Information and Communication Technologies Sector · In addition, B.C. offers one of the most progressive and cost-effective tax environments in North America. For these reasons it

Information and Communication Technologies Sector

Opportunities for Investment, Talent and Enterprise

British Columbia Technology Sector Profile

= 500 Employees

= 100 Companies

1,000 Companies 8,684 Employees


600 Companies 5,345 Employees


Vancouver Island16% Lower Mainland

69%

Interior10%

Northern B.C.5%

Information and Communication Technologies Sector: Opportunities for Investment, Talent and Enterprise

= 500 Employees

= 100 Companies





Vancouver Island16% Lower Mainland

69%

Interior10%

Northern B.C.5%

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Message from the MinisterBritish Columbia is home to a burgeoning and dynamic ICT Sector. Software developers have been operating here since the 1980s and B.C. has a history of successful start-up companies, some of which have attracted the attention of major players. In fact, the ICT sector in B.C. is thriving and is one of the fastest growing high technology sectors in the province. Recently, Microsoft announced the opening of a software development centre in Richmond, one of only five such centres Microsoft operates world-wide.

British Columbia is an ideal place for the development of knowledge based businesses. We have a strong network of post-secondary educational and research facilities, entrepreneurial talent experienced in building businesses and an unparalleled quality of life that attracts highly qualified talent.

In addition, B.C. offers one of the most progressive and cost-effective tax environments in North America. For these reasons it is no surprise that B.C. is home to one-third of Canada’s fastest growing technology companies, and that the high technology sector has expanded at three times the pace of the overall economy.

Colin Hansen Minister of Economic Development

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1 ExecutiveSummary

2 SectorDescription&OverviewinBritishColumbia

Sector Highlights

3 Profileof20LargestCompanies

4 CentresforResearchandInnovation

5 SkilledWorkforce

6 FinanceandCapitalization

Fiscal Incentives

R&D Tax Credits

International Financial Activity Act

Small Business Venture Capital Act (SBVCA)

Employment Investment Act

Social Service Tax Act

7 ValueChain/Ecosystem

8 IndustryContacts

9 Endnotes

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Executive Summary

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The Information and Communication Technologies sector (ICT) in British Columbia is particularly strong in the areas of ICT services, ICT manufacturing and telecommunications services. There are approximately 6,000 companies active in the sector across the province generating revenues of approximately $9 billion and employing about 46,000 people.

The ICT sector is one of the most dynamic of B.C.’s high-tech sectors. A strong software development component has existed since the 1980s, and continues to expand as a result of an experienced and established talent base, continuing reinvestment and a strong network of angel investors and experienced CEO’s with multiple startup successes. Consequently, B.C. has produced a diverse number of applications. In addition, B.C. received over $1.1 billion in venture capital financing between 1996 and 2004.

The largest player in the ICT sector in B.C. is TELUS, one of Canada’s leading telecommunication companies. It has annual revenues of $8.5 billion and 10.5 million customer connections, including 4.6 million wireline subscribers, 1.1 million internet subscribers and 4.9 million wireless subscribers. In addition to the sheer size of their operations, TELUS also has an investment role. TELUS makes strategic investments in enhanced data and next-generation network infrastructure, wireless and digital media through its $100 million TELUS Ventures fund.

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Attracted by B.C.’s technology talent base and more flexible immigration laws, Microsoft announced in July 2007, that it intends to open a new Software Development Centre in Vancouver. The centre will originally employ about 200 staff and will be only the fifth of its kind in the world, joining other Microsoft centres in Ireland, Denmark, Israel and North Carolina.

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Sector Description and Overview in British Columbia

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Sector HighlightsHistorically, B.C. has created a number of companies that have been acquired by large multinational companies, recognizing the creative talent pool that exists in the province. In a significant number of cases the operations have remained in B.C., confirming the province’s strong development experience and research infrastructure.

According to the VCReporter database, since 1991, the announced value of acquisitions in ICT companies is approximately $690 million.

ActiveState is an open source tool and antispam software developer founded in 1997. ActiveState was acquired for $23 million by Sophos in 2003 and was acquired again in 2006 by ActiveState Software Inc., which is a company jointly owned by ActiveState employees and Pender Financial Group Corporation.

In 2003, Intel, the world’s leading silicon chip maker, acquired Vancouver based West Bay Semiconductor to complement its suite of optical networking chips.

ACCPAC (accounting software) was developed in Vancouver in the 1980s by Basic Software Group, which was later acquired by Computer Associates. In 2004, Accpac International Inc., was acquired by The Sage Group.

In 1999, HotHaus Technologies was acquired by Broadcom for approximately $414 million. It remains one of the largest communications software deals in Canada. The company is now

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Broadcom Canada Ltd., headquartered in Richmond. It focuses on VoIP communications processors and software.

In 2001, Microsoft acquired B.C. based NCompass Labs for $36 million, the developer of NCompass Resolution -- software that helps business users create and maintain web content. The product is now Microsoft Content Management Server, which has been integrated with other products into Office SharePoint Server 2007. At the time of the acquisition, NCompass had about 160 employees.

In 2003, Business Objects, a leading worldwide provider of business intelligence, acquired Vancouver-based Crystal Decisions for $820 million. The combined operation is now the premier business intelligence firm in the world. Prior to 2003, Crystal Decisions had several successes; in 1992, Crystal Reports became the first Microsoft Windows reporter; in 1993, Crystal Reports was bundled with Microsoft Visual Basic; in 1996, Crystal Enterprise was the first business intelligence industry web-based enterprise reporting platform; in 2001, SAP signed an OEM and reseller agreement to bundle Crystal Reports; in 2002, Crystal Reports was bundled with Microsoft Visual Studio.NET. Business Objects has over 4,000 employees worldwide and 24,000 customers in over 80 countries.

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PureEdge Solutions, a provider of electronic forms-based business process management software, was acquired by IBM in July 2005. PureEdge Solutions is a private company based in Victoria, established in 1993, with approximately 70 employees.

