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How Canada Has Underestimated the Size of Its Technology Sector


Last Updated on August 27, 2016

Canada has significantly underestimated the size of its technology sector and the crucial contribution it makes to its economy, according to a new report.

Canada has significantly underestimated the size of its technology sector and the crucial contribution it makes to its economy, according to a new reportPreviously the tech sector has been measured only as those firms directly involved in the information and communications technology (ICT) industry.

But with technology now a key component of all businesses, from manufacturing and pharmaceuticals to engineering and design, Canada’s tech sector is now a growing behemoth that contributes more to the economy than the finance industry.

This are the conclusions of a report titled ‘The State of Canada’s Tech Sector’ produced by the Brookfield Institute for Innovation and Entrepreneurship.

The eye-opening conclusions of the report can be summarized as follows:

In 2015…

  • The tech sector was directly responsible for $117 billion or 7.1 per cent of Canada’s economic output, greater than that of the finance and insurance industry.
  • 864,000 Canadians were employed in the tech sector, which made up 5.6 per cent of Canada’s total employment.
  • At over $9.1 billion, the tech sector was by far the largest private sector investor in research and development.
  • The tech sector was also comprised of nearly 71,000 firms that year, representing 6.1 per cent of all Canadian businesses.
  • Tech sector employees earned approximately $67,000 a year, compared to the national average of nearly $48,000.

The report brings into sharp focus the need for immigration policies that facilitate access to highly-skilled foreign talent to allow the tech sector to continue on its growth path.

Immigration Minister John McCallum has publically stated the current government target of six months for bringing in skilled workers is far too long for tech companies with immediate needs.

Waiting six months can be the difference between success and failure for a technology start-up, often competing against rivals in the field to capitalise on new, cutting-edge techniques.

Liberal Ministers on Bringing in Tech Talent

“We have all heard too many horror stories of agile companies facing challenges when trying to bring in bright new employees to support business growth and opportunities. Highly skilled workers, researchers and entrepreneurs should be welcomed in Canada in higher volumes and at a faster rate than other OECD countries.”
Bardish Chagger, Small Business Minister

“Their idea of a quick processing time is more like six days rather than six months (current target). Six days would be a stretch. But at the same time … we want to open our doors to the best and the brightest … so, obviously, I will be working very hard to try to accommodate their needs as best I can.”
John McCallum, Immigration Minister

(When asked about fast hiring of skilled tech workers) “That will be a key component … We want to make innovation a national priority.”
Navdeep Bains, Minister of Innovation, Science and Economic Development

McCallum has made the speeding up of this process one of his priorities in a Liberal overhaul of the immigration system, details of which are expected in the fall.

One of the key issues is with the Labour Market Impact Assessment (LMIA), a measure introduced to assess whether a suitable Canadian is available for the position being advertised.

The LMIA works well when it comes to the Temporary Foreign Worker Program, and also in certain areas of the Express Entry system, but not for technology firms with acknowledged shortages who need people from outside Canada with relevant advanced skill sets.

Carl Rodrigues, CEO of Mississauga software company SOTI, recently described Canada’s immigration policies as ‘archaic’ and called on the government to make changes to help companies grow.

Vancouver tech investor Boris Wertz agreed, saying companies need immigration programs that help them aggressively recruit talent from the US and other competing nations.

The Information and Communications Technology Council predicted recently that by 2019, 182,000 high-paying Canadian technology jobs would be vacant.

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