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by alephnerd·2mo ago·view on hn ↗
> then will act surprised as Canada's tech sector finds it even harder to create any consumer facing businesses...

That's not why an indigenous Canadian tech industry is non-existent.

Heck, China, Israel, India, South Korea, and Taiwan all have larger tech industries than Canada and have much stricter internet speech requirements (and in Israel and Taiwan's case are much smaller than Canada population wise).

Canadian tech is nonexistent because every Canadian pension fund, family office, and bank prefers to invest in American equities over Canadian equities.

12 comments
> Heck, China, Israel, India, South Korea, and Taiwan all have larger tech industries than Canada and have much stricter internet speech requirements (and in Israel and Taiwan's case are much smaller than Canada population wise).

That's actually not true for most of those countries. None of those countries other than maybe China have laws requiring encryption backdoors.

Suspicionless bulk metadata retention is also illegal in the EU, and no such law existing in many of those other democracies you listed.

China and Israel have pretty strict requirements. Korea was recently on the news for something some might say is an "internet speech requirement" (https://news.ycombinator.com/item?id=48406198)
A lot of the Indian tech industry is really just the tech industry from other countries being outsourced to there.
Sure foreign players do play a role, yet it still has the 4th largest VC dealflow [0] in the world ($9.3B) at 2x the size of Canada's entire market which highlights a significantly larger market. And unlike Canadian startups, most Indian startups IPO domestically [1] thus building a self-sustaining capital market

[0] - https://dealroom.co/guides/global

[1] - https://internationalbanker.com/finance/india-is-undergoing-...

I didn't realize the VC market was that strong there. A lot of the stuff I read on here had previously pointed to it being a tough startup market.
Tough as in a lot of competition. A lot of market segments dominated by Chinese manufactures have a relentless stream of Indian Startups nipping at their heels, is what I understand.
Not everything though. There are huge unicorns that serve the Indian market in India.
Describes Canada too!
One thing I have been thinking about is digital tariffs.

The US is perfectly willing to slam billions into ventures that lose money for years. EU for example doesn’t work that way. Consequence: US can develop faster, unconstrained by profitability, and capture the entire market before EU. This seems as US being more “innovative”, but realistically they are just running a perhaps similar engine way hotter at the cost of American QoL being way worse for the less fortunate. Similar thing can be said with Chinas subsidies on electric vehicles potentially flooding the EU with cheaper alternatives.

America is our ally, so we let this happen. For the most part this has served in this case EU and perhaps Canada well, albeit at the mercy of the US tech sector. Perhaps we shouldn’t anymore though, and consider tariffing American services to protect and incentivize local, sustainable alternatives. Meta, microsoft, etc. are clearly starting to rent seek now that they have us by the balls, I say fuck em?

I’m no expert in economics so I bet there are great arguments against this, lets see.

>at the cost of American QoL being way worse for the less fortunate

That's a common claim, not sure it's true

https://ourworldindata.org/grapher/poverty-share-on-less-tha...

https://xcancel.com/CPopeHC/status/2065144840002670921

First issue is you are conflating investment and subsidies.
Quote the part where I state they are the same
The premise seems wrong here. As someone who worked my whole career in Canadian tech I assure you it exists.
The two big Canadian names in tech are Shopify and MindGeek (AKA Pornhub's parent company).
Because US has far better opportunities and more money.

My personal experience in doing business in Canada: each industry is monopolized by two or three companies, you need to get their “blessing” before you can do anything in that sector. Government contracts aren’t much, but even with that, it’s nepotism based, you will get a contract knowing someone who will indirectly get benefits from you, for example you will hire people they know, so kinda laundering the money. Lengthy regulations, you might wait months to get an SFOC for example (in drones, where you might need a special flight operation certificate) to do a simple operation, only to repeat that for another test. Securing clients, a combination of low on money and usually clients prefer US based companies, your best bet is securing a big client that will be your backbone, so back to point one where you need a blessing from a big company. And Im talking here about a business where there’s an opportunity to scale up, so food truck business and the local plumbing work aren’t part of that.