In March 2005, Vancouver-based Flickr, an online photo-sharing service, was purchased by Yahoo for an undisclosed amount.

In January 2006, Whistler-based Paradata Systems was acquired by Payment Processing Inc. Paradata’s payment system technology will be used to enhance Payment Processing Inc.’s payment system. At the time of the acquisition, Paradata had approximately 15 employees. Payment Processing Inc.’s Canadian office remains in Whistler.

In 2000, B.C.-based TELUS, acquired Clearnet Communications, a wireless communications provided in Toronto for $6.6 billion, making TELUS Canada’s largest wireless telecommunications provider.

D-Wave Systems Inc., is a leader in the development of quantum computing systems. D-Wave has built one of the broadest technology platforms in the industry with more than 150 patents and patent applications. D-Wave is developing revolutionary high-value, high-performance quantum computing systems for use in logistics, cryptanalysis, bioinformatics, life and physical sciences and electronic design automation.

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ACL Services Ltd., established in 1987 and headquartered in Vancouver, provides business assurance analytic software in more than 130 countries to over 170,000 licensed users. ACL’s software regularly ranks as the top audit-specific software for data analysis and extraction, fraud detection and continuous monitoring by The Institute of Internal Auditors annual software survey.

Research ActivitiesIn addition to B.C.’s corporate activity, the province has a strong network of research facilities.

Telecommunications giant Alcatel has over 300 employees in B.C., of which many are dedicated to research and development. (Alcatel purchased Newbridge, a B.C. company specializing in ATM switches). There are two notable centres at Simon Fraser University (SFU) and the University of British Columbia (UBC). The Centre of Scientific Computing, located at SFU, provides a visible focus for computational research on the campus and in the wider Pacific Rim research community. The Centre’s goals are to facilitate discussion between scientific computing research groups, to provide advanced instruction in computational techniques and applications, and to actively pursue joint research ventures with industry, government and laboratories.

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British Columbia Technology Sector Profile2

UBC’s Institute for Computing, Information and Cognitive Systems (ICICS) is a research institute combining the expertise of over 136 faculty members from a diverse range of fields. ICICS researchers explore the boundaries and crossovers of disciplines including Applied Science, Arts, Commerce, Dentistry, Education, Forestry, Medicine, Pharmacy and Science.

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The following table profiles B.C.’s twenty largest companies in the ICT sector. Inclusion in the twenty largest companies list is based primarily on revenues and secondarily on employment. This list includes companies that are headquartered in B.C., as well as those with locations in B.C., with headquarters elsewhere.i

Many technology companies throughout B.C. are privately held; therefore, information on company revenues and employment is often not available. Following the list of twenty companies is a table with the names of several privately-held companies acknowledged by their industry as being technology leaders.

Profile of 20 Largest B.C. Companies

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Information and Communication Technologies Sector: Opportunities for Investment, Talent and Enterprise 3Rank Company Revenueii Employment Specialty Background

1 TELUS Communications Inc. www.telus.com

$8,142.70 National: 29,000 Telecommunications TELUS is headquartered in B.C. and is one of Canada’s leading telecommunication companies, providing a full range of communications products and services. TELUS makes strategic investments in enhanced data and next-generation network infrastructure, wireless and digital media through its $100 million TELUS Ventures fund.

2 MacDonald Dettwiler & Associates Ltd. www.mda.ca

$832.93 BC: 461

Global: 2,700

Software Delivers a range of earth and space-based information solutions. Developer of the Canadarm, MDA provides information solutions that capture and process data, produce essential information and improve the decision making and operational performance of business and government organizations. MDA is focused primarily on land and property related information solutions for two major market sectors: the financial services sector and the surveillance and intelligence sector.

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3 Sage Software www.sagesoftware.com

$708.3 B.C.: 360

Global: 10,500

Software Provides business management solutions – including ACCPAC Simply Accounting. The company’s sole focus is to provide business management software and services to small and medium-sized businesses. Their applications cover a full range of business requirements including accounting, customer relationship management, contact management, human resources, warehouse management and specialized industry needs, among many others.

4 Creo Inc. (Kodak Graphic Communication Canada Co.) www.creo.com

$666.8 B.C.: 1,400

Global: n/a

Hardware Purchased by Eastman Kodak in 2005 for approx. $980 million. Now a subsidiary of Eastman Kodak, Creo’s principal activities are to develop, manufacture and distribute digital solutions for the graphic arts industry. Core product lines of the group include: image capture systems, inkjet proofers, thermal imaging devices for films, plates and proofs, professional color and copydot scanning systems and workflow management software.

Creo is also an original equipment manufacturer (OEM), supplier of on-press imaging technology, components for digital presses and color servers for high-speed, print-on-demand digital printers.

Rank Company Revenue Employment Specialty Background

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5 PMC Sierra www.pmc-sierra.com

$326.1 B.C.: 590

Global: 945

Hardware

Semiconductor products for the wireless and wireline communications industry.

PMC-Sierra™ is a provider of broadband communications and storage semiconductors for metro, access, fiber to the home, wireless infrastructure, storage, laser printers and customer premises equipment. PMC-Sierra offers worldwide technical and sales support, including a network of offices throughout North America, Europe, Israel and Asia.

6 Cray Inc. www.cray.com

$229.9 B.C.: 70

Global: 787

Hardware

Develops and markets high-performance computing systems

Cray Inc., acquired Vancouver based Octiga Bay for US $114 million in 2004. Renamed the Cray XD1™ system, Octiga Bay was a developer of a high performance computing (HPC) system designed around a direct-connect processor approach to massively parallel processing, that directly links together processors, alleviating memory contention and interconnect bottlenecks found in cluster and SMP systems.

7 Creation Technologies Inc. www.digital-dispatch.com

$207.0 B.C.: 1,000

Global: 1,025

Electronics Creation Technologies Inc., is a global top-100 electronic manufacturing service company providing high-mix, high-complexity start-to-finish manufacturing solutions to companies in the industrial controls, medical, communications, transportation and computer industries.


