For the global innovation economy, 2025 began with a reset.
The Global Startup Ecosystem Report (GSER), released today by Startup Genome and the Global Entrepreneurship Network, confirmed what many founders and funders already sensed: After more than a decade of rapid expansion, the world’s startup ecosystems are navigating a steep contraction.
Ecosystem Value, a measure of economic output from tech startups, fell 31% globally. In North America, the drop was 18%.
Canada did not escape the downturn entirely, but its performance tells a different story.
While no Canadian ecosystem surged into the top global ranks or posted unicorn-level gains, Calgary bucked the broader trend with a 13% increase in Ecosystem Value — one of the few North American cities to grow during this period. Others held firm, reflecting a model focused on stability, sector balance, and long-term alignment.
In a year defined by uncertainty, Canada’s startup ecosystems offered something rare: stability.
Editor’s note: This podcast summary is entirely generated and voiced by AI.
Resilience through structure, not surprise
Toronto-Waterloo remains Canada’s top-ranked ecosystem, holding the #20 position globally. It also ranks #2 in North America for “Knowledge,” a measure that tracks research output and patent activity.
While other regions struggled to retain investor interest, Toronto-Waterloo was among the few ecosystems globally where AI-related funding increased more than 10 times between 2022 and 2024. Still, Toronto-Waterloo did not break into the global Top 10 ecosystems, and Canada overall remains behind leading hubs in securing global capital at scale.
This suggests a pattern: Canada’s top ecosystems may not dominate the headlines, but they are doubling down on emerging sectors and building the institutional depth required to support them.
Montreal, for example, continues to serve as Canada’s AI flagship.
Supported by the federally funded Scale AI supercluster, the city combines public investment with academic expertise and a growing number of applied research hubs. Montreal also ranks among the leading global ecosystems in cleantech and life sciences. Its location in Québec gives it additional leverage from clean energy leadership and a growing network of Innovation Zones focused on aerospace, quantum technologies, semiconductor manufacturing, and advanced transportation.
Vancouver ranked #36 globally and the city is becoming a quiet leader in AI readiness. It placed #4 globally in Startup Genome’s AI-Native Transition Index, a new metric that assesses an ecosystem’s alignment with AI-era startup formation and scaling.
While its overall funding volumes may not rival Silicon Valley or London, Vancouver’s strategic positioning suggests that it is preparing for long-term relevance.
The report also tracks changes in Ecosystem Value across time.
From the second half of 2020 to the second half of 2024, global value dropped by 14% on average. Toronto and Vancouver were close to that mark. Montreal dipped slightly below. Calgary, however, posted a 13% increase, making it one of the few cities in North America to grow during this period. Edmonton declined by 11%, which still beat the global average.
These shifts may not grab the same attention as rapid jumps in newer ecosystems like Shenzhen or Philadelphia, but they reflect a different kind of momentum. Canada’s top hubs are not chasing short-term growth. They are playing a long game, one grounded in specialized sectors, long-standing partnerships, and infrastructure that supports innovation through cycles.
Playing the long-game
One challenge Canada faces is that affordability and policy alignment alone may not be enough to propel Canadian ecosystems into global leadership. The report notes that AI-era success will depend on access to top talent, infrastructure, and capital — areas where Canada remains competitive but not dominant.
As other countries pour funding into frontier sectors, Canada’s measured pace could risk falling behind unless early coordination translates into stronger outcomes.
Outside of AI funding, one of the most consistent findings across Canada’s ecosystems is affordability.
Montreal ranks in the top 30 globally for Affordable Talent. Calgary and Edmonton both place in the top 10 in North America. Calgary also made the top 15 for “Bang for Buck,” a GSER metric that compares early-stage funding levels with the cost of technical talent.
This matters because startups, and the investors who support them, are increasingly cost-conscious.
Global venture funding has slowed, but value-driven ecosystems that stretch capital further are becoming more attractive. Founders can hire talent more easily. Teams can operate with longer runways. Investors can take calculated risks without the inflated burn rates that characterize larger cities.
And affordability is not Canada’s only advantage — the country also benefits from a culture of collaboration and policy coordination.
Federally funded programs like Scale AI and regional efforts from agencies such as Alberta Innovates or Investissement Québec help align local efforts with national strategies. These organizations support with grants, but also help define sector priorities, connect startups to researchers and institutions, and build momentum that transcends individual companies.
The GSER emphasizes that the transition to an AI-native economy will not be driven by research alone. Startups will lead the way, and ecosystems that support AI-native firms with funding, talent, and infrastructure will be best positioned to grow new jobs and anchor long-term industries.
Canada has not yet captured a dominant share of global AI funding, but its early investments and regional coordination suggest that it is laying the groundwork.
A foundation for what comes next
Canada’s startup ecosystems are not monolithic.
- Toronto-Waterloo leans into enterprise software and financial technologies.
- Montreal pairs AI research with cleantech innovation.
- Calgary is betting on fintech, cleantech, and agtech.
- Edmonton has growing strengths in data, life sciences, and AI.
- Vancouver’s focus on life sciences and transition tech gives it a complementary role.
What ties them together is not one industry, but a shared model: affordable, globally educated talent. They have stable institutions that support innovation beyond hype cycles, and an openness to global markets. There is also a growing emphasis on building future-focused sectors that reflect Canada’s resource base, research capacity, and policy ambitions.
This year’s GSER does not crown Canada as a breakout performer, and the country’s ecosystems face headwinds in attracting top-tier global investment. But the data shows the country weathered the storm better than most.
Startup ecosystems unpacked
Digital Journal has published in-depth coverage of the 2025 Global Startup Ecosystem Report, including key findings and local analysis. Explore:
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