Yep, ever the same since the Hudsons Bay Company and the Northwest Company ran the whole place.

Now it's just the Westons and Rogers and Bell instead.

Some years ago when I first moved to my farm out here in the Hamilton area there was a meeting about zoning bylaws, as the city was finally -- after 20 years -- harmonizing the rural zoning laws after the municipal amalgamation that Mike Harris had forced on them back in the late 90s.

We're on an A1 zoned farm lot, and I have a small hobby vineyard here, and although I don't have enough acreage myself to run a winery business, I was curious to see what the zoning around that was. But then I noticed that they had language in the zoning laws that explicitly restricted all winery / commercial vineyard operations to be only in the east of the city (Winona, east of Stoney Creek). I was baffled why they would restrict like that, actually have laws preventing you from running a business up here.

So I went to the zoning presentations / meetings and tried to talk to the city staff there about it. She looked at me completely incredulously like I was from Mars.

"That's because that's where the wineries are. Maybe we'd allow cider operations up there, but not wine."

Why on earth would you go out of your way to do that? If someone wants to try it, why stop them? She just took it for granted that their job was to enshrine the existing state of things in a formal law.

It's for some reason just the default Canadian mindset to create an environment to often favour the already entrenched, and to explicitly put gates in front of any upstarts.

It's not a partisan thing. It's not liberal vs conservative vs whatever. It's just some weird mindset that wants to see credentials for everything, and the best credential you can have is your proximity to already existing power privilege or wealth.

Best explanation I have is this is an outcropping of the colonial mindset.

> It's not a partisan thing. It's not liberal vs conservative vs whatever. It's just some weird mindset that wants to see credentials for everything, and the best credential you can have is your proximity to already existing power privilege or wealth.

Bingo, you nailed it! I like how you described it in few words as I have been trying to articulate that for a while, as some people I know they blame it in liberal or whatever, but the reality it has nothing to do with that, it’s just the overall mindset in here. A lot of people here like to hate on Americans or at least have an anti-American identity somehow, but the reality is, Americans are miles better when it comes to practicality of work, diversity of thoughts, and openness to new opportunities. My friend who owns a big drone company in the US told me before how he started the company years ago, it sounds like a movie where all you needed is some determination only, he had zero money and zero connections zero VC investors, and started it after being rejected on something related. Meanwhile it’s almost impossible to achieve that in Canada the same way how he started it. Add to that, Canadian economy is mostly services and real-estate, so anything outside of these two must be directly or indirectly sponsored by one of the companies you mentioned. It’s funny because while doing my business I ended up either that I have to be “blessed” by rogers or bell to actually get going :)

To be fair, Americans have their own equally strong dysfunctions, and there's a lot of variance from state to state, industry to industry.

And the education system in the US is way less egalitarian and if you're talking about access to investment, etc. or jobs, proximity to an "Ivy League" school is super important blah blah blah.

I mean, it's a dangerous game to be playing stereotypes generally. But there's structurally economic factors at work.

The wild thing is that Canada is absolutely not alone in having this sort of insanely restrictive land use regulatory environment, as you hear similar stories from the UK (see: Clarkson's Farm) and even the USA (see: restrictive SF zoning). So the question for me is how the USA and other countries with similar regulatory regimes do well in spite of these things.

With the USA a possible answer is that the scale and diversity of the market adds more competition (ie. low regulatory areas) that Canada doesn't have.

Or it's possible that all these countries have awful zoning but while this is awful the factors that make tech a success in the USA are unrelated and dominate this (eg. unmatched wealth and financing)

It's true having 10x the population just makes so many things 10x better.

Some things also get 10x worse though :-)

> Why on earth would you go out of your way to do that? If someone wants to try it, why stop them? She just took it for granted that their job was to enshrine the existing state of things in a formal law.

This is exactly the Canadian experience: restrictions without thought.

> It's for some reason just the default Canadian mindset to create an environment to often favour the already entrenched, and to explicitly put gates in front of any upstarts.

"Peace, order, and good government" is easiest to achieve when things basically don't change.

