
A new grad SDE makes 2x more in SF than Toronto after tax and COL - RustyTool
https://www.linkedin.com/pulse/canada-new-grad-offers-2017-2018-bo-peng/
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guiomie
The author says in the middle of the post:

" I believe this is the key in retaining young Canadian tech talent in Canada.
If an intern has a great experience at a Canadian tech company, they are more
likely to sacrifice the additional compensation in US to remain in Canada.
Sell them on the culture, not the money."

And then says:

" Tech CEOs in Canada often complain about the brain drain issue, but only a
few companies like Shopify and Wealthsimple are actually putting money where
their mouth is."

Really, if you wanna "Sell" them on something, it should be the money, sure
I'd go for culture if we are talking 10-15% salary difference, but if it's
50%, I'll find something that pays 50% more with a decent culture.

~~~
ttul
Vancouver tech CEO here. We Canadian CEOs would love to pay our staff more,
but our companies frankly suck compared to the powerhouse companies in the US.
We just aren’t profitable enough.

I think if you dig around, you will find that US tech companies are far better
funded and thus working on things that generate more upside - for everyone.

Another thing to consider is that there is a massive bull market going on. And
tech is at the frothy end of it. Those RSUs are great when stock is valuable
and companies are flush. When the market tanks, they won’t be so hot anymore.

~~~
piva00
How is the investors' risk mentality over there in Canada? I don't think the
problem is profitability but simply money: US startups/companies have easier
access to money as investors are willing to take more risks.

I see the same effect here in Europe, companies have to run more "tightly" and
carefully because money is not easy to come, not many will have a deep line of
credit if their companies' life depend on money, getting new rounds of
investment is expensive so you have to do with the money you have now and the
little revenue you are getting.

~~~
ttul
There is way less risk tolerance in Canada. But more crucially, government
policy does not reward risk taking so favorably, and a heavy presence of
government in the funding of tech through a generous tax credit crowds out
private investment.

All this being said, I think it’s even more significant that tech investment
and talent is concentrated on the Bay Area, and to a more corporate extent on
Seattle with Amazon and Microsoft.

Also, Canadian companies and employees whine too much. My attitude is: if you
think you’d be better off in the US, it’s easy to just move there. You will
earn more, and your company will be exposed to more funding AND much hotter
competition for talent. So you’d better have a really amazing idea.

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apercu
I have mixed feelings when I see these posts. There are a lot of places that
pay a lot less than SV, even comparable cities in the US. I don;t have an
advanced degree, heck, I don't even have a STEM degree, but when I left my
last Toronto job nearly 4 years ago my compensation was around ~200k.

Does that mean that if I was willing to a) work for someone and b) move to SV
that I would be making 300-400k per year? Maybe (I'm a US citizen and Canadian
permanent resident so I have that option).

I guess my issue is less of one comparing west coat development compensation
to Ontario compensation and say that all over North America there is an issue
of stagnant wages for everyone except the top financial/business minds and the
above average tech workers. Canada lags a little behind SV in employee equity
and feels like it still has a bit of a British class thing going where there
is the elite (capital) and the commoners (labour). Except that it's purely
financial (mostly) these days. Nowhere near as bad as, say, the Bahamas.

I see a lot of comments here that I agree with (moderate talent commanding
wages that maybe they aren't really worth) but at the senior end, yea, it
feels a little different in Canada - if you don't go in to management (I did,
and hated it) you're likely to be capped (in most industries) at about $120k.
That seems a little ridiculous in a time of record breaking corporate profits
and startup valuations.

All that said, I spent a lot of time early in my career in Mountain View, Palo
Alto, etc.. and while I appreciate a lot of things about Nor Cal there is no
way I would move there. Heck, it's unlikely I would ever move back to the US.
Canada is simply more in line with my values.

~~~
apercu
> British class thing going where there is the elite (capital) and the
> commoners (labour). Except that it's purely financial (mostly) these days.
> Nowhere near as bad as, say, the Bahamas.

I meant to type "Bermuda" not "Bahamas"

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g9yuayon
Assuming employees have the same productivity in two different locations,
shouldn't a company even pay more to the employees in the location that has
lower operational cost, because the company will end up having a higher margin
anyway? Instead, what I often see is that companies use "lower living
cost"(which I assume is correlated with lower operational cost) as a
justification of paying an employee less.

Yeah yeah, I understand that it eventually boils down to supply and demand of
talent, but just saying...

~~~
hkjayakumar
Well, companies also prefer higher margins to lower margin i.e. if they can
get away with paying lesser compensation, then that's exactly what they will
do.

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andrew_wc_brown
Its quite frustrating as a Canadian web-developer. There are plenty of remote
jobs that I would qualify skill and experience wise in the US that are for
120K USD. But they won't hire remote Canadians because its a hassle for some
reason.

There are few Canadian companies that are remoting and generally they cap out
at 70K. There are higher paying remoting jobs in Canada but to get them you
have to do in-person networking to secure them.

I'm from Thunder Bay originally and honestly would prefer to live someone
cheap but I'm forced back into the GTA because people want to have their head
over your shoulder.

The only way to get about the 70K cap was to run my own firm, which brought in
lots of money but was quite the chore to keep stable.

