CALGARY — When the Alberta government launched its “Alberta is Calling” campaign in 2022—an ad blitz that sought to lure skilled workers away from Toronto and Vancouver—Canadians seemed happy to answer. 

Newcomers flooded in from other provinces in record numbers, perhaps drawn to Alberta’s low tax rates and relatively affordable housing. So dramatic was the influx that the Vancouver-based B.C. Business Council launched its own competing campaign—“Stay with B.C.”—to convince them to hang up the phone, so to speak. 

Whether or not the rival campaigns have actually swung peoples’ decisions, they point to an emerging battle between the two provinces for tech and business supremacy—a nascent competition best illustrated by the stark differences in momentum in Vancouver compared to Calgary.

Once the uncontested power centre of Western Canada’s innovation economy, with its unmatched coastal views and diverse tech sector, Vancouver has lost some of its lustre. While Calgary’s tech space remains far behind Vancouver’s in terms of scale, it is firmly on the upswing, drawing ever-more venture capital funding and jobs. 

“Alberta is eating our lunch,” said Dan Burgar, head of the B.C. tech lobby group Frontier Collective. 

Burgar and other business groups have been urging the B.C. government and City of Vancouver to introduce new policies to reverse the province’s sagging economic fortunes. 

In 2023, for the first time in a decade, more people left B.C. than arrived in the province. Rising provincial and municipal taxes continue to crimp investment, business groups say, while home prices are among the highest in the country. B.C. lost nine head offices between 2012 and 2021, and today is home to 12 per cent of Canada’s headquarters—below its 14 per cent share of the national population. 

The temporary economic boost the province got from building major projects like the $40-billion LNG Canada facility or $16-billion Site C dam has faded, and the government continues to run “record-breaking structural deficits” in its budgets, said Laura Jones, CEO of the B.C. Business Council that launched the “Stay with B.C.” campaign. RBC analysts expect the province’s debt burden to hit a new high of 28 per cent of GDP in 2026-27. 

“There are some very worrying data points for British Columbia,” Jones said.

Her group’s campaign is an effort to “inject a little humour into a serious topic,” she added, but the effort also underscores B.C.’s worsening economic and business outlook compared to its neighbour. 

Alberta’s workforce is growing at the fastest rate in Canada. During the first six months of 2024, Alberta’s venture capital investment for the first time outpaced B.C.’s. Alberta’s corporate and income taxes are comparably lower. At 12 per cent, Alberta’s marginal effective tax rate on investments in machinery and equipment is less than half of B.C.’s 26 per cent. More companies have moved their headquarters to Edmonton and Calgary, with Calgary having the highest number of head offices per capita in Canada, according to Calgary Economic Development. 

Some observers say that momentum offers a window for Calgary to close the gap with competing cities like Vancouver. 

“If I look back to where Vancouver was 10 years ago, that’s probably where we’re at [today],” said Brad Parry, head of Calgary Economic Development. “We’re maturing in that case, where I think now our focus has to be scaling.” 

Despite its progress, Calgary’s tech sector remains a long way from matching the size of Vancouver’s (or Montreal’s or Toronto’s). 

While Alberta completed almost as many venture capital deals as B.C. in the last two years, it doesn’t measure up so well in deal value, according to Canadian Venture Capital & Private Equity Association data. Last year, Alberta posted 84 transactions to B.C.’s 88, but they amounted to just $698 million compared to B.C.’s $2.5 billion. 

Calgary still lacks an “anchor tech company” like Shopify was to Ottawa or, years ago, BlackBerry was to Waterloo, Ont.—the kind of corporate resident that puts a city on the map, said Brent Holliday, CEO of Garibaldi Capital Partners, a tech advisory firm specializing in capital raising and acquisitions.

In 2019, Morgan Stanley’s $1.1-billion acquisition of Solium, which provides platforms for corporate equity compensation, was viewed as a validating moment in Calgary’s tech space, as was software company Benevity’s $1.1 billion sale nearly two years later. More recently, Calgary companies like fintech Neo Financial, debt payments company Symend and robotics firm Attabotics have raised ample venture capital. Yet the city lacks a steady stream of big-ticket tech exits—the type that spawn an ecosystem by generating cash for still greater ventures. 

Holliday said Calgary has numerous successful startups but not many have reached the $100-million annual revenue benchmark. It is well-stocked with talent—and to a lesser extent, capital—he said, but often lacks the key third pillar: truly innovative ideas that will disrupt the market. 

“Where’s the innovation that’s going to drive the bigger company, the successful company, the $100-million company?” he said. “The foundation is there and the roots are there; now what you need is the success that breeds success, that breeds more success, that breeds more success. You need the exits.” 

Some built-in obstacles could slow that progression. For one, the city’s long association with oil and gas has created a private equity sector that expects the sort of fast returns that industry is known for. That’s left Calgary short on patient capital that makes years-long bets on startups. 

Vancouver, with its well-established sectors like biotech and video games, has generated numerous companies that have met the $100-million benchmark in revenue. Clio, the legal-tech whose US$900-million investment round last year was the largest in Canadian history, surpassed that mark some time ago, Holliday said. The same goes for clinic management software company Jane App, while investment management platform Copperleaf, which sold for $1 billion last year, is nearing that level.

Frontier Collective’s Burgar said Vancouver still “punches above its weight” globally, but warns that “we could see this all slip away” without a significant reset. 

He’s calling on the Vancouver and B.C. governments to refocus on the innovation economy, starting with the province’s $500-million InBC fund, which Burgar said hasn’t funnelled enough capital toward earlier-stage startups. Calgary, for its part, has its own $100-million Opportunity Calgary Investment Fund, of which it has already committed $90 million. 

The B.C. Business Council prescribes lower corporate, income and other taxes to reduce the burden on workers, coupled with deep spending cuts by the provincial government.