Chart of the Month – February 2019

Jobs in The New Canadian Economy

 

Much has been written about the demise of Canada’s economy, the collapse of industry and the job losses on the mines and in the oilfields. Much less is written about the tremendous growth in high paying high-tech industries like computer systems design, healthcare and the hospitality industry.

The chart above graphically illustrates that in terms of jobs lost and jobs gained. Canada is indeed winning in the high paying knowledge industries and declining in the traditional extractive industries and agriculture. Some of this is due to automation in those industries. In the technology field Toronto, Ottawa and Vancouver are leading the charge as Canada competes with Silicon Valley for highly qualified computer technicians and engineers. Early leadership in artificial intelligence and fintech is turning Toronto into an emerging global centre of influence and was the fastest-growing tech-jobs market in 2017, according to CBRE’s annual survey. The city saw 28,900 tech jobs created, 14 percent more than in 2016, for a total of more than 241,000 workers, up 52 percent over the past five years. The centre of this development is the MaRs Ecosystem. In their own words MaRs is “…located in the heart of Canada’s largest and the world’s most diverse city, MaRS is uniquely placed to lead change. We bring together educators, researchers, social scientists, entrepreneurs and business experts under one roof. Founded by civic leaders, we have a mission that is equal parts public and private — an entrepreneurial venture designed to bridge the gap between what people need and what governments can provide.”. In addition to MaRs are the Universities of Toronto, York, Waterloo and Ottawa, which have strong incubation programs and are turning out record numbers of technicians and engineers. CBRE said that Canadian markets were among the best-value markets, due in part to the strong US dollar, with Toronto, Vancouver, Montreal, and Ottawa offering “high-quality talent at relatively low cost.” In addition, the Federal Government has made immigration very easy for well qualified individuals who can often get work visas in two weeks.

All this is good news for the Canadian economy but what does it do for our investment portfolios? The technology industry is young and as yet has not produced many companies that have reached the scale that makes them investible to our clients. We expect this to change in the not too distant future. Then we shall see a selection of world-class technology companies competing on the world stage and providing Canadian investors with solid results and diversity for our portfolios.