> Canadian tech is nonexistent because every Canadian pension fund, family office, and bank prefers to invest in American equities over Canadian equities.

I was told that we should never invest pension fund on local, because you salary is basically based on local industry. One need diversified investment.

Not sure how true this is, but that's what I have been listening for years.

(disclaimer: not canandian, not american

> Canadian tech is nonexistent because every Canadian pension fund, family office, and bank prefers to invest in American equities over Canadian equities.

Off-topic but I suspect it's also that oil and gas and real estate are the "easy" money in Canada and that's where investment goes. Canadian investors are risk adverse because they can be. That and there's a colonial-descended cultural bias towards credentials and established players.

But yeah, I'm furiously writing code for a product living off my savings, and would love to get investment to build a startup off of it, but every time I sniff around the Canadian "investor" scene it becomes clear to me that they'd have no time for somebody like me.

I have a (admittedly unevidenced) hypothesis that the US took off from other economies after ‘08 because real estate became a spectacularly shit investment overnight and investors had to invest in productive things for returns. Investors in Canada kept passing the same pieces of land between each other for no benefit to society. My pipe dream is that Canada grows the balls to annhilate property values
They kept selling residential property to foreign money launderers. In the US that activity is confined to major metros where it impacts the more distributed population density less significantly.
Don't worry, we have our own domestic money launderers as well. And whenever the gov't tries to close loopholes they riot. (Also half the gov't MPs are landlords, so ...)
> I have a (admittedly unevidenced) hypothesis that the US took off from other economies after ‘08 because real estate became a spectacularly shit investment overnight and investors had to invest in productive things for returns.

There was also the Z/VLIRP to smooth things along.

On the other hand, poetry rhymes, and one could similarly draw a line from now-increasing interest rates to the tech layoffs, forced RTO (to help improve on some spreadsheet the property value they want to leverage) and general corporate-IT sector malaise.

I think the point is that when zero % interest rates came along in 2008, Canadian investors piled their money into real estate -- because we hadn't suffered the same crash as the US and it was still a reasonable investment that was humming along at at least 6-7% a year (and often way way higher) in gains.

But in the US that was a "shit investment overnight" and it took many years to recover. So if you were looking for a place to park money, you maybe put it into more productive sectors, or tech, etc.

(Another factor is that for a few years around 2011, 2012 the Canadian dollar somehow hit parity with the USD. As a result many Canadians piled in hardcore into the US market and saw big gains from that when USD/CAD went back to its normal ratio)

Even if real estate were to implode, Canada has a pretty much permanent sickness on account of being a "rip n' ship" resource exporter over everything else. Since confederation.

It lends itself to a rentier capitalist model, and to oligarchies, and to a stagnant conservative investment class that just wants to coast off their proximity to resources.

Real estate coasting is arguably even worse, but not by much.

Notably the United States is actually trying to make this worse with their tariffs on us. Alberta oil and gas is tariff free while our value added manufacturing sectors are highly tariffed.

It makes no sense to try to kill Quebec's aluminum sector since it's the most logical place to smelt aluminum on the whole continent, but they're trying to, anyways.

American here, it makes me want to pull my hair out the way Trump confuses tariffs on inputs with tariffs on things we make here in the States. We have a ton of big (as in: employing tons of well-paid people) industries here that need to buy metals and comparatively few people employed in mining and smelting.

A 5-year-old could correctly answer that we should then NOT try to make metals cost more because that screws our big industries while helping almost no Americans. But somehow our tariff policy is set by people with less sense than a small child.

> it's also that oil and gas and real estate are the "easy" money in Canada and that's where investment goes

Partially. The money made in ONG and Construction is then re-invested in American equities. And even provincial pension like Ontario Teachers and La Caisse funds prefer investing in American equities instead because their only incentive is pension solvency.

The issue is Canada is simply a tiny country with an extremely loose confederation in a world that is returning to a "winner takes all" mindset dependent on hard unification.

More tactically, using a Yozma-style approach to subsidize Canadian VC would help sow the seeds for a truly self sustaining ecosystem.

