Canada has the third-largest tech talent pool in North America, trailing only the United States overall and California specifically. Toronto added more tech jobs than Silicon Valley in 2023, according to CBRE. Canadian AI research — pioneered by Geoffrey Hinton, Yoshua Bengio and Richard Sutton at the University of Toronto, Université de Montréal and the University of Alberta — is world-leading. Yet Canadian startups have historically struggled to scale, with the majority of successful companies acquired by US firms before reaching $1 billion in revenue. In 2025, that pattern is still visible, but it is beginning to change.
The Unicorn Club Expands
As of early 2025, Canada has approximately 25 venture-backed unicorns — private companies valued at over $1 billion — a significant increase from single digits five years ago. The most prominent is Shopify, the Ottawa-based e-commerce platform that went public in 2015 and has a market capitalisation exceeding $100 billion, making it Canada’s most valuable company. But the pipeline of companies below Shopify is deepening. Wealthsimple, the Toronto-based fintech platform, was valued at $5 billion in its most recent funding round and has expanded from robo-advisory into cryptocurrency trading, tax filing and peer-to-peer payments. PointClickCare, a Mississauga-based healthcare software company serving the senior care market, was valued at approximately $4 billion. ApplyBoard, a Kitchener-Waterloo edtech company that helps international students apply to universities, reached a $3.2 billion valuation.
In AI, Cohere — co-founded by Aidan Gomez, one of the authors of the seminal “Attention Is All You Need” paper that introduced the transformer architecture — has raised over $650 million and competes directly with OpenAI and Anthropic in the enterprise AI market. Waabi, a Toronto-based autonomous trucking startup founded by Raquel Urtasun, a pioneer in self-driving research, raised $200 million in 2024 from investors including Uber and Khosla Ventures. The distinguishing feature of Canada’s AI startups is their connection to the country’s research ecosystem: the Vector Institute in Toronto, Mila in Montreal and Amii in Edmonton collectively train hundreds of AI researchers annually, creating a talent pipeline that feeds both domestic startups and US tech giants.
Government Programmes: SR&ED, IRAP and the Innovation Imperative
Canada’s competitive advantage in attracting and retaining tech talent is partly structural: lower costs of living (compared with Silicon Valley), a publicly funded healthcare system that decouples health insurance from employment, and immigration policies that favour skilled workers through programmes like the Global Talent Stream, which can process work permits in as little as two weeks. But it is also reinforced by government programmes that directly subsidise innovation.
The Scientific Research and Experimental Development (SR&ED) tax credit programme is the single largest source of R&D funding in Canada, providing over $3 billion annually in refundable tax credits to companies conducting research. For startups, SR&ED can effectively cover 30-70% of qualifying R&D salaries — a significant offset to the higher labour costs of competing with US salaries. The Industrial Research Assistance Program (IRAP), administered by the National Research Council, provides direct grants and advisory services to technology companies, with a particular focus on commercialisation.
The Canadian government has also been active in direct investment. The Canada Pension Plan Investment Board (CPPIB), one of the world’s largest pension funds with over $600 billion in assets, has become a significant venture capital limited partner, allocating to both Canadian and international VC funds. The Business Development Bank of Canada (BDC) operates the largest VC programme in the country, with over $3 billion under management, and has been a cornerstone investor in multiple Canadian unicorns. The combination of public-sector support and a growing network of experienced angel investors and venture capitalists — many of whom are former Shopify, BlackBerry or Nortel employees — has created a startup ecosystem that, while still smaller than Silicon Valley’s, is mature enough to support companies from seed to scale.