Overview

Canada’s medical device industry is highly diversified and primarily comprised of small and medium-sized enterprises (SMEs).  The primary activities include research and development of medical, diagnostic, and therapeutic apparatuses, as well as the manufacturing and regulation of these devices.  In 2022, Canada’s medical device market size was estimated to be US$6.8 billion.   The market is expected to grow by 5.4% annually until 2028.  In 2022, total healthcare spending in Canada totaled approximately C$331 billion or C$8,563 per Canadian. 

In the Canadian healthcare system, the federal government is responsible for setting and administering national standards for the health care system through the Canada Health Act while provincial and territorial governments are responsible for the management, organization, and delivery of healthcare services for their residents.  Provinces and territories receive federal health funding primarily from the Canada Health Transfer (CHT), where they negotiate with the federal government as to how much money they are given and how it should be spent. Money is given on a (fiscal) yearly basis.

Table: Health Spending per Person by Province in Canada, 2022

The COVID-19 pandemic increased demand for devices to diagnose and treat COVID-19 and decreased demand for some devices used in non-COVID-related procedures.  Other factors that impacted the industry this past year included global medical device supply chain disruptions and changes in regulations to allow for the speedy authorization of devices to address COVID-19.   In addition, medical devices are experiencing an increased demand due to the rise of chronic disease and an aging population.  In 2022, 19% of Canada’s population was age 65 or older.  Statistics Canada forecasts that this trend will continue and reach approximately 22.5%. 

The Canadian market presents significant opportunities for U.S.  exporters of medical devices, with the United States being Canada’s largest trading partner for this sector.  Total imports of medical devices satisfy approximately 70% of domestic demand.  In 2022, the United States was the largest exporter of medical devices into the Canadian market, totaling US$3.2 billion, representing 42.6% imports in this sector.  China was the next largest exporter at US$650 million, representing 8.61 percent.  Total imports were up from 2021, signaling an upward trend in Canadian medical device imports most likely induced by increased post-pandemic demand.

Canada’s mixed public-private healthcare system is comprised of the public sector, which finances healthcare services and the private sector, which delivers these services.  Procurement is mandated differently by each province.  Provincial governments across Canada are currently implementing or exploring changes to healthcare procurement – including centralization initiatives. 

U.S. exporters need to be aware that all medical devices are regulated by Health Canada’s Medical Device Bureau of the Therapeutic Products Directorate and governed by Canada’s Food and Drugs Act and Medical Device Regulations.  Under these laws, all medical devices are categorized in four classes and manufacturers for class II, III, and IV need to hold a Canadian Medical Device License (MDL) and be certified through the Medical Device Single Audit Program (MDSAP) to maintain a medical device license.

Best Prospects

The key product and services segmentation of the industry are cardiovascular and respiratory devices which make up 22.3% of the market, followed by surgical devices (19.4% and industrial diagnostic devices (18.1%), spinal devices (11.7%), and diabetes monitoring devices (6.3%).

Opportunities and Trends to Consider

Opportunities in the healthcare industry concerning medical devices are being led by macroeconomic environmental trends.  The six macro trends to take into consideration are demographic, economic, political, ecological, socio-cultural, and technological.  In terms of demographics Canada has an aging population, which provides an opportunity to focus on medical devices to aid older population groups.

Important economic trends include high inflation and supply chain issues, which allow U.S.  companies to increase exports to Canada due to geographical proximity.  Canadian medical device companies are therefore anticipated to increase their reliance on strategic alliances and outsourcing for marketing, distribution, research, and manufacturing activities. 

In a post-pandemic environment, however, the aftermath of the economic strain put on the healthcare system has decreased public spending ability.  Politically, with an increased focus on health, there are stricter regulations and best practices for healthcare products.  Canada’s changing ecological environment is also essential when considering population movement and the geographical area to invest in medical supplies distribution.

For Canadians, health and well-being is a top priority.  U.S. medical device companies will have to consider these cultural changes when designing medical devices.  Finally, advances in technology, including a larger focus on data analytics and artificial intelligence (AI), will change where public investments are directed and allow the standards of diagnostic medicine to evolve.

