geological potential of this corridor, there have only been a few operating gold mines in the northern portion of the Trans-Hudson. One study indicates there may be more gold mineralization near the Snow Lake mine.
Saskatchewan: Major Gold Mines and a Lack of Exploration
Saskatchewan has geological potential—but compared to other regions, explorers are barely scratching the surface.
For all of Canada in 2018, mining and exploration investment amounted to C$2.2 billion. Saskatchewan received some of the lowest amounts with only C$165 million expended. Only 2% of the $165 million went towards exploration for gold, while the rest for uranium and potash.
Canada: Safe and Stable Mining Jurisdiction
The Trans-Hudson Corridor offers a safe, stable, and accessible mining region in today’s volatile world. In particular, Saskatchewan provides a competitive edge for mineral exploration:
- Affordable access to North American capital markets
- Mineral exploration incentive programs
- Low-cost, high-quality road and power infrastructure
- A well educated and professional workforce
Canada has the geological potential for big gold discoveries and the next era of discovery could be waiting in the Trans-Hudson Corridor.
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