Canada - Country Commercial Guide
Information and Communications Technology (ICT)

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2021-08-20

Overview

Canada’s technology sector has grown twice as fast as the rest of the economy in the last decade and now makes up 5% of Canada’s entire GDP. COVID-19 contributed to the decline of Canada’s economy, but the technology sector, while certainly not immune to the slowdown of COVID-19, has not experienced the same decline as other sectors.

The Canadian ICT sector is highly trade dependent, importing US$33.7 billion in goods and exporting US$10 billion around the world in 2020. The United States is the second largest supplier of ICT goods to Canada after China; it is the top market for Canadian ICT exports with $6.7 billion being shipped to the United States in 2020. In 2020, total imports of ICT goods were led by the provinces of Ontario (US$25.5 billion), British Columbia (US$3.6 billion), Québec ($2.8 billion), and Alberta (US$1.1 billion). The Canadian ICT market is expected to grow through 2025.

Canada has a very strong homegrown technology sector. There are over 43,200 companies in the Canadian Information and Communications Technologies (ICT) sector. The large majority fall within the software and computer services industries. The sector consists mainly of small companies, with approximately 35,500 of them employing fewer than 10 people. The number of large companies employing over 500 individuals accounts for approximately 100 firms, including subsidiaries of foreign multinational corporations.

Leading Sub-Sectors

Notable trends in the ICT sector in Canada for 2021 include:

· Cyber Security: The escalating global threat of cyberattacks is forcing companies to explore new defenses because their existing software and staff cannot keep up.

· Edge computing and IoT devices: More and more things are built with the ability to connect to the internet. Automobiles, appliances, smartphones, computers, medical devices – the list is endless. By 2022, global IoT spending is expected to hit US$1.1 trillion. The main reason is because of 5G, and Canada should have standalone 5G networks in the next 3-5 years. As IoT increases in Canada, so will the requirement for edge computing.

· Digital Transformation – Digital transformation was well underway in Canada before the pandemic but the need to adopt and develop technologies during the pandemic has given the digital sector added momentum.

· Artificial Intelligence (AI): Canada is making significant investments in AI. Following the release of the federal budget in April 2021, it was announced that Canada would give $185 million to support the commercialization of AI research. This investment is alongside plans to increase funding for the Pan-Canadian Artificial Intelligence Strategy to $443.8 million over 10 years.

· Remote Access: Continued precautions due to COVID-19 and a shift to hybrid or remote working are driving a demand for remote access.

· Remote Healthcare Technologies: Both COVID-19 and Canada’s numerous remote communities are leading to increased need for remote healthcare technologies.

Opportunities

Cyber Security: According to a global threat research project by Carbon Black, cyber security threats are intensifying in Canada, with a large majority of organizations saying they have been the victim of cyber-attacks in the past 12 months. Thus, cyber security is one of the top concerns in government and enterprise organizations in Canada. Canada is now operating under the National Cyber Security Strategy. Released in 2018, National Cyber Security Action Plan (2019-2024) (NCSAP) provides funding for cyber security and outlines its implementation. Funding commenced in 2018 with US$382.6 million over 5 years, and US$82 million ongoing. This strategy comes as a response to the increase of cyber-attacks on government agencies and private corporations in Canada. New investments will allow Canadians to benefit from digital connections in a way that protects them and Canada’s digital infrastructure from cybercrime. These investments could also lead to significant purchases by the government.

Edge computing (and IoT devices): Investment in centralized processing power will continue to grow in the foreseeable future, but to improve network performance and resource availability, edge computing and IoT may skyrocket in 2021. An IDC report expects ubiquitous IoT to be the new normal for 2021 with enhanced node and privacy benefits. From sensors to smart homes, IoT devices are expected to grow alongside edge computing. As per a McKinsey report, investments in IoT technology are projected to grow at 13.6% per year through 2022. Security will be a key part of IoT growth.

Artificial Intelligence (AI) – While Artificial Intelligence has been trending for the last decade, the use of AI combined with the real-time response and hyper-connectivity of 5G, is reinvigorating the possibilities for AI. AI is currently being implemented in a variety of industries to better predict demand, resource utilization and behavioral patterns but as AI gets closer to real-time data analysis, personalized needs will be met faster.

Healthcare Technologies: In 2019, fewer than one in 10 family physicians allowed patients to book appointments electronically, fewer than 25% made themselves available by email, and just 4% provided video visits. The pandemic has now forced both providers and regulatory bodies to turn to alternative ways of providing healthcare while limiting exposure to the virus. The demand for telehealth systems has boomed as a result, allowing the sector to finally execute on some of its long-awaited benefits. In addition, Covid has increased the need for technologies to help support their employee’s mental health. Canada will look to improve current infrastructure, hardware, software, and high-speed bandwidth both across the country and within private residences which will significantly reduce the technological impediments to both providing and receiving virtual care.

Resources

Major Events and Trade Shows in Canada

· Big Data x AI Toronto Conference, Toronto, Ontario, October 13-14, 2021

· SECTOR, Toronto, Ontario, November 3-4, 2021

· The 20th Canadian Telecom Hybrid Summit, Toronto, Ontario, November 15-17, 2021

· World Summit Americas 2021, Montreal, Canada, May 4-5, 2022

· Collision Conference 2022, Toronto, Ontario, June 20-23, 2022

Strategies and Reports

· Canada’s Digital Government Strategy

· Policy on Service and Digital

· Directive on Services and Digital

· Government of Canada Strategic Plan for Information Management and IT (2017-2021)

· National Cyber Security Action Plan (2019-2024)

Industry Associations

· Canadian Advanced Technology Alliance

· Information and Communication Technology Council

· TECHNATION

Commercial Service

For additional information on this sector, please contact Commercial Specialist Tracey Ford at Tracey.Ford@trade.gov or by phone at (613) 295-4235.