In late February, Microsoft opened four floors of new office space near the top of a 50-story glass tower in downtown Toronto, a block from Scotiabank Arena, home of the Maple Leafs and the Raptors.

Apple and Amazon were already in towers just down the street, and Google was about to open a new building around the corner. Meta, formerly Facebook, did not yet have an office downtown, but many Toronto start-ups complained that the social media company was driving tech salaries to Silicon Valley levels as it recruited top engineers across the city. During the pandemic, it was hiring anyone willing to work from home.

A few blocks north, new office space for another social media company: Pinterest. Stripe, an American payments company, was opening an office near City Hall, where Klarna, a Scandinavian payments company, had just announced its arrival 

As the tech industry continues to expand and communities all over the world compete for tech jobs outside Silicon Valley, many executives, investors and entrepreneurs are promoting warm climes like Austin and Miami as the next big tech hubs. But they are tiny tech communities compared with the new hub growing in the cool air along the shore of Lake Ontario.


Thanks to years of investment from local universities, government agencies and business leaders and Canada’s liberal immigration policies, Toronto is now the third-largest tech hub in North America. It is home to more tech workers than Chicago, Los Angeles, Seattle and Washington, D.C., trailing only New York and Silicon Valley, according to CBRE, a real estate company that tracks tech hiring.


Toronto’s tech work force is also growing at a faster clip than any hub in the United States. And unlike many cities, Toronto is likely to have the resources needed to sustain the trend. It is the fourth-largest city in North America — with about three million people in the city and more than six million in the metro area — behind only Mexico City, New York and Los Angeles, and its roots in technology run deep.

“Everyone points to Miami as the next tech hub because it offers low taxes. But it offers little else from a tech point of view,” Mike Volpi, a partner with the venture capital firm Index Ventures, said on a recent visit to Toronto. “You need anchor companies that can provide a transformative impact. Entrepreneurs come from these companies and start their own.”

These anchor companies — including the Canadian e-commerce company Shopify as well as the many American giants — have come to Toronto for the researchers and engineers who are already here. But they also believe the talent pool will grow.

Over the last year, Twitter hired more than 100 engineers in Toronto, tripling its Canadian work force. Household internet names like DoorDash, eBay and Pinterest built similar technology hubs in the city, as did rising artificial intelligence companies like Cerebras, Groq and Recursion Pharmaceuticals.

In Toronto, U.S.-based companies can also speed the arrival of new tech talent from other countries — a talent stream that has long been the lifeblood of the American tech industry. As the U.S. immigration system slowed, Canada introduced programs intended to bring skilled workers into a country that is already unusually diverse. Nearly 50 percent of Toronto’s residents were born outside the country.

“It is infinitely easier to bring that kind of talent into Canada,” said Heather Kirkby, chief people officer at Recursion, a company that applies A.I. to drug discovery. “A lot of companies have given up on immigration in the U.S. There are limits to what’s possible.”

In and around Toronto, local institutions are intent on feeding the tech ecosystem. Ontario recently passed a law that explicitly bars companies from enforcing noncompete clauses in employment contracts, encouraging employees to found their own start-ups. Backed by a $100 million donation from local business leaders, the University of Toronto is building a complex that will house A.I. and biotech companies.

Driven by the pandemic, immigration policy and other forces, many other giants have followed Google and Uber into Toronto or rapidly expanded their existing operations in and around the city. The big American companies came to Toronto in part because the cost of the talent was lower. 


When discussing the Toronto tech scene, locals inevitably point to Geoffrey Hinton, the University of Toronto professor whose research set in motion the recent boom in artificial intelligence.


In 2012, Dr. Hinton and two of his students published a breakthrough paper involving “neural networks,” a technology that could power everything from self-driving cars to digital assistants to chatbots. Soon, the world’s biggest companies were spending millions — sometimes tens of millions — to hire researchers who specialized in the technology.

Google paid $44 million for Dr. Hinton, born in Britain, and his two students, both born in the former Soviet Union. For a time, he worked at Google’s Silicon Valley headquarters. But he kept his professorship at the university, and in 2016 he opened a Google research lab in downtown Toronto.

The next year, he joined local entrepreneurs and researchers in founding the Vector Institute for Artificial Intelligence, which raised $130 million from government and industry meant to keep top researchers in Toronto, attract talent from other parts of the world and push other companies to open labs in the city.

The area was already a growing tech hub. As the financial center of Canada, Toronto was home to big banks. Microsoft had operated offices in the suburbs for years. So had computer chip companies like Intel and AMD. Google was running an engineering office near the University of Waterloo.

A month after Dr. Hinton announced his Google lab, Uber opened a self-driving car lab anchored by another University of Toronto professor: Raquel Urtasun, who had been courted by a who’s who of American autonomous vehicle companies, but she insisted on staying in Toronto.

Source: The New York Times