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In the Trump era, are Canadian cities poised for success?

Thousands of people showing their patriotism jam into the area around Canada Place waterfront convention centre to celebrate Canada Day on July 1, 2016 in Vancouver, British Columbia, Canada.
George Rose | Getty Images
Thousands of people showing their patriotism jam into the area around Canada Place waterfront convention centre to celebrate Canada Day on July 1, 2016 in Vancouver, British Columbia, Canada.

The ads and billboards began going up before the election, and haven't stopped. Sortable, an ad platform based in Waterloo, Ontario, started running an ad in March showing a picture of President Trump with the words "Feeling Homesick?," part of an attempt to bring Canadian tech workers in the U.S. back home.

A company called True North launched in November 2016 to help tech workers, especially those on visas nervous about recent anti-immigrant rhetoric, relocate from Silicon Valley to Vancouver. In May, Toronto Life magazine ran a feature about eight Americans who relocated to Canada, including a Bay Area tech worker who found both opportunity and a better work-life balance, and provincial leaders in Ontario are launching a social-media outreach campaign targeting tech execs.

In the age of Trump, Canada's tech scene sees an unprecedented opportunity. Sure, it's still a fraction of the size of the industry in the U.S.—while venture capital investments in Canadian companies nearly hit an all-time high of $1.7 billion in 2016, it's still tiny compared to the $69 billion invested in U.S. companies (figures are in U.S. dollars unless otherwise noted).

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But big names, such as Shopify and Hootsuite, continue to grow, Toronto is aggressively pursuing investments in artificial intelligence, and the Canadian government announced in June it would streamline the visa process so international tech workers can get a work permit in just two weeks (the process in the U.S. takes months).

But in addition to a burgeoning tech scene and more open immigration policy, our northern neighbor has another big economic advantage in the long run: a much more focused, pro-urban policy on multiple levels of government. Toronto, Montreal, and Vancouver each have their own issues—especially affordability and an "overheating" housing market—but they're all growing, while the public and private sectors are making big investments in urban projects across the country. At a critical time, when populations and jobs are more concentrated than ever in urban areas, the contrasts between the Trudeau government and Trump administration on urban issues is marked.

"We don't separate citymaking from economic development," says Brent Toderian, Vancouver's former chief city planner and now international consultant who helped make his city of Vancouver a model of progressive urbanism. "Smart citymaking is the bedrock of economic development. We get a lot of attention in Canada for our cities' livability, but livability isn't the only thing. Affordable housing, sustainability, healthy urban design, public transport, climate change: these are critical to the success of cities, and cities are critical to the success of Canada."

Toderian believes that many Americans see Canadian cities as different because they appear to be more socialist, or less capitalist. He says that's a myth that misunderstands the history of the two nations' urban development. Canadian cities, he says, quoting Toronto's former Director of Urban Design Ken Greenberg, are "more American than American cities," because they're far less dependent on massive subsidies for suburban sprawl, or government funding for highways.

Greenberg, now a leading urbanist and consultant, says Canadian cities, on an upward trajectory for decades, are really starting to achieve their potential. Recent job statistics suggest the same: According to recent research from urbanist Richard Florida, between 2001 and 2016, more Canadian metros saw job growth, while more U.S. metros saw job loss.

"It's due to a broad acknowledgement that we're an urban country," Greenberg says. "Eighty percent of us live in big city regions, and have more in common with each other as opposed to the heartlands in the provinces. That's significant. We're not experiencing that kind of deeply unsettling constant culture war that tends to be happening in the U.S., or the anti-urban backlash."

He was shocked when Trump advisor Stephen Miller used the word "cosmopolitan" as an insult during an exchange with a reporter last week over immigration. In Canada, Greenberg says, that would typically be used as a compliment.

A maturing tech scene

Relocation to Canada has been a focus of many recent articles about the country's growing tech scene. Vancouver is considered an obvious choice due to its high quality of life, its relative proximity to Silicon Valley, and its lower costs, due in part to a favorable exchange rate (a recent CBRE study found that Vancouver is the cheapest of 50 U.S. and Canadian markets to start a tech company, less than half the cost of San Francisco). And, with roughly 350,000 Canadians already working in Silicon Valley, repatriation alone could bring substantial growth.

But focusing on temporary relocations and quick moves misses some of the fundamental shifts in the Canadian tech scene, especially homegrown development. Karen Greve Young is executive vice president of partnerships and corporate development at the MaRS Discovery District, a Toronto startup hub that opened in 2005, and has been at the center of the region's push to become a world-recognized tech center. Set within four towers near the University of Toronto, MaRS hosts more than 6,000 workers, including offices for Facebook, Airbnb, Etsy, and Paypal, as well as 200 Canadian startups.

"Since moving here in 2008, I have felt the momentum," she says. "People are really considering this the right place to found tech- and science-based companies. This is a lot more than the Trump effect."

Since Young arrived, Johnson & Johnson opened their JLABS accelerator at MaRS and Google established a major presence in Toronto and Waterloo. Earlier this year, Invest Ottawa, a city-funded nonprofit, began recruiting tech talent in the U.S. to fill some of the thousands of jobs expected to come out of the city's growing tech scene. Interest has been "off the charts," according to an Invest Ottawa rep who spoke to the Guardian, with more than 3 million people interacting with the ads.

A streetcar on the intersection of King Street and University Street in Toronto, Ontario.
Getty Images
A streetcar on the intersection of King Street and University Street in Toronto, Ontario.

There's also a focus on diversity in Canadian tech: 54 percent of MaRS startups have a non-Canadian founder, and 30 percent have a female founder. According to Young, this commitment to diversity in leadership has been bolstered by the Trudeau administration's focus on immigration.