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8 Sierra Systems www.sierrasystems.com

$152.0 B.C.: 344

Global: 814

Services Sierra Systems Group offers system integration and a range of other information technology (IT) services to corporate clients and government agencies in Canada and the U.S. These services include business planning, process improvement, long-term IT infrastructure support, and applications services for private and public sector clients. In the public sector it specializes in government, justice and health business services.

9 Business Objects (Vancouver) www.businessobjects.com

$148.5 B.C.: 1,400

Global: 4,418

Software Business Objects is a leading provider of business intelligence (BI) software to help organizations gain a better insight into their business, improving decision-making and enterprise performance. Business Objects provides a business intelligence platform to deliver a complete set of market-leading, end-to-end BI capabilities: best-in-class enterprise performance management, dashboards and visualization, reporting, query and analysis, and enterprise information management solutions.

10 Sophos Plc. www.sophos.com

$137.5 B.C.: 154

Global: 1,000

Software Anti-virus and computer security software for large organizations to protect against viruses, spyware, adware, hackers, spam and malicious websites.

11 Seanix Technology Inc. www.seanix.com

$103.0 B.C.: 135

Global: n/a

Hardware Canada’s largest manufacturer and distributor of computers and laptops for home and business use.


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12 Teligence Communications Inc.www.teligence.net

$97.0 B.C.: 500

Global: n/a

Software Teligence has core capabilities in interactive voice-response technology, customer relationship management, real-time risk management and transactional billing systems, 24/7 network management and direct-response advertising. Its extensive North American network, with 27 telecommunications hubs in 15 locations, currently handles more than 620,000 calls per day.

13 Pivotal Corporation www.pivotal.com

$61.4 B.C.: 200

Global: 475

Software Pivotal Corporation provides customer relationship management (CRM) software, primarily for midsized businesses and divisions of corporations. Its software includes applications for targeting sales prospects, building marketing campaigns, and managing partner relationships. Pivotal also offers industry-specific versions of its products for vertical markets such as investment banking, health care insurance and homebuilders.

14 Navigata Communications Ltd. www.navigata.ca

$60.0 B.C.: 145

Global: 150

Services A member of the SaskTel group of companies, Navigata has a long history of serving businesses both in Canada and worldwide with cost-effective, reliable and innovative telecommunications solutions. With a full suite of voice, data and Internet services, Navigata is a recognized leader in telecommunications technology. Navigata is headquartered in Vancouver, B.C with regional offices in Ontario, Alberta and B.C.


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15 Fincentric Corp. www.fincentric.com

$39.9 B.C.: 114

Global: 117

Software Provides software for banks, thrifts, credit unions, brokerages and other wealth management institutions. Fincentric develops markets, sells and supports an enterprise-wide suite of software and services that perform financial institution data processing and information management functions.

16 Extreme CCTV www.extremecctv.com

$23.9 B.C.: 65

Global: 117

Hardware Extreme designs, develops and manufactures advanced infrared illuminators and precision engineered surveillance solutions for critical infrastructure, defense, Homeland Security, transportation and national heritage sites.

17 ACD Systems International Ltd.www.acdsee.com

$23.9 B.C.: 103

Global: n/a

Software ACD Systems is recognized the world over as the leader in image management and technical illustration software, providing the ACD Family of products, headed by ACDSee and Canvas. It develops and markets file management and technical imaging products


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18 Maximizer Software www.maximizer.com

$17.5 B.C.: 95

Global: 180

Software Maximizer Software is the world’s leading provider of affordable and easy-to-use Customer Relationship Management (CRM) software applications. The Maximizer line of products help companies develop more responsive, personalized and profitable customer experiences. Built on a modern, web-based architecture, Maximizer is easily integrated with existing corporate systems and features the latest in sales force automation, marketing automation, email marketing and customer service technologies in a single mobile-accessible business management system.

19 Absolute Software Corp. www.absolute.com

$13.2 B.C.: 77

Global: 101

Software Absolute Software Corporation is the leader in computer theft recovery, data protection and Secure Asset Tracking™ solutions. Absolute Software provides individuals and organizations of all types and sizes with solutions to manage regulatory compliance, data protection and theft recovery.

20 Triant Holdings Inc. www.triant.com

$5.4 B.C.: 40

Global: 40

Software Triant is a leader in semiconductor equipment health monitoring and advanced fault detection software solutions.Triant’s principal product, ModelWare®, is an innovative solution designed specifically for semiconductor manufacturers to detect and identify process and equipment faults.


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Privately-held ICT Companies(names compiled by PwC in conjunction with industry associations and other related sources)

Company Area of Technology Website

Abebooks.com Online book sellers www.abebooks.com

Apparent Networks Inc. Software-based internet diagnostic support www.apparentnetworks.com

Eyeball Networks Develops software for VOIP and video telephony www.eyeball.com

FinancialCAD Corporation (FINCAD) Software and services provider to financial services www.fincad.com

RIPE B2B Inc. Custom software developer of the Flintbox™ system www.ripe.ca

Sunnybrook Technologies Inc. Developer of image enhancement and display technologies www.sunnybrooktech.com

SXIP Identity Corp. Developer of an online digital identity manager www.sxip.com

Tantalus Systems Corp. Developer of wireless data communication networks for utilities

www.tantalus.com

WebTrain Communications Inc. Developer of a solution for online interactive meetings www.webtrain.com

Whitenoise Laboratories Inc. Developer of encryption and security products for data transport and storage

www.whitenoiselabs.com

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Research facilities at universities and elsewhere in the community indicate the depth of research capabilities in a sector. The following table illustrates research facilities in B.C. related to the ICT sector.

Centres for Research and Innovation

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University Research Facilities

University of British Columbia (UBC)

Advanced Materials and Process Engineering Laboratory (AMPEL)

www.ampel.ubc.ca

A multidisciplinary research centre involving the departments of chemistry, electrical and computer engineering, metals and materials engineering and physics and astronomy.

