Authors
The State of Canada’s Tech Sector, 2016
July 2016
Executive Summary
Increasingly, persistently low energy and commodity prices have redirected the spotlight towards the tech sector to drive economic growth in Canada. This dynamic sector is a cornerstone of Canada’s growing knowledge economy. It is driven by an entrepreneurial spirit and reliance on continuous innovation for growth and resilience.
The effect of the tech sector is felt throughout Canada. New technologies drive employment and economic growth, transform traditional industries, and reinvent how we work and go about our daily lives. As the tech sector continues to grow and emerging technologies from around the world become more common, it is now more important than ever to ensure Canada maintains its growing, prominent tech economy.
However, past efforts to define the tech sector, while useful, have almost exclusively focused on the information and communications technology industry. Today, technology has become so ubiquitous across all Canadian industries that this approach understates the true impact that the tech sector has on Canada’s economy.
For this report, we developed the first pan-Canadian definition of Canada’s tech sector using a proven methodology that has defined other sectors internationally. It is our goal to identify the composition and accurately measure the impact that Canada’s tech sector has on the economy. Using our more encompassing definition, we found that Canada’s tech sector is exceptionally diverse, ranging from digital technologies to aerospace and pharmaceuticals. The sector is also much broader in size, scope, and geography than ever before. It is truly a pan-Canadian sector with pan-Canadian impacts.
This report shows that the tech sector is a critical component of Canada’s economy. In 2015:
- The tech sector was directly responsible for $117 billion or 7.1 percent 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 percent 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, representing 6.1 percent of all Canadian businesses.
- Tech sector employees earned approximately $67,000 a year, compared to the national average of nearly $48,000.