Among Canadians in Silicon Valley, talk of a trade war has a techno-optimist spin – The Globe and Mail

At a historically tense moment in Canada-U.S. relations, a group of Canadian innovators has assembled in San Francisco … to make pasta.

It’s a Monday in early February, the day U.S. President Donald Trump has issued a 30-day reprieve on his two-day-old decree to impose sweeping tariffs on Canadian goods. It’s also opening night of a summit for Canadian technology entrepreneurs in America’s innovation epicentre.

As heavy rains roll into the Bay Area, the C100, a San Francisco-based organization that connects Canadians working in tech here together with their peers back home, is hosting a team-building group cooking class in the Mission district ahead of two days of networking, fireside chats and panels.

Featured speakers include some of the most accomplished Canadians in Silicon Valley – Cloudflare, Inc. co-founder and president Michelle Zatlyn, Xero Ltd. CEO Sukhinder Singh Cassidy, Roblox Corp. CEO and founder David Baszucki – plus leaders of established Canadian-based innovative companies including Knix Wear Inc., Clio and PointClickCare Corp. The C100’s goal is for tech entrepreneurs from Canada – who make up more than two-thirds of the 150 attendees – to meet and learn from their countryfolk who have prospered in nearby Silicon Valley.

But first, they’re learning how to make real dough – the flour-and-water kind. The aproned tech crowd, channelling their inner Giada De Laurentiis, are creating their own supper, guided by the expressive hands and booming baritone voice of Chef Gino Campagna. He instructs them how to turn their handmade dough into cavatelli. The best way, he says, is to use their thumbs to curl nuggets of dough on the ridged wooden paddles before them. Don’t worry if the resulting shells aren’t perfect, he says: “Every cockroach looks beautiful to its mom.”

The convivial banter is standard fare for corporate ice-breakers and a clever way to get people chatting as they work away, elbow to elbow on either sides of long tables. It’s part of a renewed effort by the 15-year-old C100, born at a time when Canada’s tech scene was struggling, to reassert its relevance and utility to a bumper crop of companies up north who have reached decent sizes.

But the jarring geopolitical backdrop makes the timing of the C100 event “a bit surreal,” Clio CEO and co-founder Jack Newton says the following day, and C100 executive director Michael Buhr acknowledges the dissonance. “It’s phenomenal to have this group of people here, given everything that’s going on right now between Canada and the U.S., and whether there’s tariffs or no tariffs,” he tells the group at the outset of pasta night. The summit’s goal is “to celebrate and really double down on entrepreneurs within Canada” and spark economic activity at home. “If it’s any group that can do it, it’s this group here.”

Few other Canadian sectors are as dialled in to a nation whose president has declared economic war on their homeland. Canadian innovators are largely financed by Americans. Their customers are mostly American, as are some of their executives. The San Francisco Peninsula, which includes Silicon Valley, is their Mecca. They are building the kinds of companies Canada needs more of to lessen its reliance on the trade of traditional physical goods threatened by tariffs – but these purveyors of digital products are every bit as reliant on U.S. markets as softwood lumber and steel producers.

“Most companies here don’t think there will be any impact on them” from tariffs, says Mike Wessinger, executive chairman of PointClickCare and C100 co-chair, “but they do wonder what’s next” if the U.S. applies more pressure on Canada. He takes Mr. Trump’s talk of turning Canada into the 51st state seriously.

Adding to the peculiarity of the week is the fact the summit is happening at the local Four Seasons Hotel, which has a Canadian flag above its Market Street entrance denoting the parent company’s heritage, like a defiant, if posh, stronghold behind enemy lines.

The participants here are proud Canadians and many are as upset as fellow citizens who’ve been booing the Star-Spangled Banner at hockey games. “It’s all very strange when you think about the ties and the joint economic prosperity that’s potentially being significantly impacted without seemingly any rational justification” says David Wismer, Bank of Montreal’s global head of technology investment and corporate banking who is based in Toronto but spends half his time in the U.S. “But you’re a patriot first. It makes me question, to be honest, do I want to be down here that much any more? If I was at one of those games I’d absolutely be booing as well.”