The goal of AMPEL is to bring together researchers into a collaborative network, sharing modern research facilities.

Facilities include:

• Surface and interface analysis laboratory with various forms of electron and ion beam spectroscopy.

• Nanofabrication and cleanroom with apparatus for electron beam and optical lithography, thin film coating methods and electronic device fabrication.

• Metallurgical materials testing laboratory.

Institute for Computing, Information and Cognitive Systems (ICICS)

The central research vision of ICICS is the integration of human experience into the broad application context of interactive information environments.

ICICS brings together over 30 ICICS research groups with expertise in a range of enabling technologies and complementary behavioural, social, physical, mathematical and life sciences.

Research themes at ICICS include::

• Computer Systems and Communications

• Computational Intelligence

• Integrated Systems Design

• VLSI Design and Microelectronics

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BC Institute of Technology (BCIT)

Group for Advanced Information Technology (GAIT)

GAIT develops advanced computer technologies and concepts to solve complex problems.

Focus areas include:

• Advanced software development

• Bioinformatics

• Instructional multimedia

• Internet engineering

• Wireless and geographic information systems

• Industrial cyber-security

Internet Engineering Lab

www.bcit.ca/appliedresearch/tc/facilities/iel/

The Internet Engineering Lab at BCIT is one of only four research centres of its kind in North America. It focuses on the design and management of advanced networks involving layer 3/4 (TCIP/IP) issues including:

• Network security and critical infrastructure protection

• Conformance to standards

• Network performance testing and evaluation

The lab contains $1.5 million of network hardware and test equipment including network routers and switches, traffic generators, impairment emulators and network analysis tools capable of emulating and testing both small- and large-scale network configurations.

University of Victoria (UVIC) Centre for Advanced Materials and Related Technology (CAMTEC)

www.camtec.uvic.ca

CAMTEC coordinates related research among the Departments of Biology, Chemistry, Electrical and Computer Engineering, Mechanical Engineering, Physics and Astronomy, and Earth and Ocean Sciences.

CAMTEC’s objectives are to carry out fundamental and applied research in advanced materials, to train technical and academic personnel in these areas, and to disseminate the knowledge gained from the research through scientific publications, conferences, workshops and seminars.


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Simon Fraser University (SFU) Mathematics of Information and Complex Systems (Network of Centres of Excellence (NCE) for the Mathematical Sciences)

www.math.sfu.ca/research/centres/

MITACS was developed as a direct response to a recognized need for the mathematical sciences to contribute to the technological revolution.

MITACS leads Canada’s effort in the generation, application and commercialization of new mathematical tools and methodologies. The network initiates and fosters linkages with industrial, governmental and not-for-profit organizations that require mathematical technologies to deal with problems of strategic importance to Canada.

Interdisciplinary Research in the Mathematical and Computational Sciences Centre (IRMACS)

http://www.dsp.ece.uvic.ca/

IRMACS provides a flexible, collaborative, computationally sophisticated environment for scientists whose primary laboratory tool is the computer.

IRMACS provides state-of-the-art computational and communications environment, including desktop computing, advanced visualization, backup and networked SmartBoards for its members.

PolyLab (Sun Technology and Research Excellence Centre)

PolyLAB is a Sun Technology and Research Excellence Centre dedicated to network computing, from collaborative Java-based networks, to wireless and space-based communication systems.

Facilities currently include:

• Two large servers, Enterprise 450 class.

• First 4 x 300 Mhz CPU, 1 Gigabyte RAM, and second 2 x 300 Mhz CPU, 0.5 Gigabyte RAM. Both with 32 Gigabytes of disk space, 40 Gigabyte DLT4000 backup each. Both with 100 Mbps Ethernet.

• Four next-generation Java stations.


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University of Northern British Columbia (UNBC)

High Performance Computing Lab (HPC)

http://web.unbc.ca/hpc/ Located in the university’s Prince George campus, this facility provides advanced computing capacity for modeling, simulation and visualization projects.

A collaborative environment where computation intensive projects such as weather hindcasting, simulation of shocks, fluid dynamics and distributed transaction processing are developed.

Systems include a 64 processor SGI Altix SMP machine, a 128 processor Itanium cluster, a 6 TB file server, a visualization system (GeoWall), a Dell 4 processor Windows server and 10 Dell 2 processor workstations, as well as software and other facilities.


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Other Research Facilities

Triumf (National Laboratory for Particle and Nuclear Physics)

www.triumf.ca

Triumf is one of only three subatomic research facilities in the world that specialize in producing extremely intense beams of particles. The facility contains the world’s biggest cyclotron which is used to accelerate 1000 trillion particles each second.

Among other projects, scientists at Triumf are working on developing new computer software, microchips, remote controlled equipment and other high tech innovations.

WestGrid

www.westgrid.ca

WestGrid is a $50 million project to operate high performance computing collaboration and visualization infrastructure across Canada.

WestGrid links computers all over Canada, combining their processing power into one massive computer.

WestGrid enables Canadian researchers to participate in collaborative projects around the world such as the DØ Project on the fundamental nature of matter at Fermilab (Chicago) and the ATLAS particle physics experiment at CERN (Switzerland).

IBM Pacific Development Centre

www.ibm.com

An inbound solution development lab working with IBM Global Services to create custom software solutions.

The Centre is IBM’s largest international innovation centre, with a 280 person team of analysts, consultants, engineers, strategists, systems architects and programmers.

Nokia Research and Development Centre

Nokia employs about 200 people at its Burnaby Product Creation Centre. The facility designs internet friendly, multimedia, handheld mobile devices.

Nokia’s recently released music phone was developed at the centre, which is the only mobile terminal R&D facility in Canada.

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Oracle (PeopleSoft) Product Development Centre

Vancouver is home of one of four Oracle product development centres in Canada.