> it becomes clear to me that they'd have no time for somebody like me

Because they don't and never will. Anyone who has potential gets frustrated and leaves (ofc I've poached a couple as well).

>> But yeah, I'm furiously writing code for a product living off my savings,

Probably not relevant to thus thread, and hopefully redundant to you, but writing the code is the easy part.

If you have not already done so figure out your market and start marketing to them. Get deposits, build a mailing list of interested parties, build a presence where your customers hang out.

Marketing is the hard part. Get that done first before writing code. Most ideas fail not because of bad product but because there's no market, it's too hard to reach the market, or you're solving a problem no one will spend money on.

Before depleting all your savings, learn from all the threads in the "ask" section. Code counts for nothing without hod marketing. And marketing is the hard part, the code part is easy.

As an aside, the startup which has a market and marketing sorted out is a lot more attractive to investors.

Yes, all good advice. In reality what I need is probably a cofounder.
If you plan to let someone else lead the marketing (ie a co-founder) then stop coding now and make that your only task.

Because your co-founder will almost certainly have input as to what you code. Indeed your current project may not be suitable at all.

Seriously, until you gave all this sorted out you are really just on holiday, and when your savings run out you'll be back looking for a job. And in this job market that may not be fun.

This is the hard part of starting a business. If you want a fun holiday then by all means continue coding. If you so much as open an IDE or run a compiler this week then at least admit to yourself that's what this is.

If you really want to start a business then do the hard part while you have time. Find a market. Or a person. Until the market is found don't bother writing code. You are wasting time (which is in limited supply.)

I know this sounds harsh, but I'm hoping you hear it. Perhaps you will. If not, you'll be following in the footsteps of the 95% who failed. Which doesn't make you a bad person.

I'll close by saying that maybe you've romanticized what a startup is. Hint- it's not coding. That's maybe 10% of it. And you code what the customer wants not what you want. If what you really want is to code your hearts desire, then get a day job to pay the bills and code for fun after hours.

Until you are ready to accept that the "code doesn't matter" then you have a hobby not a startup.

I genuinely wish you all the best. Sorry if my words seem harsh.

Canada definitely has a "first buyer problem" which makes it hard to get liftoff. A great many Canadian startups end up going to the US to get funding to get around this issue.
I think there's a huge bias toward this "easy money" yea. I mean the Canadian government is in a bind with these tariff issues and what do they reflexively reach for? Pump more oil and gas. It's the easy fast, simple solution to problems and so every government returns to this well to the detriment of other industries that don't receive the same attention.
> Heck, China, Israel, and India all have larger tech industries than Canada and have much stricter internet speech requirements.

It's almost like all three of those involve absolutely enormous captive markets, including for their defence/espionage purposes.

Oh cool, we should set up stricter free speech restrictions in order to encourage our nascent tech sector. Sure thing champ.

Canadian tech is nonexistent because we continue to see ourselves as a colony instead of a country, a resource-extraction post-national economic state instead of a people.

the biggest reason is that canadians speak English

we could much more easily get a Quebecois tech industry than canadian

Smh what's with these dumb takes. Literally the only thing blocking a self-sustaining Canadian tech scene is the lack of capital.

Has anyone who comments these hot takes ever talked with Canadian founders or tried to raise capital in Canada?!? Do y'all even know what a term sheet is?

It doesn't matter if you live in Quebec, Alberta, or Nunavut - why the hell would I as a fund manager at Ontario Teachers, ScotiaBank, or a family office allocate $100M in Canadian equities over American or Asian equities? You could potentially make a case for commodities like ONG and metals, but much of the trading for that is cleared in Chicago and London and the past decade of major capital projects in the space were all blocked - be it pipeline projects by BC and Quebec or renewables projects by Alberta and Saskatchewan. But even with commodities that basically leaves Canada turning into a North American version of Australia or Russia.

This can only be solved with significant government support and intervention, which is how Israel, China, India, South Korea, and the UAE developed sustained domestic VC markets. The Carney admin has started to make the right moves.

> The Carney admin has started to make the right moves.

What moves in particular?