It’s a tricky situation for Canadian tech CEOs to navigate the widening geopolitical rift – particularly as the threat of tariffs doesn’t (yet) directly affect their sector. “All the CEOs we’re talking to are thinking, ‘What are the immediate impacts to my business, and what are the long-term implications’” related to revenue and fundraising, says Michelle Scarborough, managing partner of the Thrive Venture Fund and Women in Technology Venture Fund for Business Development Bank of Canada, a C100 sponsor. “We don’t know where the puck is going to go next.”

And as they try to stickhandle through the volatility, some worry about growing cross-border ill will, especially if Canadians show too much belligerence toward Americans. “There is an emotional reaction to feeling like your best friend has punched you in the face – and it hurts. But we must be very careful what the next reaction is,” says Jason Smith, CEO of Vancouver-based business intelligence software maker Klue Labs Inc. “Obviously no Canadian wants us to be the 51st state. That’s going to ring the biggest emotional bell a Canadian would have. But my biggest fear is losing the goodwill of the American people. When you start booing the American anthem, I think we can get ourselves in hot water in the court of opinion with Americans.”

Says Mr. Wismer: “We don’t want to lose sight of the long game. They are an attractive and lucrative trading partner, next to us. It’s the world’s biggest market. We have to figure out a way to continue to take advantage of that.”

For many tech leaders, the default state of mind is optimism. That is evident at the C100 summit. Many here believe Mr. Trump is using the threat of tariffs and entreaties for Canada to join the U.S. as negotiation tactics. Ms. Singh Cassidy, who grew up in St. Catharines, Ont., lives in the Bay Area and leads a New Zealand-based company, says while she’s sad about the state of Canada-U.S. relations, “I also believe that America is a capitalist country and understands economies well and understands it has big trading partners. There are commercial realities and opportunities that ultimately will come back to important drivers of getting a deal done.”

Many here see the geopolitical turmoil creating opportunity. Several invoke the Winston Churchill quote, “Never let a good crisis go to waste.”

“Sometimes it takes a bit of instability to bring people together to really talk about some of the challenges they’re seeing,” says Joanna Griffiths, founder and CEO of Knix, the innovative Toronto-based undergarment maker. Michelle Moon, a Silicon Valley-based venture capitalist who moved here from Canada in 2017, says: “It’s a healthy time for Canada to think, ‘Okay, instead of just reaping the benefits of being a neighbour to the U.S., how can we as a country become more competitive?”

“This trade crisis is an opportunity for Canada to sharpen focus on our global competitive advantages in technology, rather than relying so much on basic U.S. trade,” says Anthony Lee, a Silicon Valley-based venture capitalist and C100 co-founder who brings a MAGA-styled red ball cap to his on-stage session that reads “Canada is already great.”

Canadian companies, he says, are already world leaders in software, artificial intelligence, gaming and quantum computing. “We can have abundant clean energy to power AI data centres. For me as an expat, times like this make me feel even more excited to be Canadian.”

But few are as positive as Martin Basiri, an ebullient, Iranian-born dual Canadian-American citizen who is building his latest company, Passage Inc., in Canada after leading ApplyBoard Inc., one of the country’s largest startups. He’s heartened by recent talk about the need to bring down interprovincial trade barriers that have persisted for decades and that political leaders seem focused on solving, plus a shift in attitudes favouring the construction of an east-west pipeline and liquefied natural gas terminals to transport Canadian fuel overseas.

“I think we should all thank Donald Trump for what he did,” Mr. Basiri says in a declarative voice during a conversation in the hotel lobby. “For the first time, government is like, ‘Let’s care about us.’ This is Team Canada winning.”

It’s a notable turn to see tech entrepreneurs cheer on their political leaders, although it will take more than techno-optimism and rallying cries to offset a deep recession at home if tariffs materialize.

Many of these same CEOs and others in tech have soured on the Liberal government for a largely failed innovation agenda, for overspending while presiding over a chronically sluggish economy – and for last year’s now-delayed move to increase taxation on capital gains.

They are looking for the next government to not just reach a deal with Donald Trump – but to lower taxes and adopt more business-friendly policies to encourage highly mobile tech companies and founders to stay and build in Canada. “Whoever is going to be our next prime minister has to get on top of this, because there are a lot of risks to our incredible momentum and progress,” says C100 member and author Mandy Gilbert, who runs Creative Niche, a Toronto-based digital talent recruitment company.

