Analysis

September 20, 2023

Want to expand into the US or Canada? This region could give you the most value

Access to highly skilled talent coupled with low taxes and business costs makes Alberta an attractive option for startups and scaleups


Aruni Sunil

6 min read

Sponsored by

Invest Alberta

There’s been a recent surge in European startups looking towards North America, from a German HR unicorn opening a New York office to tap into the US talent pool to climate techs capitalising off America’s $369bn climate bill.  

But it’s not just the US: what are the advantages to building or scaling your business into Canada — and which regions offer the best value?

“Companies are constantly on the lookout for where they can find new markets, new customers, strategic partners, investors and innovation ecosystems that they can leverage to drive business forward,” says Troy DeFrank, investment advisor for Invest Alberta, a Government of Alberta corporation that promotes Alberta as an investment destination.

Advertisement

Alberta offers just this — and at low costs, says DeFrank, especially with its “very attractive commercial and industrial property market”. 

We asked the experts about the costs of doing business in Alberta vs the US — including items such as corporate tax rates, real estate costs, operating costs and talent costs.

‘Trending in an upward direction’ 

Aly Lalani, executive vice president at Colliers, a commercial real estate platform, says that Alberta is leading Canada right now and should be a top consideration for companies. 

Calgary has lots to offer, including having the youngest population of any major city in Canada

“Toronto, Vancouver and Montreal have been the three hottest markets over the last five years or so, but they're trending in the opposite direction now. Calgary [the largest city in Alberta], on the other hand, is trending in an upward direction,” he says. 

“Calgary has lots to offer, including having the youngest population of any major city in Canada, easy access to the Rocky Mountains and the Pacific Coast, and a major international airport — which is very important for businesses as accessibility is key from a logistics point of view.” 

He adds that from a commercial real estate perspective, “options in Toronto and Vancouver are limited as those markets are still pretty competitive and prices are very high”, whereas “in Alberta, we have lots of vacant high-quality office space throughout the major cities and an abundance of land so we can continue developing warehousing and logistics facilities on the outskirts”.

Low costs, high living standards 

Saroosh Gull, CEO of Eventcombo, an event management platform, says that they made the switch from the US to Alberta as they were scaling the business. Alberta is much more conducive to scaling a business, he explains — and the cost of doing business is about 20%-25% less. 

With hybrid work and the shift to remote work, we’ve seen families pick up and move from Vancouver and Toronto to Alberta

“The New York model is no longer conducive to scaleups,” he says. “We looked at Alberta because it's also going through the same growth spurt as us. As we were growing in the States, we decided that we can accelerate our growth even more in a place like Alberta and the factors were the cost of real estate, salaries, the costs of doing business overall.”

DeFrank adds that employees being able to afford to live and work in Alberta at cheaper costs than in the US also makes it an attractive option.

“Housing is an important consideration,” says Lalani. “You look at Vancouver and Toronto, the cost of housing is quite expensive compared to what we're seeing in Alberta — this has brought individuals and families here from Toronto and Vancouver. 

Advertisement

“With hybrid work and the shift to remote work, we've seen families pick up and move from Vancouver and Toronto to Alberta because they can still maintain their job and get a lot more bang for their buck, so to speak, on housing and the overall cost of living here.”

Gull also highlights the closeness with nature that the region offers. “I've driven through all of America, many, many times, and I've done a couple of road trips in Canada now — Canada and specifically Alberta’s natural beauty speaks for itself.”

In part due to high living standards, Calgary was named the world's third most liveable city by the Economist Intelligence Unit in 2022, and Edmonton (Alberta's second largest city) was found to boast North America’s fastest-growing tech ecosystem, according to CBRE.

“Once people are here, they realise that it's a major city with a unique and welcoming culture, and having the Rocky Mountains around an hour’s drive away from Calgary, is incredible,” says Lalani.

Tax and operating costs

Alberta has one of the cheapest tax environments in North America — not just in Canada, says DeFrank. “There’s no provincial sales tax, no payroll tax, no health premiums and just generally a low personal and corporate income tax rate.”

In the province's 2023 budget, Alberta's 2023-24 tax advantage was measured at $19.7bn. The tax advantage is an estimate of the total additional provincial taxes individuals and businesses would pay if Alberta had the same tax system as other regions. Albertans and Alberta businesses pay the lowest overall taxes when compared to other regions in Canada.

Gull agrees that Alberta has an advantage over other regions with its cost savings and incentives for business: “There's a lot of grants and other incentives.” 

Despite the benefits that Alberta and Canada offer to businesses, DeFrank says that the similarities between the US and Canada are also important to highlight. He says the two markets are similar in many ways — and companies that scale into Canada can still access the US market while enjoying all the advantages that the Canadian market has to offer.

“It is the closest bilateral relationship in the world. Obviously, that includes geographical proximity, so there’s a lot of shared infrastructure. But the two countries are also extremely economically integrated, and there are a lot of political and cultural similarities,” he says. “Over the last 10 years, we've really started to see companies from outside of North America look at Canada as a market that they could expand to and still access the US market.”   

Highly skilled talent pool

Amid a global tech talent shortage, Alberta boasts a deep pool of skilled talent. Alberta is home to almost 100k tech workers — and over 9,000 students graduate from STEM programmes annually. Canada also launched its first Tech Talent Strategy in June to attract even more global skilled talent. 

The market, particularly in tech, is driven by the ability to find and retain high-quality talent

Gull says that the “hungry talent pool” of skilled graduates from universities such as the University of Alberta and University of Calgary is a huge attraction for companies moving to Alberta. 

“The market, particularly in tech, is driven by the ability to find and retain high-quality talent. Alberta has the highest concentration of STEM graduates of any region in Canada,” says DeFrank. “Then there’s imported talent: Canada's progressive immigration regime is one of the big attractions, particularly compared to the US where it's quite restrictive.”

Learn more about opportunities in Alberta here.

Aruni Sunil

Aruni Sunil is a writer at Sifted. Follow her on Twitter and LinkedIn