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Mind the gap: Compensation disparity between Canadian and American technology workers

The significant compensation disparity between Canadian and American tech workers calls for renewed efforts to scale Canadian tech companies. Canada risks being left behind when it comes to its investment in the technology economy. For over two decades, there has been little change in who makes up tech workers in Canada. One key component in our quest to catch up is the ability to attract and retain top tech talent to work in Canada. Yet the prevailing narrative cites fierce competition from US-based companies, who can afford to out-bid Canadian tech companies in compensation offers.

In this study, we carefully examine this claim, combining reliable data sources on tech pay in both countries, and adjusting for a host of factors, including purchasing power, cost of living, and compositional components. We show that the tech pay gap is present, is large, but is not simple.

Key insights

Overall, tech workers in the US were paid 46 percent more than tech workers in Canada: The pay gap between tech workers in Canada and the US is significant, even once purchasing power is taken into account.

Ten percent of the tech pay gap between US and Canada can be explained by a higher share of part-time, part-year work north of the border: One key contributing factor to the tech pay gap was the much larger share of tech workers in Canada who worked part-time, part-year. In fact, when we restricted the analysis to just full-time full-year workers, the gap decreased to $34,800, or a 10 percent reduction in the overall pay gap.

Pay inequity across gender and educational markers is much starker in the US than in Canada: Pay inequity in tech in the US based on one’s gender identity and educational attainment were much starker compared to that in Canada. However, due to the underrepresentation of both women and those who don’t hold a Bachelor’s degree in both countries, closing the already-smaller pay inequity in Canada had little impact on the overall pay gap.

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