Information and communications technology to Canada

(Last updated: 12 Jul 2007)

Trends and opportunities

The market

In order to remain competitive in the North American information and communications technology (ICT) market, and as a response to the growth of the US innovation hotspots of California’s Silicon Valley and North Carolina’s Research Triangle, seven Canadian regional hubs are growing fast. Leading the pack are:

• Ottawa’s burgeoning telecommunications cluster, home to JDS Uniphase, Nortel Networks, Newbridge - now part of Alcatel SA, Mitel and others.
• Wireless data strengths of Calgary and Vancouver.
• Internet applications and software development expertise of Toronto, Waterloo and Halifax.
• Montreal’s prowess in e-commerce services, telecommunications and multimedia are positioned firmly on the North American ICT map.

E-commerce:

• Canada’s sophisticated infrastructure, highly connected population and early Internet policy initiatives positioned the country as second to USA in its share of global e-commerce revenues.
• Connectivity levels are high and improving among Canadian business - 66 per cent of businesses have high-speed Internet access and 35 per cent have websites.
• The sales received over the Internet have have soared by 40 per cent in 2003 to Can$19.1 billion.
• Business-to-consumer represented Can$5.1 billion.
• A large percentage of sales was concentrated in four sectors - manufacturing, wholesale trade, transportation and warehousing, and retail trade.
• Approximately 18.2 per cent of private sector firms use the Internet for procurement.
• Canadian e-business clusters experience shortage of early stage venture capital, but this situation is improving steadily.

Software products and computer services:

• Canada has leading products in the fields of graphics, document management, enterprise resource planning, customer relationship management, supply chain management, cryptography and various tools.
• There are strong vertical markets (eg. financial services, retail systems).
  The industry consists of 16,216 firms, 93 per cent of which have revenues less than Can$2 million.
• Outsourcing is expected to be the leading growth sector (16 per cent annually), followed by application software (19 per cent), and professional services (18 per cent).

Multimedia:

• The multimedia industry is concentrated in Ontario (40 per cent of firms), Quebec (28 per cent), and British Columbia (13 per cent).
• Most operators are small businesses, with about half of these employing less than 10 people.
• The business sector accounts for 50 per cent of revenue, with education at 20 per cent, residential at 13 per cent and government sales at 10 per cent.
• Growing broadband capacity is driving demand for animation and web-based graphics. Canada is home to world-class animation and graphic design schools, such as Sheridan College.
• Online marketing is gaining popularity as e-commerce opportunities grow.

Internet:

• Canada has more Internet users per capita than any other country in the world.
• Over 800 of country’s Internet Sservice Providers are consolidating.
• Canadians are moving towards high-speed and free-dial Internet access and both are growing at over 100 per cent annually.
• 64 per cent of Canadian households have Internet access at home.
• 65 per cent (4.4 million) households with Internet connections at home use high-speed Internet: cable - 61 per cent, DSL - 39 per cent.
• Wireless Internet is being adopted.

Telecommunications and networking equipment

With approximately half of the world’s networking equipment market share, Nortel Networks is the leading Internet technology provider in Canada and a global leader in networking equipment. Canada has the world’s leading capabilities in:

• Network equipment (ie. high capacity broadband switches, network management applications)
• Fibre-optics (JDS Uniphase)
• Enterprise equipment (ATMs)
• Wireless equipment manufacturing (Research-in-Motion)
• Opto-electronics
• Semiconductor design
• Computer-telephony integration and others

Opportunities

Canada is positioned both to become a ‘springboard’ to the USA and an important market in its own right. It has well-developed financial markets, low business costs, sophisticated technological infrastructure and a highly educated workforce, which provide Australian companies attempting to do business in North America locational advantages. Stable and growing economy and rapid development of geographic technological clusters are drivers of demand for imported products and services.

Specific opportunities for Australian ICT companies exist in:

• Most of the vertical markets (eg finance, education, mining)
• Wireless and satellite technologies
• Outsourcing
• Telecommunications and network software
• Software tools
• Knowledge-based tools
• Imaging systems
• GIS
• Software applications

Tariffs, regulations and customs

Each product is being judged on its own merits. French and English labelling required for most products.

There are no quotas on Australian products.

Industry standards

Electric current is AC 60 cycles, 120/240 volts, 1, 3 phase, 3, 4 wires and the video system is NTSC.

Canada's broadcasting and telecommunications system is regulated by the Canadian Radio, Television and Telecommunications Commission, an independent agency.

Marketing your products and services

Market entry

All types of market entry strategies will apply in Canadian information and communciations technology (ICT) context, depending on the financial abilities of exporter.

A local strategic partner (eg licensee, manufacturer, distributor, joint venture arrangement, etc.) is recommended for cost-efficiency.

Many international ICT companies choose Canada as their primary entry point to North America. Not only does Canada have relative cost-advantage as an office location, but it boasts North America wide integration of distribution channels.

Canadian companies are equally or more likely to partner with an Australian business then US companies, partly due to similarity in historical backgrounds and understanding of each other’s market entry challenges.

All common promotional strategies can be employed by Australian ICT companies. Most of the marketing mix elements successfully employed in Canada, can be also equally well applied in the US ICT market. Attention should be given to the promotional efforts in French-speaking areas of Canada, particularly when selling into the consumer (vs business) segments.

The size of the online market is second to USA only. Both Business-to-Consumer and Business-to-Business sites proliferate. Online Federal Government procurement is common. Bids are posted on Merx, Canada's official electronic tendering service. Some provincial governments also employ their own online procurement mechanisms. 

Distribution channels

Well-developed infrastructure allows both traditional and non-traditional (eg. electronic) means to distribute products effectively in Canada and across North America.

Links and industry contacts

ICT–related resources

Advanced Card Technology Association of Canada - www.actcda.com
Association for Media and Technology in Education in Canada (AMTEC) - www.amtec.ca
Association of Internet Marketing and Sales (AIMS) - www.aimscanada.com
Canada IT.com - www.canadait.com
Canadian Association of Internet Providers (CAIP) - www.caip.ca
Canadian Association of Supply Chain and Logistics Management (SCL) - www.sclcanada.org
Canadian Cable Television Association (CCTA) - www.ccta.ca
Canadian Interactive Digital Software Association - www.media-awareness.ca/english/index.cfm
Canadian IT Law Association - www.it-can.ca
Canadian Telecommunications Consultants Association - www.ctca.ca
Canadian Wireless Telecommunications Association - www.cwta.ca
CATA Alliance - www.cata.ca
Information Research Management Association of Canada - www.irmac.ca/index.htm
Information Technology Association of Canada - www.itac.ca
it World Canada.com - www.itworldcanada.com