Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 3115 INFORMATION TECHNOLOGY ASSOCIATION OF CANADA ASSOCIATION CANADIENNE DE LA TECHNOLOGIE DE L’INFORMATION ITAC on Trade and Competitiveness | Page 4 THE VOICE OF THE INFORMATION AND COMMUNICATIONS TECHNOLOGY (ICT) SECTOR IN CANADA | www.itac.ca Protect Canadian IP creators Predatory, frivolous or extortionist patent litigation is a challenge dampening innovation and slowing the growth of dynamic firms around the world. While protecting and encouraging the creation of intellectual property in Canada, the government should work with international partners to pursue coordinated approaches to reducing parasitical elements and practices in the global innovation ecosystem. Open internal digital trade Canada needs to ensure our domestic market is free of unnecessary barriers to digital trade. Presently, provinces, territories and the federal government maintain different rules and approaches to digital commerce—making it challenging and costly for ICT businesses to operate across the country. For example: • the federal government, Alberta and Ontario all maintain (or are developing) separate regulations on data breach notification; • British Columbia and Nova Scotia have developed separate data residency requirements for particular record types; • Quebec recently passed a law to geo-fence particular websites from ISPs in Quebec; and • provinces and municipal regions maintain different processes for tracking buried digital infrastructure like fibre cables. Canada should work to ensure it creates a single market for trade in digital services, with common approaches and processes to regulating digital commerce and infrastructure. The federal government should also work with international partners through forums (like the OECD and APEC) to develop interoperable regulatory approaches to privacy and data security to support the free trade of services over the internet. 19 See: Dan Breznitz, Shiri Breznitz and David A. Wolfe, Current State of the Financial Technology Innovation Ecosystem in the Toronto Region. Munk School of Global Affairs (University of Toronto). 2015. http://www.tfsa.ca/storage/reports/Current_State_ Financial_Technology_Ecosystem_Toronto_Region.pdf 20 eBay Canada internal data for Canadian sellers who export and who sold more than US$10,000 on eBay in 2014. Therefore, the Government of Canada should work with international partners to develop common approaches for combating frivolous, predatory and extortionist intellectual property litigation that suppresses innovation and inhibits the growth of technology firms. The federal and provincial governments should work together (under the new Canadian Free Trade Agreement or other mechanisms) to harmonize and remove unnecessary barriers to internal digital trade and commerce—including rules around data residency, data security, internet openness, and privacy. Broaden trade support programs Canadian technology businesses are generally well served by the trade promotion programs of the federal and provincial governments. Canada’s Trade Commissioners Service and Global Affairs Canada’s (GAC’s) Technology Accelerator program help growing businesses understand new markets and connect with potential partners on the ground. Canada’s soft-landing programs should continue and be expanded into new markets. Beyond this, ITAC has identified two potential gaps in current GAC programming: a lack of domestic “anchor” programs, and a lack of focus on small digitally enabled exporters. While Canada has a wide range of federal and provincial programs aimed at helping businesses export, there are relatively few government initiatives aimed at helping innovative Canadian firms develop sales and partnerships at home. Exports should be the end goal—but if all an innovative technology firm’s customers are in the United States, this may create an incentive for the Canadian company to relocate. ITAC has seen small and medium enterprise (SME) members relocate for exactly this reason. The Munk School at University of Toronto has also identified this pressure in Toronto’s financial technology cluster.19 While guiding companies towards exporting, Canadian governments need to do more to help innovative SMEs develop reliable clients at home—whether in government or the private sector. This could include expanding programs like the Build in Canada Innovation Program (BCIP), or organizing domestic trade promotion events. These initiatives will also help exports because developing a strong reputation at home makes it easier for companies to sell abroad. Meanwhile, most of the federal government’s export promotion programs focus on traditional business types—largely ignoring the thousands of small Canadian entrepreneurs who sell goods or services around the world via the internet. By using global platforms (e.g. Amazon, eBay, Google) or establishing in-market web presences, these innovative businesses can export goods or deliver services without having to travel further than the local post office. In fact, eBay data has found that for Canadian commercial sellers on their platform, international exports represent more than 50% of their total average sales.20