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0 pointscsdreamer79y ago0 comments

Are not most of your customers (at least for tech companies) in the US? Wouldn't the weak Canadian dollar help you in that respect? I understand taxes are higher in Canada, but in the US most tech companies have to contribute to medical insurance.

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5 comments · 2 top-level

sdm9y ago· 3 in thread

In our case, most of our customers are not in the US. But, with the exception of local customers and and customers that have Canadian subsidiaries (we deal mainly with enterprise customers) -- most customers pay in USD. If you're a large US tech company looking to near-shore, the low dollar is great; but, not so much if you're a local company.

* Our non-salary expenses are largely paid in USD (hosting, cloud services, etc) * Developer salaries are in a global-ish market and we've seen salaries shoot up greatly because of the falling dollar to compete the falling purchasing power of the CAD * Large US companies opening up local development offices further driving the * Revenues lag the costs of salaries and other services -- we have to pay our staff, hosting, cloud services before we receive revenue. Of course, this is always the case, but with the falling dollar you feel it more, especially in the case of salaries

In short, this is not manufacturing where your inputs and salaries are largely localized. At best the falling dollar is a push and at worst it's a negative impact. Really, it's currency volatility that is more the issue, if it would stabilize and stay that way for a few years, it would make planning and adapting much easier. This year alone, we've seen 0.68 dollar and a 0.79 dollar.

Add to this:

* The general "Canadian Discount" US VC give to Canadian companies and the stinginess of Canadian VC * The SRED roulette -- it's not really free money as described, you have to spend it then pray the government will give you the tax credits. In my experience what's decided as SRED-able can really depend on who the reviewer is, it's more of a lottery than anything else unless you can dedicate someone basically full time maintaining SRED records. Also, you can't pay for salaries and services with tax credits -- they only help for the next year if you have profits.

Actually, corporate taxes are lower for a Canadian Controlled Corporation than the equivalent US company, but that doesn't really factor into things like salaries. Taxes are on profits and salaries are before profits. Also, most Canadian companies, especially in the tech sector, also have to contribute to medical insurance. You're going to have a hard time recruiting without extended health care benefits.

All that said, I am positive on running a company here. Just would like less uncertainty in terms of exchange rates.

aianus9y ago

You're going to have a hard time recruiting twenty-somethings without vision and dental, really?

I pay for that stuff out of pocket and it's like, $500 a year.

derefr9y ago

Keep in mind that because Canada has no public dental coverage, people who live the serial-entrepreneurship life, never signing on with companies large enough to have benefits-plans, just have constantly worsening teeth. I have a non-negligible number of friends here who want to work at a bigcorp for a while just so they can finally get coverage to do 5+ root canals. (As it stands, they're just constantly taking anti-inflammatories and antibiotics to get through the days.)

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sdm9y ago

Yes, you will. Especially for engineers who often need vision. Also, not everyone is in their 20s. Most of the top talent to recruit is in their 30s.

spoonie9y ago

Taxes aren't necessarily higher (at least compared to California) if you consider things like healthcare costs and university tuition over your whole lifetime. But yes, goods costs and taxes will be higher.

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