The development centre was opened in 2003, after PeopleSoft announced a $20 million investment in the centre.

Intel Canada Research

Intel Canada’s Vancouver researchers focus on the design of next-generation Flash memory chips for cellular and embedded market segments.

The site has over 30 employees that create silicon components.

PMC-Sierra International Design Centre

Burnaby is home to one of four PMC-Sierra International Design Centres located in Canada and is also the operations head office.

Epson Vancouver Design Centre

Develops LCD graphics controller technology for mobile communications and handheld devices.

Business Objects Research and Development

Business Objects’ main research and development site and largest programming facility is located in Vancouver.

As of October 2005, there were about 1,200 employees and contract staff in Vancouver, which also is responsible for sales, customer support and back office operations.

BCNETwww.bc.net

BCNET is an optical high-speed advanced network linking the province’s higher education and research institutions in support of collaborative experiments and research initiatives. BCNET interconnects nationally and internationally with other advanced research networks.

Other Research Facilities

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The number of undergraduate and graduate students enrolled in science and engineering programs is an indication of the skill level and depth of knowledge and experience in a region. The following table illustrates the number of graduate students enrolled in a range of engineering, science and software engineering programs in B.C.

Skilled Workforce

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Number of Undergraduate Students Enrolled in British Columbia Universities

Undergraduate Students 2005/06 2004/05 2003/04 2002/03 2001/02

Bachelor of Applied Science 3,883 3,623 3,387 3,062 2,813

Bachelor of Computer Science (including Integrated CompSci)

54 27 – – –

Bachelor of Engineering 764 770 777 731 720

Bachelor of Software Engineering 63 43 35 – –

Bachelor of Science 16,018 15,581 15,382 14,492 14,714

Bachelor of Science (Information Tech, Tech BC) 81 119 95 138 –

Bachelor of Science (Tech BC) – 726 542 233 –

Source: The University Presidents’ Council of British Columbia (TUPC). Data as of September 2006.

Number of Graduate Students Enrolled in British Columbia Universities

Graduate Students 2005/06 2004/05 2003/04 2002/03 2001/02

Master of Engineering 129 143 166 195 177

Master of Applied Science 586 632 609 575 506

Master of Science 2,012 2,074 1,894 1,894 1,794

Master of Software Systems 33 34 29 34 37

Bachelor of Applied Science/ Master of Engineering

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Also important to note is the number of undergraduate students in science and engineering, which are listed in the following table. The table includes undergraduate students enrolled in B.C. universities from 2001-2002 to 2005-2006.

Number of Undergraduate Students Enrolled in British Columbia Universities

Undergraduate Students 2005/06 2004/05 2003/04 2002/03 2001/02

Bachelor of Applied Science 3,883 3,623 3,387 3,062 2,813

Bachelor of Computer Science (including Integrated CompSci)

54 27 – – –

Bachelor of Engineering 764 770 777 731 720

Bachelor of Software Engineering 63 43 35 – –

Bachelor of Science 16,018 15,581 15,382 14,492 14,714

Bachelor of Science (Information Tech, Tech BC) 81 119 95 138 –

Bachelor of Science (Tech BC) – 726 542 233 –


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Areas of Specialization

This section focuses on the research strengths of B.C.’s ICT sector, based on the number of research chairs, university research strategies, research facilities, Technology Partnerships Canada contributions and post-secondary graduates.

Research ChairsThere are ten Canada Research Chairs in ICT held in the province as well as one NSERC Research Chair. Canada Research Chairs may be either Tier 1 or Tier 2. Tier 1 Chairs are awarded to outstanding researchers that are recognized by their peers as world leaders in their respective research area. These chairs are renewable, and the researcher’s university receives $200,000 annually for seven years. Tier 2 Chairs are awarded to emerging researchers that are recognized by their peers as potential world leaders in their area of research. Tier 2 Chairs are renewable once, and the researcher’s university receives $100,000 annually for five years.

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Research Strengths - Number of Research Chairs

Canada Research Chairs

Tier 1 4

Tier 2 6

NSERC Research Chairs 1


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Canada Research Chairs Research Title / Year Awarded Research Chair Department School

Tier 1 Information Technology ManagementJanuary 1, 2001

Izak Benbasat UBC

Mathematical Physics July 1, 2001

David Brydges Math UBC

Semiconductor PhysicsJanuary 1, 2005

Patricia Mooney Physics SFU

Quantum Control of Atoms and Molecules October 1, 2002

Moshe Shapiro Chemistry and Physics UBC

Tier 2 Design and Computational ModelingApril 1, 2002

Colin H. Bradley Mechanical Engineering UVIC

Multifunctional Materials DesignJanuary 1, 2005

Natia Frank Chemistry UVIC

Machine Learning and Computational StatisticsJune 1, 2005

Kevin Murphy Computer Science UBC

Complexity of ComputingJuly 1, 2005

Venkatesh Srinivasan Computing Science UBC

Software and Knowledge VisualizationMarch 1, 2005

Margaret-Anne Storey Computer Science UVIC

Supramolecular Photonic MaterialsJuly 1, 2002

Frank C.J.M. van Veggel

Chemistry UVIC

NSERC Research Chair

High-Speed Microelectronic CircuitsGrant awarded between 2001-2005

Resve Saleh Electrical and Computer Engineering

UBC

The following table lists the titles of the research chairs identified in the previous table.

Technology Partnerships Canada – R&D Projects

Year Company Project Approved Contribution

2002-2003 Firebird Technologies Inc.www.firebird.bc.ca

Producing a new crystal (indium antimonide wafer) for use in materials for industrial and military infrared imaging and seeking systems.

$1.1 million

2002-2003 Intrinsyc Software International Inc.www.intrinsyc.com

Developing hardware for advanced enterprise network devices and software to link devices with enterprise systems and each other.

$6.3 million

2002-2003 MacDonald Dettwiler and Associates Ltd.www.mda.ca

R&D for small and more affordable satellite systems in order to increase opportunities for applications of satellite technologies in areas such as forestry or agriculture.

