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What exactly do they propose is the incentive for founding a startup in Canada instead of just doing it in the US? It can't be Waterloo because those grads don'

by n00b101 11y ago

What exactly do they propose is the incentive for founding a startup in Canada instead of just doing it in the US? It can't be Waterloo because those grads don't want to stay here, as things stand (brain drain effect). It can't be the weather, or taxes. It definitely isn't the investors, Canadian investors are notoriously conservative when it comes to new ventures (unless your business is to dig a new hole in the ground and pull out rocks). It isn't the cost of living, the average price of a home in Toronto is $1M. The only support for startups is a decades old tax credit program called SRED which requires you to domicile your company as a Canadian owned private corporation (e.g., no Delaware corporations) and it is notorious for being beuraucratic and it clearly favours larger established companies over true startups. The government has failed miserably at incentivizing startups. This latest pitch seems to be based on nothing more than dusting off the old canard of Canada being more "multi-cultural" than the US, and using Donald Trump to attract startup entrepreneurs? This coming from the institutions that gave us Stephen Harper and Rob Ford? These gimmicks are more of an indication that they're not serious abot incentivizing startups, they are just trying to score political points at home.

altotrees 11y ago
My uncle is an engineer in Toronto, and often speaks positively of the startup scene in parts of Canada. I know Waterloo loses quite a few grads to the Bay Area and other major U.S. cities, but haven't some companies actually relocated to be closer to the scene there? I am thinking Pivotal Labs and Google off the top of my head. I am genuinely curious on your take, since you seem to have direct knowledge. I have seen many people say things in the same vein, but also hear positive things from people in Canada and outsiders as well.
- nibs 11y ago
  SRED is impossible to get, and has been for several years. We make novel manufacturing plant floor technology that is sold inside and outside of Canada and seen as unique IP. Getting SRED is harder than building the technology, so we just gave up. I would gladly trade places with an American running away from Trump, to escape Liberal^2 here in Ontario. Google "Ontario Sunshine List" if you want to see our California-esque problems with government misinvestment.
  - bryanlarsen 11y ago
    SRED is annoying, bureaucratic, slow, comes with painful audits that can delay payments over a year, breaking your company if you're relying on it, requires all your engineers to keep detailed log books, et cetera. But I've been in a few different startups in Canada, and they've all successfully received very significant SRED payments. Having the government pay a huge chunk of your engineering payroll has been a key part of the success of some of these companies.
    - deleted 11y ago
      [deleted]
- gavingmiller 11y ago
  I can speak a bit for western canada; Vancouver has seen many of the larger/top companies open offices: Microsoft, Facebook, Amazon, etc. so plenty of jobs to be had there. I live in Calgary and have seen many peers move to Vancouver for better job prospects. Re: SRED credits - I've been a part of the application process twice. Documentation can be a bit cumbersome, but not much more than 5 minutes summarizing the weeks work in a spreadsheet (for each employee), and tracking their hours spent on related tasks. Add in source control and the numerous artifacts that software devs come up with, means low amount of effort for high payout. And by high payout, I'm talking 1-2 devs salary in a 10 dev shop. We also hired a consulting company that specialized in SRED applications which saved us a ton of overhead. Cost 10-20% of payout, but was worth not having to deal with the application and/or any audits had they occurred.
  - Grishnakh 11y ago
    >I live in Calgary and have seen many peers move to Vancouver for better job prospects. Where do they live? Even a crack house in Vancouver costs $1M. Vancouver has probably some of the most expensive real estate in the entire world now.
    - gavingmiller 11y ago
      One friend is in a townhouse in North Vancouver. Rented for a while, then bought. Real-estate is stupid silly there. I've also heard talk of people moving to Victoria as an alternative.
miguelrochefort 11y ago
There are none. Moving to Canada from the USA lowers your quality of life by 50%.
- ybrah 11y ago
  What are the reasons that lead you to believe that? I have lived in both the US and Canada, I prefer Canada.
  - Grishnakh 11y ago
    I can imagine reasons a few right away that he would think that: * housing cost is generally higher in Canada, except maybe if you're comparing to the Bay Area in which case it's a wash * cars cost a LOT more in Canada (as does everything else) * tech salaries are a lot lower in Canada * taxes are generally higher in Canada (plus the huge VAT for sales)
    - Mikeb85 11y ago
      And you save a shitload of money on healthcare and university. Not to mention, money != quality of life. While I'm not going to argue Canada is the best place ever or that we don't have some issues, the quality of life is still pretty damn good. Certainly not 50% lower than the US or Silicon Valley...
      - miguelrochefort 11y ago
        What do you save on healthcare and university? University is like $3000/year here. I heard it's almost the same in the US if you go to a regular University. Healthcare is irrelevant is you're insured. And if you want access to care or a specialist in a reasonable delay, you have to got the private route, which means you actually pay twice. Considering that 50% of our taxes go to healthcare, I'm paying almost 25% of my income on healthcare here in Canada.
        ceratopisan 11y ago
deleted 11y ago
[deleted]
jordigh 11y ago
Québec actually gives a lot of tax breaks for tech businesses. There's a pretty lively startup scene in Mtl, perhaps for this reason: http://builtinmtl.com/ http://builtinmtl.com/ > not serious abot True Canadian confirmed.
robk 11y ago
And if you do need to leave at some point, good luck because you're going to have a huge cap gains tax bill for your startup equity!
- bryanlarsen 11y ago
  There's an $800,000 lifetime capital gains exemption for 'qualified small business corporations'. To qualify, basically you have to be Canadian-controlled for 2 years.

