Canada's technology sector experienced unprecedented growth in the second quarter of 2025, with Toronto and Vancouver leading the charge in job creation and venture capital investment, marking the strongest performance since the dot-com boom.
According to new data released by the Canadian Technology Association (CTA) and Statistics Canada, the tech sector added over 75,000 jobs between April and June 2025, while attracting $8.2 billion in venture capital investment – a 67% increase compared to the same period in 2024.
Record-Breaking Numbers
The growth statistics paint a picture of a sector in rapid expansion:
- Job Creation: 75,428 new positions across software development, artificial intelligence, cybersecurity, and fintech
- Venture Capital: $8.2 billion invested across 342 deals, with an average deal size of $24 million
- Startup Formation: 1,847 new tech companies incorporated, a 43% increase year-over-year
- Export Growth: Tech services exports increased by 52% to $18.9 billion
Regional Powerhouses
Toronto continues to cement its position as Canada's tech capital, accounting for 42% of all new jobs and 38% of venture capital investment. The Greater Toronto Area now hosts over 15,000 tech companies, with major expansions announced by Microsoft, Google, and Amazon.
Vancouver emerged as a close second, driven by its strength in gaming, clean technology, and artificial intelligence. The city attracted $2.1 billion in investment, with notable funding rounds for local unicorns like Clio and Nuvei.
Other significant growth centers include:
- Montreal: Leading in AI and aerospace technology, with $1.8 billion in investments
- Ottawa: Government tech and cybersecurity focus, adding 8,500 jobs
- Calgary: Energy technology and fintech growth, up 78% in venture funding
- Kitchener-Waterloo: Continued strength in enterprise software and hardware
Key Growth Drivers
Several factors have contributed to this remarkable expansion:
Government Support
The federal government's Digital Charter Implementation Act and increased R&D tax credits have created a more favorable environment for tech companies. The Innovation and Skills Plan has allocated $2.3 billion specifically for digital transformation initiatives.
Talent Pipeline
Canadian universities graduated a record 47,000 STEM students in 2024, while the Global Skills Strategy has attracted over 25,000 international tech workers. The average tech salary in Canada has increased by 18% to $94,000 annually.
International Investment
Foreign direct investment in Canadian tech reached $12.4 billion in Q2, with major investments from U.S., European, and Asian firms seeking to establish Canadian operations.
Sector Highlights
Artificial Intelligence: Canada's AI sector alone attracted $2.8 billion in investment, with Toronto's Vector Institute and Montreal's MILA leading groundbreaking research. Major AI startups like Cohere and Element AI have reached unicorn status.
Fintech: The financial technology sector saw explosive growth with $1.9 billion in funding. Companies like Paymi, Nuvei, and Mogo are revolutionizing digital payments and financial services.
Gaming: Vancouver's gaming industry continues to thrive with $890 million in investment, driven by companies like Electronic Arts, Activision Blizzard, and emerging indie studios.
Clean Technology: Canada's cleantech sector attracted $1.2 billion, focusing on renewable energy, carbon capture, and sustainable manufacturing solutions.
Challenges and Opportunities
Despite the impressive growth, the sector faces challenges including talent retention, housing affordability in major tech hubs, and increasing competition from Silicon Valley for top talent.
"While the growth numbers are encouraging, we need to ensure we're building sustainable ecosystems that can compete globally," said Sarah Kim, CEO of the Canadian Technology Association. "Housing costs in Toronto and Vancouver are becoming a real concern for talent retention."
Looking Ahead
Industry analysts predict continued strong growth through 2025, with emerging technologies like quantum computing, 5G infrastructure, and autonomous vehicles driving the next wave of innovation.
The government's upcoming National Digital Strategy, expected to be announced in September 2025, is anticipated to provide additional support for the sector's continued expansion.
As Canada positions itself as a global tech leader, the second quarter's performance demonstrates the country's growing influence in the international technology landscape.