Tech Turmoil Complicates Canada’s Policing of the Online World

Back in the spring my colleague Cade Metz, who covers artificial intelligence, driverless cars, robotics, virtual reality and other new technologies for The New York Times, declared Toronto to be “the third-largest tech hub in North America.”

Toronto moved into that position, he reported, because of investments by global technology giants including Google, Apple, Amazon and Microsoft, which all have offices in the city. During the pandemic, he found, a rapidly rising number of people were working from home for Meta, formerly Facebook. Days after Cade’s article appeared, Meta announced that it, too, was formally joining the rush to Toronto and would open an engineering center with 2,500 people.

Cade also met Tristan Jung, a Korea-born computer scientist who grew up in Toronto. After working for six years at Twitter’s headquarters in San Francisco, Mr. Jung opened an engineering hub in Toronto that, at that time, had hired more than 100 people.

[Read: Toronto, the Quietly Booming Tech Town]

Much has changed. First came the collapse in technology stock prices, then a wave of layoffs. This month, Meta laid off 11,000 employees, about 13 percent of its work force, and imposed a hiring freeze that has put the Toronto plan in doubt. Ottawa-based Shopify, which allows small retailers to set up online, soared to new heights for much of the pandemic. But the online shopping surge has waned and in July the company, which also had a large operation in Toronto before largely abandoning traditional offices, laid off about 1,000 employees. Canadian employees also were among the 10,000 people laid off by Amazon, the giant of online retailing, this month.

The layoffs have trickled down to small Canadian tech companies and tech start-ups throughout the country, as once-abundant funding has become scarce.

And then there’s Twitter, post-Elon Musk.

As with many things about Twitter since Mr. Musk’s purchase, it’s impossible to accurately determine the state of the company’s operation in Canada. But it appears that it has not been spared from the deep cuts the new owner imposed, or the waves of resignations across the company. Among the departed is Paul Burns, Twitter’s former managing director for Canada.

[Read: Two Weeks of Chaos: Inside Elon Musk’s Takeover of Twitter]

As my colleagues and I have reported, several factors turned the gaze of multinational tech companies toward Canada. Chief among them are immigration rules that make it easier to bring in workers from third countries than is possible in the United States, pioneering work at Canadian universities in artificial intelligence, the reputation of schools like the University of Waterloo and lower salaries than in, say, Silicon Valley.

Courtney Radsch, a senior fellow at the Centre for International Governance Innovation who studies the tech industry, told me that the days when big tech headed north may be nearing a permanent end.

“The pullback by big tech companies is going to impact Canada probably more so than the U.S., because there is this simultaneous pressure to do more in the home country to ensure jobs there,” she said.

But that, in her view, isn’t necessarily a bad thing. Most businesses today rely on technology, often to a considerable extent. The current round of layoffs is freeing up people with skills those companies need, while also meaning that they are no longer competing with the likes of Meta on wages.

The pullback by big tech may also complicate the federal government’s continuing struggles with its four bills now before Parliament that, if passed, will require tech companies to compensate Canadian news organizations, ensure that Canadian videos have a home in the online world, improve privacy and boost security online.

Some of those bills are second attempts by Prime Minister Justin Trudeau’s government after it failed to push similar legislation through Parliament before last year’s election. The current tech turmoil, however, shows the difficulty in regulating an industry that’s often in flux.

Twitter would be affected to varying degrees by all of those bills. But David Reevely, a reporter for The Logic, an online publication that often focuses on the relationship between government and tech, reported that since Mr. Musk’s takeover, no one from Twitter is showing up at meetings with the government to discuss plans to regulate the company. That absence comes at a time when concerns have never been higher about abusive behavior on Twitter and the privacy of its users — two issues the government is trying to deal with through regulation.

Mr. Reeveley’s reporting also suggests that the government no longer has any point of contact at the social media company it hopes to regulate.

It is possible, of course, that Twitter will stabilize and normal relations will return. But there is also a widespread, and growing, concern that it will collapse. Either way, the government may soon find itself with laws that are both new and out of date.

This week’s Trans Canada section was compiled by Vjosa Isai, a reporter-researcher for The New York Times who is based in Toronto.

A native of Windsor, Ontario, Ian Austen was educated in Toronto, lives in Ottawa and has reported about Canada for The New York Times for the past 16 years. Follow him on Twitter at @ianrausten.

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