by n00b101 11y ago

altotrees 11y ago

My uncle is an engineer in Toronto, and often speaks positively of the startup scene in parts of Canada. I know Waterloo loses quite a few grads to the Bay Area and other major U.S. cities, but haven't some companies actually relocated to be closer to the scene there? I am thinking Pivotal Labs and Google off the top of my head. I am genuinely curious on your take, since you seem to have direct knowledge. I have seen many people say things in the same vein, but also hear positive things from people in Canada and outsiders as well.

nibs 11y ago
SRED is impossible to get, and has been for several years. We make novel manufacturing plant floor technology that is sold inside and outside of Canada and seen as unique IP. Getting SRED is harder than building the technology, so we just gave up. I would gladly trade places with an American running away from Trump, to escape Liberal^2 here in Ontario. Google "Ontario Sunshine List" if you want to see our California-esque problems with government misinvestment.
- bryanlarsen 11y ago
  SRED is annoying, bureaucratic, slow, comes with painful audits that can delay payments over a year, breaking your company if you're relying on it, requires all your engineers to keep detailed log books, et cetera. But I've been in a few different startups in Canada, and they've all successfully received very significant SRED payments. Having the government pay a huge chunk of your engineering payroll has been a key part of the success of some of these companies.
  - deleted 11y ago
    [deleted]
gavingmiller 11y ago
I can speak a bit for western canada; Vancouver has seen many of the larger/top companies open offices: Microsoft, Facebook, Amazon, etc. so plenty of jobs to be had there. I live in Calgary and have seen many peers move to Vancouver for better job prospects. Re: SRED credits - I've been a part of the application process twice. Documentation can be a bit cumbersome, but not much more than 5 minutes summarizing the weeks work in a spreadsheet (for each employee), and tracking their hours spent on related tasks. Add in source control and the numerous artifacts that software devs come up with, means low amount of effort for high payout. And by high payout, I'm talking 1-2 devs salary in a 10 dev shop. We also hired a consulting company that specialized in SRED applications which saved us a ton of overhead. Cost 10-20% of payout, but was worth not having to deal with the application and/or any audits had they occurred.
- Grishnakh 11y ago
  >I live in Calgary and have seen many peers move to Vancouver for better job prospects. Where do they live? Even a crack house in Vancouver costs $1M. Vancouver has probably some of the most expensive real estate in the entire world now.
  - gavingmiller 11y ago
    One friend is in a townhouse in North Vancouver. Rented for a while, then bought. Real-estate is stupid silly there. I've also heard talk of people moving to Victoria as an alternative.

miguelrochefort 11y ago

There are none. Moving to Canada from the USA lowers your quality of life by 50%.

ybrah 11y ago
What are the reasons that lead you to believe that? I have lived in both the US and Canada, I prefer Canada.
- Grishnakh 11y ago
  I can imagine reasons a few right away that he would think that: * housing cost is generally higher in Canada, except maybe if you're comparing to the Bay Area in which case it's a wash * cars cost a LOT more in Canada (as does everything else) * tech salaries are a lot lower in Canada * taxes are generally higher in Canada (plus the huge VAT for sales)
  - Mikeb85 11y ago
    And you save a shitload of money on healthcare and university. Not to mention, money != quality of life. While I'm not going to argue Canada is the best place ever or that we don't have some issues, the quality of life is still pretty damn good. Certainly not 50% lower than the US or Silicon Valley...
    - miguelrochefort 11y ago
      What do you save on healthcare and university? University is like $3000/year here. I heard it's almost the same in the US if you go to a regular University. Healthcare is irrelevant is you're insured. And if you want access to care or a specialist in a reasonable delay, you have to got the private route, which means you actually pay twice. Considering that 50% of our taxes go to healthcare, I'm paying almost 25% of my income on healthcare here in Canada.
      - ceratopisan 11y ago

deleted 11y ago

[deleted]

jordigh 11y ago

Québec actually gives a lot of tax breaks for tech businesses. There's a pretty lively startup scene in Mtl, perhaps for this reason: http://builtinmtl.com/ http://builtinmtl.com/ > not serious abot True Canadian confirmed.

robk 11y ago

And if you do need to leave at some point, good luck because you're going to have a huge cap gains tax bill for your startup equity!

bryanlarsen 11y ago
There's an $800,000 lifetime capital gains exemption for 'qualified small business corporations'. To qualify, basically you have to be Canadian-controlled for 2 years.