Procurement     

Hospitals and other health care providers in Canada can procure their equipment, supplies, and services individually or as part of group purchasing (GPO) or shared services organizations (SSO).  Hospitals alone account for an estimated 26.4% of total healthcare spending.   Ontario and Québec account for most of the industry: 29.3% of the country’s hospitals are in Ontario and 17.7% are in Québec significant buyers include medical professionals, such as dentists, eye-care specialists, and other professionals in nursing homes and residential care facilities.  Private clinics and outpatient facilities are also experiencing a growing demand for medical equipment, including devices, instruments, and supplies.

In terms of business concentration of medical devices, Ontario and Québec naturally lead as well, with 46.8% and 22.3% of the industry, respectively.

Healthcare systems in Canada use various competitive tendering processes for the procurement of medical devices and equipment.  U.S. suppliers looking to export to Canada should refer to the individual provinces’ tendering websites for information concerning procurement opportunities available in each province.  (See link under Resources below)

Labeling and Language Requirements

Depending on sales location, medical devices sold in Canada may be labelled in either English or French.  Québec has increasingly strict restrictions surrounding labeling and the use of French that U.S.  exporters should consider when deciding where to invest.  These restrictions, however, have a key exception for medical products in Article 6 of the Regulation Respecting the Language of Commerce and Business in Québec’s charter of the French Language.

According to this exception, an inscription on a product from outside Québec to be used for medical, pharmaceutical, or scientific purposes or an inscription on the container of such a product may be exclusively in a language other than French provided that the French version of the inscription appears on the wrapping of the product or on a document supplied with the product and either of the following conditions is met: (1) the product is not offered in Québec for retail sale and no equivalent substitute presented in French is available in Quebec; or (Québec product weights 100 g or less or its container has a capacity of 10 cm or less or 10 ml or less.

Virtual Care and Digitalization

The Canadian telehealth market was experiencing steady growth before the COVID-19 pandemic, and the market is currently growing at 35% per year due to the need for offering healthcare services to rural communities and to the subsector becoming increasingly mainstream.  One risk to providing virtual care is the lack of compatibility across provinces, so the difference in regulation between geographic areas must be considered when designing and exporting to Canada.   

With macroeconomic trends, like advanced technologies and AI, digital medicine is a sub-sector of the healthcare industry that is experiencing substantial growth.  Digital medicine includes the production of medical devices that combine hardware and software to measure, intervene, and diagnose medical ailments.  Digital software aims to innovate the medical experience by targeting three segments of healthcare.  First, it aims to create a flow of data that can give high-speed results to patients and doctors, both in and out of medical facilities.  Second, digital medicine aims to be non-human readable technology, producing algorithms to run on large samples of data that cannot be analyzed by a medical professional.  Third, examining genomic sequencing and future predictions of abnormal heart conditions.  Lastly, digital medicine aims to share medical diagnoses with some room for doctors to correct false positives/negative data in real-time.  Digital medicine devices, depending on the function of the product, could be classified under diagnostic apparatus or patient aid services which are leading sub-sectors.

The larger environmental trend of personalization within products is also affecting the healthcare industry.  Utilizing data analytics and AI will allow medical devices to be more personalized and accurate to the individual patient.  These advances in technology are due to an increased public and private investment to drive predictive, preventative, and personalized medicine.

Resources

Major Events and Trade Shows in Canada

• Canada’s Medtech Conference, (dates for 2024 TBC)
• E-health Annual Conference and Tradeshow, May 26-28, 2024, Vancouver, BC
• FIME, June 19-21, 2024, Miami, Florida

Canadian Government

• Canada’s List of Tendering Sites by Province:   Tendering Sites:
• Health Canada – Safe Medical Devices Canada
• Health Canada – Software as a Medical Device (SaMD)

Commercial Services Contacts

For additional information on this sector, please contact Commercial Specialist Connie Irrera at Connie.Irrera@trade.gov or by phone at (514) 908-3662 or cell (514) 592-7871.