$9.9 million

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British Columbia Technology Sector Profile5

Technology Partnerships Canada – R&D Projects (Projects listed under ICT are included in the Aerospace and Defense category of TPC)


2004-2005 Axys Technologies Inc.www.axystechnologies.com

Develop advanced environmental and ocean monitoring technologies; enhanced real-time monitoring and improved forecasting ability for marine operations.

$1.5 million

2004-2005 Offshore Systems Ltd.www.osil.com/offshoresystems/

Advance implementation of electronic charts into navigation systems; integrate electronic geography into other applications of military command and control

$3.8 million

2003-2004 Kongsberg Mesotech Ltd.www.simrad.ca

Advancing development of sonar and acoustic technologies for national security and military applications.

$5.2 million

2003-2004 Spectrum Signal Processing Inc.www.spectrumsignal.com

Implementing software-defined radio platforms for defence communications, intelligence and surveillance applications.

$8.3 million

Technology Partnerships Canada (TPC)ii

Since 2002-2003, there have been seven contributions awarded that are relevant for the ICT sector. The contributions have gone to some of the sectors biggest names such as: MacDonald Dettwiler and Associates, Spectrum Signal Processing and Intrinsyc Software International.

Technology Partnerships Canada – R&D Projects


2002-2003 Firebird Technologies Inc.www.firebird.bc.ca

Producing a new crystal (indium antimonide wafer) for use in materials for industrial and military infrared imaging and seeking systems.

$1.1 million

2002-2003 Intrinsyc Software International Inc.www.intrinsyc.com

Developing hardware for advanced enterprise network devices and software to link devices with enterprise systems and each other.

$6.3 million

2002-2003 MacDonald Dettwiler and Associates Ltd.www.mda.ca

R&D for small and more affordable satellite systems in order to increase opportunities for applications of satellite technologies in areas such as forestry or agriculture.

$9.9 million


29

The National Research Council (NRC) Industrial Research Assistance Program (NRC-IRAP)NRC-IRAP provides a range of technical and business oriented advisory services along with potential financial support to growth-oriented SMEs and has been a significant contributor in supporting ICT research and commercialization. The program relies on an extensive network of professionals across Canada working directly with clients, supporting innovative research and the development and commercialization of new products. In 2004/05, NRC-IRAP’s nearly $130 million in total expenditures aided in expanding the innovative capacities of over 10,000 firms with direct financial support distributed across over 2,500 projects.

30


The source of the data is the VCReporter database from Thomson Financial. As the database only captures information on transactions occurring between Canadian parties, some transactions may not be included in database. For example, information on acquisitions of B.C. companies by U.S.-based firms will not show up in the data.

Finance and Capitalization

6

31


Financing Statistics for B.C. ICT Sector

0

20

40

60

80

100

2006

$95.7M

2005

$50.8M

2004

$53.5M

2003

$54.9M

0

4

8

12

16

20

24

28

32

36

40

Total#ofDeals 20 35 29 24

Venture Cap Investment*

$M of Venture Capital Invested in B.C. ICT Companies 2003-2006

Source: Thomson Venture Economics (2006) The following tables provide program information for fiscal incentives available to eligible companies or residents located in B.C. All of the incentives listed are tax credits available from either the provincial or federal governments.

Fiscal Incentives

*Amount of VC investment is higher as the amounts of some deals were not reported.

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Canada – Federal Scientific Research and Experimental Development (SR&ED) Policy Detailsiii

Tax Credit Qualifying Entities Tax Credit Rate Refund Rate Further Detailsiv Who Qualifies?

Scientific Research & Experimental Development Tax Credit Program (SR&ED)

Qualifying Canadian Controlled Private Corps. (CCPCs)

35% of annual expenditures up to threshold of $2 million.

+20% of qualified expenditures not eligible for the 35% rate.

100% of ITCs on current expenditure computed at the 35% rate.

+40% of ITCs on capital expenditures computed at the 35% rate and of ITCs of a qualifying corporation at the 20% rate.

The SR&ED is a refundable tax credit, which means that even if an eligible firm is not profitable, it will still get a cash refund from engaging in R&D.

For non-CCPCs, even though no refund is available, the program allows firms to reduce taxes payable for a net positive cash flow.

Qualified research must fit advancement, uncertainty and content criteria.

Non CCPC’s 20% N/A

Individuals 20% 40% of ITCs

6Research and Development Investment Tax CreditsCanada and British Columbia offer a generous program of research and development tax credits to support innovation. These credits can be used to substantially fund R&D and are very attractive to companies establishing themselves in the province.

The Scientific Research & Experimental Development (SR&ED) is the federal program designed to encourage businesses, including small and start-up companies, to do work that advances technology to develop new or improved products or processes.

SR&ED provides companies with either refundable or nonrefundable tax credits for eligible expenditures incurred in Canada for research and development activities. Companies qualifying as a CCPC (Canadian Controlled Private Corporation) are eligible to receive a 35 per cent investment tax credit on up to $2 million of qualified expenditures and 20 per cent of qualified expenditures not eligible for the 35 per cent rate. Non CCPC’s are only eligible to receive tax credits of 20 per cent of qualified expenditures. All companies are able to carry forward federal investment tax credits for 20 years (from 2006).


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Under the B.C. provincial investment tax credit program, eligible corporations can take a 10 per cent tax credit against provincial income tax in addition to receiving federal SR&ED tax credits. Similar to the SR&ED program, CCPC’s are eligible for refunds while non-CCPC’s must apply the credit against taxes payable.

Province of British Columbia British Columbia R&D Tax Credit Policy Detailsv

Tax Credit Qualifying Entities Tax Credit Rate Refund Rate Further Details Who Qualifies?

British Columbia Provincial R&D Tax Credit

Qualifying Canadian Controlled Private Corps. (CCPCs)

10% Credit Against Provincial Income Tax

Refundable Qualifying CCPCs are refundable on the first $2 million of expenditures eligible for SR&ED credit.

