Shopify Changed How Ottawa Works: DAN STANKOVIC

After launching in 2006 originally under the banner of Jaded Pixel Technologies, Shopify has transformed into a global e-commerce giant.

It has reached a total revenue of $8.9 billion U.S. in 2024, an increase of almost 58 per cent from 2022 and 300 per cent  more than 2020 At the end of 2024, Shopify had approximately 8,100 employees worldwide compared to 3,000 inn 2017 (but down from 11,600 in 2022).

Shopify’s amazing growth has reignited excitement around Ottawa’s high technology sector not seen since the Ottawa’s Golden Age of high technology growth during the 1980s and 1990s – a time with the city was truly the Silicon Valley of the North.

Most of the high fliers of the Golden Age are no longer around except for a handful of companies such as Mitel and Corel that have been acquired by U.S. corporations and private equity firms. Shopify, the name, is an amalgam of shop and simplify. During its early years, it was no different from past start-ups. The company faced periods of turbulence and fear of insolvency intermixed with optimism and excitement about its future business opportunities.

Tobias Lütke, Shopify’s founder, was not very successful in his first start-up business, selling snowboards online out of a coffee shop on Elgin Street. Michael Cowpland and Terry Matthews failed at selling lawnmowers out of their garage before they began with the new company Mitel. Many earlier technology companies were also started by immigrants from Great Britain to the Czech Republic. Lütke immigrated from Germany in 2002.

There is, however, one significant difference between Shopify and most other Ottawa start-up companies and entrepreneurs which eventually would have significant impact on the company’s future in Ottawa.

The majority of companies have established in Ottawa because of the presence of the federal government (e.g. procurement of goods and services, R&D support, technology transfers etc.) or were spin offs from companies such as  Nortel and other anchor companies. Shopify did not depend on the federal government for business nor did Lütke work for another local firm although he did have a brief stint as remote worker for a German company when he came to Ottawa.

Lütke’s decision to move to Ottawa was largely influenced because his future wife, Fiona McKean, who he met on a ski trip in British Columbia, came from Ottawa and attended Carleton University eventually landing a job with Global Affairs downtown. Otherwise, Lütke could have just as easily started Shopify in Toronto or Montreal or any other large city in Canada and elsewhere.

However, Ottawa did offer some important locational advantages. The city was close to Canada’s major metropolitan centres of Toronto and Montreal with a population of around 15 million people within the corridor representing a large pool of potential qualified, skilled workers. Ottawa itself had around 1,500 technology companies in 2018 and the high per-capita concentration of scientists and engineers in Canada. Shopify was also close to several universities where high potential employees could also be recruited through internships and campus visits.

Lütke also wanted to locate in the downtown area favouring it over suburban Kanata where there was a large cluster of high-technology companies. Downtown was more representative of Shopify’s style and offered the amenities that would appeal to the company’s young workers. Shopify’s office space in the downtown at Performance Court on Elgin Street and Plaza 234 on Laurier Avenue West was also retrofitted to create inspiring space and a fun place to work.

The COVID-19 pandemic began in 2020 and was a key transformation year for Shopify. When Lütke announced that “office centricity is over” and that Shopify was then working remotely, entering a new corporate Digital by Design phase. Even the company’s press releases changed the location of Ottawa’s headquarters to “internet, everywhere”. Shopify’s files with the United States Securities and Exchange Commission stated that “while we consider the Company’s location to be the internet, our registered office is 151 O’Conner Street, Ground Floor, Ottawa”.

Lütke moved to Toronto from Ottawa in 2023 where Shopify had already some offices. It’s main 180,000 square feet office is located at The King Portland Centre downtown. The company had also planned to lease another nearby 254,000 square feet (with an option to expand to 434,000 square feet) of new office space at The Well in 2022 but the move was cancelled because the shift towards remote-work removed the need for more space. Meanwhile, in Ottawa, Shopify emptied its 170,000 square feet trend-setting office space at 150 Elgin St. in 2020, a decision in line again with its shift to remote work. Its operations were shifted to 325,000 square feet office space at 234 Laurier-151 O’Connor.

Shopify’s remaining office spaces, at least in Ottawa and Toronto, do not function in the more traditional way of providing designated work stations for individual workers. Instead, they are now designed for “bursts” where staff can come together for communal gathering spaces, collaborations and brain-storming or strategizing sessions as well as recruitment hubs.

Most current Shopify executives were also not in Ottawa with many scattered through the United States. Shopify’s president, Harley Finkelstein, returned to Montreal in 2022 where he previously lived before joining the company in 2010. He stated in Fortune magazine that “office life no longer provides competitive advantage” and that “work should be built around mission, not headquarters” echoing Lütke’s proclamation that “office centricity is over”.

He added that “Shopify has transcended its Canadian origins and doesn’t need to be tethered to any one geographic spot” noting that “Canada [Ottawa} was a great place to start, but we very much see ourselves as a global company”. In 2019, Finkelstein published a “love letter” in an Ottawa Citizen article stating that his family will live in the city “for the rest of our lives.” But he did also write that the city overall does display a risk-aversion culture to new ideas and change preferring instead to maintain the status quo which in turn limits entrepreneurs in achieving full potential. In comparison, Finkelstein recently described Montreal after his move as the “most entrepreneurial city on the planet.”

Looking at Shopify’s corporate and business transformation from a struggling start-up company into a global e-commerce giant, one can only conclude that the 2020 decision to become a total Digital by Design enterprise based on remote work has altered the company’s influence on Ottawa’s economy. Even though there still exists a strong presence of Shopify workers and office space in downtown Ottawa where the head office is still located, the company’s centre of gravity is now in Toronto.

However, it would be a mistake to think Shopify’s reduced business presence in Ottawa is the result of the city’s, and in particular, downtown’s weakening economic competitiveness or the inability of the local economy to sustain growth in the high-technology sector. Shopify’s transformation from a place-based, office-centric company to a fully remote enterprise represents the post-pandemic breakdown of the traditional office model and of the relationship between economic activity and physical space as well as between companies and employees.

Such changes revolve around the future of the office and the future of the workplace in a new economy which will have profound implications about how we think about real estate, economic growth (downtown and throughout the city) and urban development.

Unfortunately, the City of Ottawa seems to be stuck inside a bubble when it comes to planning the future of the city.

Dan Stankovic is an Ottawa consultant and former municipal public servant in economic development and housing.

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