Skip to main content

Snowflake will house new employees at a 50,000-square-foot space in the east tower of the Brookfield Properties’ building.Fred Lum/the Globe and Mail

U.S. cloud computing giant Snowflake Inc. SNOW-N is opening Canadian headquarters in downtown Toronto and plans to hire hundreds of engineers, welcome news for the largely empty business district and a domestic tech sector that is girding for significant layoffs.

Bilal Khan, the head of Snowflake’s Canadian operations, said the development hub will support the company’s new in-house marketplace populated by applications built by third-party developers for Snowflake customers. The company announced its app marketplace plans Tuesday at a user conference in Las Vegas.

Snowflake joins other business-to-business digital platform companies, including Shopify Inc. and Salesforce Inc., that have similarly fuelled their growth by supporting app marketplaces.

“Our Canadian footprint will not only get significantly larger but also significantly more strategic,” Mr. Khan said in an interview. “The native apps part of our platform is a big part of the future of Snowflake, in terms of the direction and core infrastructure of what our business will look like.”

The new employees will be housed at a 50,000-square-foot space in the east tower of Brookfield Properties’ Bay Adelaide Centre in Toronto’s financial district. Its footprint could double as the company scales up its operations, Mr. Khan said, adding that it will likely have a hybrid work model. Snowflake currently employs about 100 people in Canada, spread across various functions, including 10 to 20 engineers.

Snowflake, based in Bozeman, Mont., warehouses data for 6,300 customers globally on its software platform, which in turn is hosted by operators of physical public cloud data centres, including Amazon Web Services, Microsoft and Google. Snowflake said in early 2021 that it would open an engineering site in Toronto.

Tuesday’s announcement is a positive sign for downtown Toronto, which has suffered from multiple rounds of COVID-19 restrictions and prolonged work-from-home mandates, leaving many office workers working from home at least part-time.

The area’s office vacancy rate hit 8 per cent in the first quarter of this year, according to commercial real estate services firm Avison Young. That is the highest in two years and is partly due to the opening of a slew of new skyscrapers. Available sublets as a percentage of total available office space amounted to 23 per cent in the first quarter, according to Avison Young. That is down from a high of 36 per cent in the last quarter of 2020.

Although more workers have started trickling back into offices, the volume is still about 25 per cent that of prepandemic occupancy levels, according to early June data from consulting firm Strategic Regional Research Alliance, which estimates that up to 40 per cent of employees work out of the office at least once a week.

Office landlords often point to the growth of the tech industry as a reason demand will not abate for their spaces, although many tech companies have signalled they may continue to operate virtually after the pandemic.

Meanwhile, anxious times have returned to the tech sector as early-stage companies try to rein in spending and preserve their cash to prepare for what some fear could be a prolonged downturn. Widespread job cuts already under way in the United States are expected to follow in Canada in the coming months, industry experts predict.

“I absolutely appreciate how challenging the environment has been for a lot of companies,” said Mr. Khan, a former head of data across North America for professional services giant Deloitte. “We’re in hypergrowth mode. Nothing in our underlying business has fundamentally changed. We’re still growing at an exceptional rate and we still intend to grow quite aggressively.”

Other foreign tech companies are also still scaling up in Canada, drawn by the country’s strong talent pool and generous tax credits. For example, British autonomous vehicle software company Oxbotica Ltd. is looking to expand its Toronto engineering office – the company’s first outside its Oxford headquarters – to 50 people in the next year, up from six, a spokeswoman said.

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.