Emerging Tech Hubs in Canada That SMEs Should Watch

Toronto, Vancouver, and Montreal will probably stay Canada’s “big three” in tech. But the story doesn’t end there.

Something interesting is happening outside the spotlight. Small and mid-sized Canadian cities are quietly building serious tech muscle, and SMEs are catching on.

These places also have great talent. Plus, office space is more affordable, and it’s easier to get government grants. 

In other words, SMEs can scale faster in these cities without burning half their budget on payroll and rent. Want to see which cities we are talking about? Well, keep reading.

Why SMEs Are Leaving the Major Cities

While multinational companies can afford premium office space in expensive cities and still stay profitable, most SMEs can’t. High rent and high operating costs eat too much of their margin. So, to protect their target profit levels, many SMEs are choosing to set up outside the major tech hotspots.

Here’s what’s driving that shift.

1. Salaries Are Much Higher in Big Metros

When payroll eats the entire budget, growth becomes slow and stressful. Toronto and Vancouver have incredible talent, no doubt. But hiring there costs a lot, almost 20-30% higher than in smaller cities.

 For example, a software engineer in Toronto gets a total compensation package of around CA$140,000 per year. Meanwhile, a similar role in Winnipeg is listed at around CA$93,000.  For an SME, that difference can decide whether you can afford three engineers or just one. 

2. Office Space Is Too Expensive

Many SMEs realized they were spending more money on square footage than on product development. The posh office spaces in Toronto’s downtown core charge 2 to 3 times more than cities like Calgary or Halifax. Cheaper commercial space in smaller cities lets companies hire faster and scale without burning their runway.

3. Tech Giants Absorb the Talent First

Big metros have hundreds of recruiters working for Amazon, Microsoft, Shopify, and every fast-scaling VC-funded startup. SMEs often lose candidates before they even get the first interview call. In mid-sized cities, talent is more available, and job searches aren’t a constant bidding war. SMEs can finally compete instead of always being outbid.

4. Commutes Are Becoming a Deal-Breaker

Employees don’t want to sit in traffic or squeeze into trains for two hours a day. Quality-of-life matters now. In smaller cities, people can live near work, buy a home sooner, and spend evenings with their families instead of in transit. When employees are happier, retention gets easier and SMEs don’t have to replace talent every few months.

5. Mid-Sized Cities Offer a Better Balance for Everyone

This is what flipped the script. Smaller Canadian cities are not just cheaper for the employer. It goes both ways. Employees here have a more relaxed and comfortable life. The hiring market is calmer, rents are lower, and there’s less pressure in general.

 SMEs can finally shift their focus from surviving in a tech capital to building a good product.

5 Cities Quietly Becoming Canada’s Next Big Tech Players

Kitchener–Waterloo, Ontario

 “ A tech brain per square kilometre;” that’s how Kitchener is known countrywide. And, rightfully so. More than 343,000 tech workers live in the region. And, from 2021 to 2024, the tech population in this area grew by 58.2%.

 The ecosystem is dense, scrappy, and engineering-heavy. University of Waterloo pumps out talent, and Communitech acts like the unofficial talent-matchmaker for founders.

In short, SMEs get access to top-tier engineering and CS graduates from the University of Waterloo without paying typical Toronto premium salaries.

Best for SMEs in AI, SaaS, robotics, hardware, and cybersecurity.

Calgary, Alberta

Calgary reinvented itself as the hub of clean energy tech, cybersecurity, logistics tech, and fintech. Thanks to all the oil and gas brainpower existing in the city.

Talented engineers are everywhere here. In recent years, Calgary has had the highest percentage increase in tech population; 61.1%. Immigration is booming. And Alberta’s government throws generous support behind tech growth. Calgary is quickly becoming one of the easiest places in Canada to scale a tech team without blowing payroll.

Best for SMEs in Energy tech, cleantech, logistics tech, and fintech.

Ottawa, Ontario

With over 250 companies and 21,000+ employees in communications technology, Ottawa is a global leader in next-gen networks, optical hardware, and IoT platforms. The city is home to hundreds of firms working on encryption, identity management, risk analytics, and security operations. As an SME, you can tap into its R&D infrastructure and hire tech brains already concentrated in the area. Not to mention, technical salaries are slightly lower without sacrificing quality.

You can also benefit from the local ecosystem’s openness to innovation and support programs (grants, incubators). 

Best for SMEs in Cybersecurity, telecom, med-tech, & deep tech.

Winnipeg, Manitoba

Winnipeg’s tech scene isn’t loud. You don’t hear about it in magazines or talk shows. But the ecosystem is focused, practical, and product-driven rather than hype-driven. Winnipeg is home to a strong manufacturing base, including heavy-vehicle manufacturing, aerospace (parts and maintenance), transit buses, and agricultural equipment. 

 If you’re an SME in manufacturing, robotics, IoT for equipment, or supply-chain tech, Winnipeg offers strong manufacturing partners and access to skilled engineering/manufacturing talent.

Also, the cost of office space and labor is among the lowest in the country for a mid-sized city. That’s a blessing for SMEs with limited budgets.

Best for SMEs in SaaS, manufacturing tech, supply-chain tech, and agritech.

St. Catharines, Ontario

St. Catharines was never known as a “tech city.” Now it’s surprising everyone. The Niagara region witnessed a growth in IT jobs by 83% over the past decade. The growth rate far exceeded Ontario's average of 59%. 

For SMEs, this means there is a growing digitally-oriented talent pool accessible without the premium salaries of Toronto. If you need software engineers or digital service staff, you can find them here. The city is especially attractive to SMEs in the service industry (consumer tech companies, SaaS startups, and remote-first businesses). 

No wonder, As more founders, engineers, and remote workers relocate from major metros, the demand for St. Catherine’s homes for sale has been climbing, driven by lower living costs and proximity to Toronto. You have the option to be close to Toronto without actually living in Toronto. How smart is that! 

Best for SMEs in SaaS, consumer tech, digital media, remote-first teams.

Bottom Line

And to be honest, they should not waste their limited resources fighting for attention in Canada’s biggest tech cities. That’s like a suicide mission. Growth actually happens fastest where hiring is easier, retention is higher, and office costs don’t eat the runway.

The cities above aren’t just a “maybe” list. They’re already building the next layer of Canada’s tech economy without the noise and the drama.