Toronto ranks 4th in North American tech talent, driven by demand for AI skills: CBRE

Hey there, time traveller!
This article was published 04/09/2024 (742 days ago), so information in it may no longer be current.

Toronto saw the most tech job gains of any North American market over the last five years as demand for artificial intelligence skill sets rose, a new report says.

The city added 95,900 tech talent jobs between 2018 and 2023, representing growth of 44 per cent over that time frame, commercial real estate services firm CBRE said in a report released Wednesday.

Toronto ranked fourth in the top 50 tech markets for this year, moving up one spot compared with last year, the report said. The top three markets were the San Francisco Bay Area, Seattle and New York.

Colin Yasukochi, executive director of CBRE’s tech insights centre, said increased demand for artificial intelligence skill sets has fuelled tech talent job growth across all sectors.

“For the first time in more than a decade, more tech talent was hired by non-tech companies,” Yasukochi said during a webinar on Wednesday.

Toronto was not the only Canadian city to move up in the report’s ranking. Ottawa moved up one spot to rank 10th. Calgary jumped to the 17th spot.

Meanwhile, other major tech centres including Vancouver, Montreal and Waterloo, Ont., dropped in their tech talent rankings.

In Canada, about 40 per cent of tech workers were in the high-techindustry, while the rest were hired in non-tech sectors such as finance, government, manufacturing, as well as transportation, warehouse and wholesale.

Vancouver, Toronto and Montrealaccounted for 60 per cent of Canada’s total AI jobs, the report said.

Toronto has become a hub for AI research and development, attracting top talent from around the world, said Liz Nucci, CBRE’s senior vice-president.

On the real estate side, she said, “We are starting to see the increase of AI employment lead to increased office demand in tech sectors beyond tech, so finance, law, insurance.”

“On the tech side, both local AI startups and notable big-name tech giants are actively expanding their footprints in downtown Toronto, some more than doubling their size,” she added.

Nucci added lower operational costs attracted companies to Toronto.

“Operating in Toronto is more affordable than in other U.S. tech hubs,” she said. “For example, Toronto office and labour costs combined are nearly half of those in San Francisco.”

While tech salaries remain competitive in Canada, housing affordability remains a challenge.

Rental prices have surged and supply has tightened in recent years in the Greater Toronto Area, while borrowing costs and elevated home prices remain a challenge for those looking to buy a house. The report said average rental prices in Toronto surged 34 per cent in the last five years.

Nucci said housing is one of the factors in talent decision-making.

“Toronto, and all cities for that matter, would be wise to address housing challenges as swiftly as possible in an increasingly competitive environment for talent,” she said.

Employment opportunities in Toronto, Calgary and the San Francisco Bay Area were ample as there were more tech job openings than tech graduates in those markets, making the cities more attractive for workers, the report said.

For example, Toronto had 34,843 tech graduates between 2018 and 2022 compared with more than 94,000 jobs between 2019 and 2023.

In contrast, New York Metro, Washington D.C. and Boston produced more graduates than jobs.

Nucci said immigration and favourable visas supported growth of tech workers in major Canadian cities, compared with the U.S. where it can be hard to navigate immigration status.

This report by The Canadian Press was first published Sept. 4, 2024.