On Canada’s brain drain problem and why it keeps getting harder to ignore.
The conversation keeps coming up. A founder I met six months ago messages to say they’re relocating to San Francisco. An engineer who was a key hire at a Toronto company moves to New York for a role that pays twice as much. A researcher who built something genuinely interesting at a Canadian university gets picked up by a US lab and that’s the last you hear of them in this ecosystem.
It’s not a new problem. Canada has been losing talent to the US for decades. But it feels different lately. Faster. More visible. And in tech specifically, the gap between what the best people can earn here versus there has widened to a point that’s hard to talk around. A 2023 report from Toronto Metropolitan University found that US tech workers earn 46% more than their Canadian counterparts after adjusting for exchange rates and cost of living. A Toronto engineer averages around $106,000. A counterpart in San Francisco clears over $260,000.
The graduating class numbers are even starker. 66% of Canadian software engineering graduates end up working in the United States. At Waterloo, 71% of the 2022 software engineering class planned to start their careers south of the border. Nearly two in three Canadian graduate researchers say they’re considering leaving upon finishing their degrees. Canada spends close to $250 million annually in federal scholarships on young researchers who may not stay long enough to contribute back to the ecosystem that trained them.
The reasons aren’t complicated. US companies pay more, the capital environment is deeper, and the exits are bigger. If you’re ambitious and early in your career, the rational case for going south is genuinely strong. Earlier this year, Canada’s leading AI institutes warned the federal government that “an unprecedented global war for AI talent is underway” - and that Canada was at serious risk of losing the researchers it had spent years building a reputation to attract.
What’s harder to quantify is what leaves with the people. It’s not just headcount. When a strong founder relocates, they take their next company with them. When a research team gets absorbed into a US lab, their next breakthroughs happen somewhere else. The compounding effect of talent staying in a place is real - mentorship, referrals, the informal knowledge that flows through a dense network - and when people leave, that compounding stops.
Canada got a version of this right with immigration. The country’s ability to attract global talent is a genuine strength, and for a while it looked like that inflow might offset some of the outflow. To an extent it has. But attracting talent and retaining it are different problems. Someone who moves to Toronto for a research role and then gets recruited to Seattle two years later isn’t a net gain for the ecosystem.
Part of the answer is exits. The single most effective thing for retaining talent is a generation of founders who built something, sold it, made money, and stayed. Every meaningful exit creates a new investor, a new mentor, a new repeat founder who has a reason to be here. Canada has had some of those moments. It needs more of them, and it needs the people they create to reinvest locally rather than quietly move their base of operations to Miami.