The creation of the Strong Fund, the Tech Fund, and sector specific SWFs like the Food Security Fund which can all participate in the VC Action Plan, along with increased coordination between provincial funds and the federal government and increasingly serious conversations about providing a tax shelter for venture and early stage capital in Canada.
And why, pray tell, is that the case? Because the Liberal government has created a terrible environment for Canadian businesses over the last 11 years, ballooning the size of the public service and the amount of regulations and bureaucratic oversight, as well as trying to pick winners by handing out subsidies to all the wrong companies in service of their ideological agenda. They would rather companies fail than succeed without their "help". That, and they've done everything in their power to keep the housing bubble juiced instead of allowing an RE correction. But hey, running the country into the ground while trying to blame everything on the orange man gets you elected, so I don't expect any course correction.
Dude, these problems predate the Liberal government(s) we've had by decades. It's a problem endemic to Canada's colonial background and existence as a resource extraction zone, and both mainstream political parties have made it happen, and both have sets of friends which benefit from their different flavours of patronage. Frankly the conservatives were worse when in power on doubling down on turning Canada into a pure petro-state above all.

I've never seen a healthy tech sector in Canada and I've been working in it for 30 years through the regimes of both flavours of asshole politician.

This. It's the exact same problem Australia faces as well, except Australia is basically a bizarro version of Canada where Harper won.
Canadian tech was thriving 10-20 years ago, there is a reason it was called Silicon Valley North. RIM, Nortel, Celestica, QNX... I can't explain what exactly happened. A simple explanation would be Liberals prioritized real estate growth, unlimited immigration to artificially boost GDP but I suspect the problem is more complex.
Balsilie sold out to America what China didn't steal and undercut is what happened
> Canadian tech was thriving 10-20 years ago...

Moreso 20 years ago, but more to that in a bit.

> I suspect the problem is more complex

Yes. The answer is the absolute growth of the US economy over the last 20 years compared to Canada.

In 2006, the market cap of the TSX and NYSE+NASDAQ was roughly US$1T versus US$26T respectively.

In 2025, the market cap of the TSX and NYSE+NASDAQ was around US$4.8T versus US$87T.

Additionally, from 2006 to 2026 the Canada's GDP grew from around $1.3T to $2.42T whereas America's GDP grew from around $13T to $31T.

Basically, there was always a US-Canada gap, but the gap turned into a chasm over the last 20 years, especially as Canada's GDP growth wasn't able to keep up to the US [0] and was tied to energy markets.

The brutal reality is Canada's economy is significantly less complex that the ambitions on Canadian HNers. Canada's export bundle is roughly as economically complex [0] as Bulgaria [1] and Serbia [2].

Real estate and immigration is the easy boogeyman, but it's never been a serious consideration for institutional investors in Canada.

Institutional investors with a Canada thesis primarily wish to invest in ONG, Energy, and Construction associated to those industries, yet bipartisan bickering such as BC+Quebec blocking pipelines and Alberta blocking renewables projects wiped out tens of billions of dollars worth of projects and dealflow, and played a role in US$1T in capital leaving Canada [3] over the past decade. Additionally, Canada's major differentiator against the US in the 2000s was it's ONG sector, but by the 2010s the US was able to take advantage of shale fracking and NatGas in order to completely upend Canada's leverage on the American energy market. Heck, fracking was subsidized by a Democrat (Obama) and green energy was subsidized by Republicans (eg. TX wind/solar and Perry or Solar Panel manufacturing in Georgia and Arizona). Meanwhile, in Canada liberal leaning parties would undermine fossil fuel dealflow and conservative parties would undermine renewable dealflow.

With such a diverge, Canadian capital basically left for the US and even Canadian companies like RIM and OpenText shifted much of their leadership and core IP to their US divisions.

[0] - https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locat...

[1] - https://atlas.hks.harvard.edu/countries/124/export-complexit...

[2] - https://atlas.hks.harvard.edu/countries/100/export-complexit...

[3] - https://atlas.hks.harvard.edu/countries/688/export-complexit...

[4] - https://www.rbc.com/en/thought-leadership/the-growth-project...