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Canada’s best and brightest computer engineering graduates are leaving for jobs in Silicon Valley at alarmingly high rates, fuelling a worse “brain drain” than the mass exodus by Canadian doctors two decades ago, according to a new study.

The study, led by Zachary Spicer, a senior associate with the Munk School of Global Affairs’ Innovation Policy Lab at University of Toronto, found one-in-four recent science, technology, engineering and math (STEM) graduates from three of the country’s top universities – University of Waterloo, University of British Columbia and U of T – were working outside Canada.

The numbers were higher for graduates of computer engineering and computer science (30 per cent), engineering science (27 per cent) and software engineering, where two out three graduates were working outside Canada, mostly in the United States. Nearly 44 per cent of those working abroad were employed as software engineers, with Microsoft, Google, Facebook and Amazon listed as top employers.

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The study, spearheaded and partly funded by Toronto-based tech firm Delvinia Interactive Inc., surveyed 3,162 graduates from 2015 and 2016 in 22 STEM programs at the three universities based on their LinkedIn profiles and select follow-up interviews.

The findings come as a sharp contrast to recent developments suggesting Canada’s star is rising in the tech world.

“I think policy makers should look at this as a bit of a wake-up call,” said Mr. Spicer, who said the study was the first scholarly effort to map out Canada’s tech brain drain. “When we see certain fields where upward of 65 per cent of a graduating class are leaving for the U.S., I think there should be concerns there that our homegrown companies aren’t even going to be able to access some of that talent. If we found in the 1960s that 60 per cent of our auto workers were leaving to work in other countries … we probably would have held a royal commission.”

Related: Southern Ontario’s Silicon Valley: Unleashing Waterloo’s tech-innovation sector

Opinion: Will Canada’s universities step up to stop the brain drain?

A separate 2017 survey by students from that year’s graduating class of the University of Waterloo systems design engineering program found that 60 per cent were moving to the United States for work. “There’s a premium on California and New York jobs” among graduating students, said Joey Loi, one of the 2017 survey’s authors, who himself moved to San Francisco to work for Dropbox.

There is a cost to such a heavy brain drain: governments spend billions subsidizing the cost of university education, while students who go on to work for foreign companies help fuel the economic growth of those countries. A lack of successful “scale-up” tech firms in Canada has been cited as one of the reasons research development spending and productivity here have lagged other developed countries.

Delvinia chief executive Adam Froman said he decided to fund the study after hearing from fellow tech CEOs that Canadian computer-engineering grads “aren’t even considering working at Canadian companies. … We all have so many job opportunities up here,” yet many just want to go to California. “Nobody had really asked those who had left why they left.”

The main reasons graduates are leaving in droves, the study found, include higher salaries in such tech hot spots as San Francisco/Silicon Valley and Seattle, where tech workers earn on average close to double the US$73,000 rate of their peers in Toronto, according to a recent survey by Hired (even adjusting for cost of living, average salaries in U.S. cities such as San Francisco and Seattle were 13 per cent to 44 per cent higher).

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But the survey also found students sought out global giants with solid reputations in order to enhance their career options, receive better mentoring and work on a wider scope of projects than was available at home. “Many respondents remarked that there was pressure from their peers to seek work with large American technology firms, buoyed by a ‘Cali[fornia] or bust’ maxim,” the study said.

Pearl Sullivan, the dean of Waterloo’s engineering school, disputed the assertion that a high number of Waterloo students head south after graduation, maintaining that 85 per cent of alumni list a Canadian address as their preferred point of contact. According to the university, migration rates have dropped sharply since 2000 and are now around 10 per cent.

Mr. Spicer dismissed Waterloo’s data, saying “the mailing address on file for recent graduates could well be their family address. This is precisely why we picked a data-collection method that could capture recent location and work activity. Graduates have much more incentive to update their LinkedIn profiles than they do to update their address with the university to receive their alumni magazines.”

Sheldon Levy, Ontario’s former deputy minister of advanced education and skills development and former president of Ryerson University, said “if two-thirds of our very best people [are leaving] because they don’t see the equivalent opportunity of developing a world-beating career in Canada … then yes, we have a problem.”

Mr. Froman called on Canadian companies, governments and universities to work together to develop a “national talent-retention strategy.” Among the study’s recommendations are calls for Canadian tech companies to raise pay levels for incoming workers and to increase their visibility and communication to prospective hires on university campuses. The study calls on government to help students pay back their loans and to help smaller Canadian firms fund co-op salaries. Universities should prioritize Canadian co-op placements, the study suggests.

“The fact that Canadian tech scale-ups are having trouble filling their positions … is something we should all care about,” Mr. Froman said. “I’m not expecting we’ll turn this around [completely]. If you’re a 24-year-old kid, it’s kind of exciting to get paid $100,000 to go down to the Valley. But if we knocked [the number leaving] back by 30 per cent, that’s a good start.”

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