A new study finds that U.S. tech employees earn a staggering 46% more on average than their Canadian counterparts.
The research, released by The Dais public policy institute at Toronto Metropolitan University, highlights the substantial income gap that tech workers in the two countries face. The average annual salary in the Canadian tech sector is $83,700, while tech professionals in the United States command significantly larger incomes, averaging $122,600.
“Despite being among the top countries in the world for producing tech talent (with four universities ranked in the global top 100 universities for engineering and technology), a recurrent narrative of lower wages for tech workers in Canada persists,” says the study authored by Vivian Li, Mahmehr Hamza, and Anusha Arif.
The study concludes with two clear calls for action to address the tech wage gap. The first being to boost growth in the tech ecosystem, and the second to develop fair, equitable and competitive distribution.
To achieve their results, researchers combined data on tech pay in both countries adjusted for purchasing power, cost of living, and compositional components. The study’s findings clearly show tech workers are much better compensated in the U.S.
Intriguingly, the study reveals that Canadian tech workers, whether in tech hubs like Toronto or Kitchener-Waterloo or not, were paid similarly. In contrast, tech workers in U.S. tech hubs received a notable pay premium, indicating that the U.S. tech sector may have more geographic disparities in pay.
“Tech hubs in the US such as Silicon Valley and Seattle pay the average tech worker nearly twice as much as the average tech worker in Toronto,” says the study.
Furthermore, the study points to non-wage compensation as a noteworthy factor. Non-wage compensation, particularly equity value from stock compensation, for tech work in Canada is sometimes valued at half of what it is in the United States.
Neglecting to address this pay gap could result in further talent drain to the United States, exacerbating the phenomenon known as “brain drain” or the mass emigration of highly skilled Canadians to the U.S., which has disproportionately affected Canada’s tech sector.
Annual surveys published by the University of Waterloo show that some graduating classes in programs involved in the tech sector have as many as 85% of alumni who plan to work or accept a full-time offer in the U.S. after graduation.
The research unveiled wage discrepancies and scrutinized gender and racial disparities within the tech industry.
“The distribution of tech wages in the US by racial identity is much larger than Canada,” says the study, while presenting the following statistics.
In the U.S., tech workers of South Asian, Chinese, or Japanese descent earned on average 60% more than their counterparts from the lowest-earning racial groups, Black, American Indian, Alaskan Native, Native Hawaiian, or Pacific Islander. Meanwhile, in Canada, tech professionals of South Asian, Chinese, or Japanese descent earned approximately 8% more than those from the lowest-earning racial groups, those who identify as Black, Arab, or Filipino. A gender wage gap is evident in both countries, with female tech workers making less than their male counterparts by around 26% in the U.S. and 17% in Canada.