Qualified research must fit advancement, uncertainty, and content criteria.

Other Corporations Non-refundableOther Corporations may carry the tax credit forward 10 years and back 3 years.

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British Columbia Technology Sector Profile6International Financial Activity (IFA) Actvi

B.C.’s International Financial Activity (IFA) Act came into effect on September 1, 2004, and provides eligible corporations and specialists with a refund on B.C. income tax paid on income that is related to the corporation’s international financial activities conducted in B.C. The IFA Act was established to support certain business activities by essentially exempting income from these activities from Provincial income tax or providing a significant reduction in the effective Provincial tax rate.

These activities, all of which must be carried on with a non-resident person, include making loans, including financing foreign affiliates, factoring trade accounts receivable, distribution of film and television rights, leasing property, captive insurance activities and foreign exchange activities. A corporation may receive an annual refund of 100 per cent of the provincial income tax paid on income earned from these activities. An IFA specialist is eligible to receive a refund of up to 75 per cent of income taxes paid.

Effective January 1, 2006, the IFA has been expanded to include the refund of income tax paid on income derived from certain types of life sciences patentsvii. Corporations may receive an annual tax refund up to the lesser of $8 million and 75 per cent of its corporate income tax paid on income that is derived from international commercialization of life sciences patents.

To be eligible for the refund, patents must have a primary classification number in accordance with the International Patent Classification and not have expired. Broad classifications for the types of patents that qualify for refunds include the following: new plant or processes for obtaining them, preservation of bodies of humans or animal, biochemistry, microbiology, investigation or analyzing food, and investigation or analyzing biological material. This program is summarized in the following table.

Province of British Columbia International Financial Activity (IFA) Policy Details

Tax Credit Qualifying Entities Refund Rate Further Details Who Qualifies?

British Columbia International Financial Activity Act

Incorporated Canadian companies with permanent establishments in B.C.

100% of provincial income tax paid on non-life science patent activity.

Lesser of $8 million and 75% of provincial income tax paid on life sciences patent activity.

Registered corporations may claim a tax refund on patent activity or other eligible activities (but not both).

Must maintain membership in International Financial Centre British Columbia Society.


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Province of British Columbia Small Business Venture Capital Act Policy Details

Tax Credit Qualifying Entities Tax Credit Rate Further Details Who Qualifies?

Small Business Venture Capital Act (SBVCA)

Resident investors who provide investment capital into a VCC or EBC.

30% refundable tax creditvii for individuals to a maximum of $60,000 annually (not refundable for corporations with no maximum limit).

Tax credit is applied first against provincial and federal taxes payable, if any.

Investors may provide up to $83 million per year in equity capital for investments in small business.

For tax certificates greater than $60,000, the excess can be carried forward up to four years.

Residents and corporations with B.C. taxes payable.

The Venture Capital Corporation (VCC) Tax Credit encourages investment in small businesses operating outside of the Greater Vancouver and Capital Regional Districts.

Small Business Venture Capital Act (SBVCA)The B.C. Ministry of Economic Development offers tax credits to resident investors to help small businesses carrying on prescribed activities gain access to early stage or ‘seed’ capital through venture capital programs operated under the Small Business Venture Capital Act (SBVCA). Prescribed activities include manufacturing and processing of goods in British Columbia, research and development of proprietary technologies, development and operation of a destination tourist resort and the development of interactive digital media products.

The annual cap for equity capital investment under this program is $83 million of which $10 million of program capital is reserved for investment in small businesses operating outside of the Lower Mainland and $17 million is reserved for investment in small businesses substantially engaged in the ‘new media’ sector.

Under the SBVCA, program investment is made either through a holding corporation known as a Venture Capital Corporation or ‘VCC’ or directly to an Eligible Business Corporation, an ‘EBC’. The EBC Tax Credit encourages direct investment by investors in eligible small businesses throughout the province. Professional management of the VCC fund selects and manages a diverse portfolio of investments on behalf of the pool of investors. Details of the SBVCA program are outlined in the table below.

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Province of British Columbia B.C. Sales Tax Exemption for Equipment and Machinery Policy Detailsix

Tax Credit Qualifying Entities Tax Credit Rate Further Details Who Qualifies?

Social Service Tax Act

Manufacturers Exempt from 7% PST Production machinery and equipment purchased or leased by manufacturers are exempt from tax.

Must meet definition of manufacturer and equipment must be used primarily and directly in manufacture of qualifying tangible personal property.

6Employee Investment Act The Labour-Sponsored Employee Investment Act provides investors with the opportunity to receive a provincial tax credit of 15 per cent and a federal tax credit of 15 per cent on their investment in the fund. The funds seek long-term equity investment opportunities in companies seeking ‘expansion’ capital.

Labour-Sponsored Funds are registered under the Employee Investment Act and are owned by shareholders who rely on professional management to select investments. Two Labour-Sponsored Funds that are registered in the province include Altura Growth Fund (EVCC) Inc., and the Working Opportunity Fund (EVCC) Ltd.

Social Service Tax ActThe B.C. Social Service Tax is a provincial sales tax of 7 per cent levied on the purchase price of tangible personal property. Eligible manufacturers purchasing production equipment and machinery can apply for an exemption of the sales taxviii.


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38


Value Chain / Ecosystem

7


39

The diagram illustrates the value chain/ecosystem of the ICT sector in B.C. Organizations that support or provide services to the sector are placed into the top and middle of the diagram according to their function as follows:

Industry support organizations

Industry infrastructure

Research facilities

Specialized finance organizations

Education and human resource support organizations.

ICT companies are then slotted into five activity categories that describe each company’s placement along the value chain:

Engineering services

Components and electronics

Hardware

Software

Infrastructure and service providers.

Companies may be located in more than one activity category. Although there are over 6,000 companies in B.C.’s ICT sector, these diagrams do not represent an exhaustive list of those companies. Rather, the diagrams are intended to illustrate the strengths of the sector with a selection of companies.