"The Canadian government is taking a reverse approach to the U.S. government when it comes to talent and immigrants," says Michael Tippett, one of the founders of True North. "We see this as an asset, not a liability. It's a way to grow."

For Tippett, economic diversity isn't just about employees. After the administration of Conservative Prime Minister Stephen Harper, which continued the traditional focus on resources and mining, the new administration sees technology as a true growth industry. In British Columbia, the tech sector now makes up a larger part of the GDP than the resource sector.

A warm welcome won't be nearly enough to overcome some of the structural issues Young and others see in the Canadian tech scene. Salaries are lower than in the U.S., and traditionally, many of the companies here are smaller or early-stage startups. The industry is still relatively young, so there aren't as many Canadian-born tech firms with an international presence.

"We need more examples of companies that grow and scale from Canadian headquarters," Young says. "Canada has never had a gap with starting companies—it's been about scaling companies."

But a big selling point for Young and others is the quality of life in Canada's urban centers. MaRS, for instance, is located near both a streetcar and subway stop in the heart of the city, around neighborhoods cheaper than comparable areas in U.S. tech centers such as Boston, New York, and San Francisco.

Different schools of urbanism

The contrast between how the current Canadian and American governments see cities couldn't be more stark. While the Trump administration still hasn't passed a budget through Congress, all signs point to drastic cuts in transportation fundingand public and affordable housing, and a shift toward private sources of capital for long-overdue infrastructure projects.

"When I work in American cities, I've noticed many are starting to do the right things," says Toderian. "But they're having a hard time stopping doing the wrong things, which is often harder."

Canadian cities are far from perfect, and they haven't solved the serious issues of sustainability, affordability, and equality. But at least the national government is helping—or getting out of the way. The Trudeau administration proposed a CA$11.2 billion dollar effort (US$8.9 billion) to fund more affordable housing after commissioning a national study to examine the issue. Despite the fact that more than 70 percent of the lowest-income householdsin the United States face severe housing burdens, according to Harvard researchers, the Trump administration proposed a $6 billion cut to the agency that funds public housing and rental assistance programs. During the era of Conservative Prime Minister Harper and President Obama, the U.S. may have espoused more progressive urban policies. But that situation has flipped.

"All the initiatives to help cities in the U.S. are under attack," says Greenberg, who works for clients in both the U.S. and Canada, "while the Trudeau government and provincial governments are going the other way. It's a factor in the unprecedented growth spurt we're seeing in Toronto, and to some respects, Vancouver. It's an explosion of people wanting to be here. The biggest problems we've had is dealing with our success."

Geoff Cape, CEO of Evergreen, an urban innovation hub in Canada, says the Trudeau government has embraced an innovation agenda. A CA$300 million Smart City challenge announced last summer seeks to be a catalyst to inspire a new generation of urban tech and infrastructure development, while the country's Innovation Superclusters Initiative will invest CA$750 million over the next five years in innovation centers.

"These sorts of moves are part of a larger narrative," Cape says. "The Smart Cities Challenge is a provocation, a way to provoke innovative private sector investment to set up Canada to be a leader in global urban development."

Like urban areas around the world, Canadian cities are experiencing big investments and new developments. Toronto, which has seen its population grow 6.2 percent since 2011, has become a focus of real estate development. The city's CA$50 billion Big Move initiative, including a sleek new express train that runs from downtown to the airport, seeks to create a more connected regional transport system.

The CA$25 million Bentway development will create a new park underneath a highway, the city's stab at Highline-style park building, the recently finished CityPlace neighborhood has revitalized a section of downtown, and the revitalization of Regent Park, a public housing complex, was seen as an exemplary example of neighborhood redevelopment. And the expansion is poised to continue: 10 massive high-rises are planned in what some are calling the "Manhattanization" of the city's skyline, including a 92-story Frank Gehry-designed skyscraper in King West that would be the city's tallest. A new series of waterfront developments, including a high-tech district called Quayside, is in the works.

"Doing the urban agenda right hits all the big subjects, including sustainability and innovation," says Cape. "It's the omnipresent theme globally. How do we make cities work?"

Historically, Canadian urbanism has differed in some key ways from the United States. Provincial governments have much more control over city government than states do in the U.S., but have avoided the kinds of pre-emption fights that have been roiling blue cities in red states. Canada fell under the sway of Robert Moses-like central planning and highway construction in the '60s and '70s, but Canadians never abandoned cities in the same numbers as Americans did via white flight and suburbanization. Don't forget, Jane Jacobs lived, worked, and battled the development of highways in Toronto, too.

"Our cities never fell as far back as American cities did," says Toderian. "We never gave up on our cities and never gave up on our downtowns. We did do damage with bad planning ideas, and didn't fully avoid the mistakes of the Robert Moses era, but we did better and came to our senses sooner."

According to David Crombie, a former Toronto mayor, regional governments support cities. Canada has always paid attention to an "ecosystem approach" to city development.

Greenberg is careful to not exaggerate the positive too much; there are arguments about funding and NIMBYism and solving inequality (the election of Rob Ford, Toronto's rambunctious conservative former mayor, can be seen as analogous to Trump, he says, in that it was a "protest vote by those who felt left behind"). But he believes that a culture focused on embracing universal access and multiculturalism is more poised to welcome entrepreneurship and solve some of the pressing problems posed by urbanism, including infrastructure and climate readiness.

"The messaging the U.S. is sending is horrible, while the message we're sending, which we don't always live up to 100 percent, is going in a very different direction," says Greenberg.