The tariff threat “has been a wake-up call, realizing what a crucial partner the U.S. is to Canada and how crucial the relationship is to maintain, but also how exposed Canadian companies are to what might be a very political situation,” Clio CEO Jack Newton says.

Mr. Wessinger believes that with inadequate government attention to promoting economic growth and competitiveness up to now, “We’ve left ourselves extremely vulnerable in a meaningful way. If you want to be competitive and attract the best talent and best companies, you have to be competitive. And we haven’t had a government that has adopted policies that allowed us to be competitive.” He worries that talent is already heading south to start companies that could have been Canadian, which used to be the default path for entrepreneurs before Canada’s tech renaissance in the 2010s. It’s little comfort these could be future Valley-based C100 mentors. “You won’t find the next PointClickCare or Clio” in Canada, he says. We’re not losing these companies. They’ve just never showed up here.”

But as some look hopefully toward the future, several attendees are also contending with immediate consequences of Mr. Trump’s tariff threats within their companies. Their internal Slack channels have lit up with outrage from Canadian employees – which has been met with some joking retorts but also apologies, bewilderment or offence by their American co-workers. It’s created potential cross-border schisms within their corporate cultures.

“I recognize that these types of events can divide us, especially with an American/Canadian workforce,” Mr. Wessinger’s brother Dave, PointClickCare’s CEO, says in a pointed message to staff of the Mississauga-based company during the week of the C100 summit. He reminds them to stay focused on their mission – providing health care records software to senior care facilities and hospitals in the U.S. “Please continue to be kind and considerate in all that we do across the organization, both internally and externally.”

Others talk of similar frictions. Mr. Newton says “internally there is a sense of disbelief this is happening” within his company, where Canadians and American “Clions” operate as one team and regard the border as “an intellectual artifact.” Mr. Smith says for his employees at Klue, “It’s a highly emotional issue” among staff, which is made up of Americans and Canadians. His American employees have been respectful and empathetic, even apologizing to Canadians on Klue’s Slack channels about what is happening, he says. But “the other end of the spectrum, on the Canadian side, is anger, defensiveness, pride, and the feeling like, I’ve got to stand up and fight” among some staff, although a business-first mindset continues to prevail, he stresses.

It’s created an immediate dilemma with financial implications for Alison Taylor and Trevor Johnston, the co-CEOs of Jane Software, a thriving, profitable North Vancouver-based provider of software to clinic operators. They’ve booked a resort in Palm Springs for a company retreat in May.

Employees were excited about the California desert destination when they arranged the getaway months ago, Ms. Taylor says after the first day of the summit. “But now we’re having a lot of knee-jerk reactions.”

Many aren’t happy about travelling to the U.S. given recent events. It’s even more acute for some of the roughly 20 per cent of employees who identify as LGBTQ, Ms. Taylor says. Some fear they could be harassed or profiled at U.S. customs after the Trump administration targeted transgender and non-binary people with executive orders last month.

Jane is looking into its options. It’s too late to book another location for a 600-person event and cancelling outright – something they have looked into – would leave Jane $250,000 out of pocket. They are considering chartering private jets to fly in some hesitant employees, or transforming the event into a customer conference.

Most corporate decisions “feel really easy for us,” Ms. Taylor says in a memo to staff later that week. This one has “a lot more complexity.”

As it turns out, the C100 event couldn’t be better timed. During her fireside chat at the summit, Ms. Singh Cassidy talks about how her accounting software company has continued to expand globally while contending with its strong identity as a New Zealand-based enterprise. The Xero team, Ms. Singh says, is proud of its roots, people and customers – but also working to embrace a global mission and, as she puts it, export New Zealand values to the world.

Hearing that inspires Jane’s co-CEOs. “We’re a Canadian-founded and based company, but we’ve grown into a global organization with team members and customers all over the world,” including many in the U.S. helping to deliver wellness and mental-health treatment to patients, Ms. Taylor continues in her memo. Given that employees are based in Canada, the U.S. and Britain, and some would have to cross a border no matter where Jane holds a retreat, “there is no perfect solution.”

“Anger is an emotion that pushes us outward – it demands action,” she writes. Thus, Jane will proceed with the event in Palm Springs as “a form of action. Jane is – and will continue to be – a proud Canadian-founded company. But we are also a global company, and we are committed to proudly exporting Jane’s products, services and values to the world.”