~~~
pmiller2
The flip side of this is an experience I had a while ago interviewing with a
Canadian company for a remote position. Since I expected it to be an issue, I
was up front with the interviewer that I needed a minimum of $X to pay my
bills in the Bay Area and that I wasn't interested in moving. They were not
willing to proceed, and told me that was the reason. I appreciated their
candor, but it really turned me (as an American) off of Canadian companies.

~~~
thirdsun
Isn't that kind of expected? I assume very few companies can provide the
salary that is needed to support living in the bay area and I guess most of
them are probably located in the very same region, the bay area.

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Scoundreller
If you can work as an incorporated contractor, Canadian taxes can be quite low
when you sprinkle the income across your family.

* The government is starting to catch on and might put an end to paying out dividends to non-working family members.

~~~
cheez
Only if the dividends are above 400K or something?

~~~
Scoundreller
I haven't been following the day-to-day news, but if that's what it is... the
income splitting benefit is still massive.

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elchief
Comparing salaries across borders based on that day's exchange rate is dumb.
It's swung between 70 cents and parity in the last decade

~~~
s0rce
Unless your plan is to save most of your income and move back to Canada after
working in the US the amount you make in CAD isn't really relevant at all, the
purchasing power of your income net taxes and rent is most relevant.

Also, my experience is that the expenses don't line up either. I could be
wrong but having moved from Toronto to Chicago and now the SF Bay area, other
than rent in SF area, living in Canada is often more expensive, specifically:
gas, food, travel (partly due to weak CAD and expensive flights), not
adjusting for the currency since you are paid in CAD and also paid less.

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linguist_1
I had a Canadian colleague of mine describe it as the "1812 tax", basically
the "tax" Canada pays for losing the 1812 war and failing to become a proper
US state. Everything is more expensive, and the second grade currency doesn't
shield them from price variations since the country is too small not to import
most goods from the US. Not only that, but a single tariff can wipe out a
whole industry, as we saw earlier with the bailout from Airbus.

The situation is made worse with a out of control immigration, with 10x the
number of migrants as compared to the United States, that all pretty much
target urban areas in BC and Toronto. From what he told me, for IT folks it's
mostly guys that wouldn't be good enough for a work visa here in the US.

This, with all the best university grads getting poached by tech companies
here in the valley creates a big surplus of average/low skilled tech workers.
I mean, it's fine. It's just that these guys aren't playing in the 120-200k
range for top dev talent, more like in the 50k range for average workers.

~~~
kingofpandora
I think your friend isn't the biggest brain to have drained out of Canada
considering the inaccuracies in your post. Hint if Canada "lost the war of
1812", why isn't it a"proper US state"? Did Canada fight a war to join the US
in your mind?

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saagarjha
> This data set is not big enough to draw broad conclusions.

This, very much. You have around 100-120 responses, and for many groups
(gender, company) you had <20 people responding. You really can't draw any
conclusions from this, especially because a lot of the "results" differed by
very little.

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geodel
Well this is case with every country which is not US. Software salaries are
much higher in US even after considering all different parameters e.g. PPP,
currency exchange, housing cost, health insurance and so on.

~~~
bartedinburgh
Yeah, most of Europe is barely on par with Canada if not worse.

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sgberlin
I'm sure it is the same with any city in Germany compared to Zurich.

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carlmr
Yep

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namlem
Aside from the weather, Toronto is a much nicer city than SF. Also, the COL
analysis fails to account for the value of public services, which is
presumably greater in Canada. Probably not nearly enough to make up the
difference, but it's something to consider.

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HanayamaTriplet
I find it an odd choice to single out SF for the title (currently "A new grad
SDE makes 2x more in SF than Toronto after tax and COL"), given that the data
show that Seattle pay after tax and COL is almost 2.4x Toronto.

~~~
tensor
That's not true, total compensation in the article is ~1.7 more in SF than
Toronto, but that includes stock options which are not actually the same as
cash. The 2x figure comes from an analysis that factors in living expenses and
refers to the amount of money you get left over for savings and similar
things. Also, that comparison oddly compares living in a frat-like house in SF
to having your own one bedroom apartment in Toronto.

~~~
curmudgeon9
Not to mention the salary difference will get soaked up by real estate
differences the moment you decide to buy a house.

Not that Toronto real estate is cheap either. I think Google Waterloo is a
great value: high CAD salary but low real estate prices (around half of
Toronto).

The optimal play (if you don't want to permanently live in the US) is to go to
SF, continue living like a student and sock away your cash while building your
reputation, then move back to Canada and work remote with a grandfathered USD
salary.

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senatorobama
Wow. Anyone who lives in Canada must get out quick. Time to go where the
salaries are higher and not a backwater.