•

•

•

•

•

•

•

•

•

•

40

IBM CanadaDynavar Networking

••

CGIQuartech SystemsSierra Systems GroupIBM Canada

••••

Strategic Consulting Outsourcing Services

Unitec International ControlsAMEC

••

3M Touch SystemsAlpha TechnologiesArgus TechnologiesConveda Corp. Cray Inc.Creo (acqd by Kodak)Extreme CCTVSeanix TechnologyCorinex Global

•••••••••

Components and Electronics Hardware

Research Facilities BCNETUNBC HPC UBC

Advanced Materials and Processing Engineering LaboratoryInstitute for Computing Information and Cognitive Systems

•

•

Industry InfrastructureTriumfWestGrid

••

Engineering Services

Industry Support Organizations British Columbia Technology Sector Profile

Apex-Micro ManufacturingAscalade TechnologiesCreation TechnologiesD-Wave SystemsDorigo SystemsHoneywellNorthern Airborne Technology

•••••••

SFUCentre for Systems ScienceMathematics of Information and Complex SystemsInterdisciplinary Research in the Mathematical and Computational Sciences CentrePolyLab (Sun Technology and Research Excellence Centre)

••

•

•

UVICCentre for Advanced Materials and Related Technology

BCITGroup for Advanced Information TechnologyInternet Engineering Lab

•

•

•

EDS CanadaBearingPointAccenture

•••

Offshore Systems InternationalPacific Insights ElectronicsPMC-SierraVeriteq InstrumentsExtreme CCTV

•

••••

Infrastructure and Service Providers

41

BC Technology Industry Association (BCTIA)New Media BCWNBC

•••

Lobbying and Industry Support

Software

Specialized Finance Banyan Capital PartnersBarkley Capital CorporationBC Advantage FundsBC Angel ForumBC Discovery FundDiscovery CapitalGreenstone Venture PartnersGrowthWorksOVP Venture PartnersMDS Capital

••••••••••

Education and HR SupportCanadian Technology Human Resource BoardSoftware Human Resource Council

••

ICT Sector: Opportunities for Investment, Talent and Enterprise

Absolute Software Corp.ACCPAC Canada (acqd by Sage Software)ACL Services Ltd.Business ObjectsChancery SoftwareEclipsys Corp. Fincentric Corp.Maddocks SystemsMaximizer SoftwareOpen Solutions CanadaPivotal Corp. Raytheon Canada

••

••••••••••

SophosThe Active NetworkThomson Financial Treasury ServicesTop Producer SystemsTriant TechnologiesEnterra SystemsDataWave SystemsE-xact TransactionsDynagent (eXL Information)RedkneeOrbital TechnologiesWhitenoise Laboratories

•••

•••••••••

Pender Fund Capital Management, Ltd.Praximis Technology Ventures Inc.Smart Seed Equity Inc.TELUS VenturesVancouver Angel Technology NetworkVentures WestWorking Opportunity FundWUTIF CapitalYaletown Venture Partners

•••••••••

Epic DataProSoft SolutionsMacDonald Dettwiler and AssociatesHyperWalletApparent NetworksColligo Networks

•••

•••

TelusBell Canada360 NetworksAlcatel Canada, Inc.Call-Net Enterprise Group TelecomMTS AllstreamNavigata CommunicationsNEC CanadaNetNation CommunicationsRadiant CommunicationsTeligence CommunicationsPeer 1 Network Enterprises

•••••••••••••

BC Photonics Industry AssociationBC Innovation Council

••

42


Industry Contacts

8

43


ACETECH Suite 900 – 1188 West Georgia Street Vancouver, BC, V6E 4A2 Telephone: (604) 683-5852

British Columbia Technology Industry Association Suite 900 - 1188 West Georgia Street Vancouver, BC, V6E 4A2 Telephone: (604) 683-6159 Fax: (604) 683-3879 E-mail: [email protected]

BC Innovation Council Suite 900 - 1188 West Georgia Street Vancouver, BC V6E 4A2 Phone: (604) 438-2752 Fax: (604) 438-6564 E-mail: [email protected]

Innovation Resource Centre Suite 101, 1584 Seventh Avenue Prince George, BC, V2L 3P4 Phone: (250) 564-2755 Fax: (250) 564-2754 E-mail: [email protected]

VIATec - Vancouver Island Advanced Technology Centre 2201 – 4464 Markhan Street Victoria, BC, V8Z 7X8 Phone: (250) 483-3214 Fax: (250) 483-3201 E-mail: [email protected]


Endnotes

i The table includes public companies and private companies for which revenue and employment information are readily available.

ii Technology Partnerships Canada is a Special Operating Agency of Industry Canada that makes strategic investments to support research, development and innovation. These investments are intended to encourage private sector investments in research and development. The TPC program is currently under review by the federal government and will not be accepting new applications. TPC will continue to monitor and administer the existing $3.5 billion portfolio.

iii PricewaterhouseCoopers, Tax Facts and Figures for Individuals and Corporations, 2006.

iv Susan Ward. Don’t Miss Out on the SR&ED Tax Credit Program. From “Your Guide to Small Business Canada” available at http://sbinfocanada.about.com/od/taxinfo/a/SREDtaxcredit.htm

v PricewaterhouseCoopers, Tax Facts and Figures for Individuals and Corporations, 2006

vi Ministry of Small Business and Revenue, Bulletin IFA 001, International Financial Activity Overview, Revised February 2006

vii To the extent credit is made available by the Ministry of Economic Development.

viii Ministry of Small Business and Revenue, Bulletin SST 054, Manufacturers, Revised February 2003

ix PricewaterhouseCoopers, Tax Facts and Figures for Individuals and Corporations, 2006

Research for this profile was conducted by PWC

Documents

Information and Communication Technologies Sector · In addition, B.C. offers one of the most progressive and cost-effective tax environments in North America. For these reasons it