February, 1995 THE INFORMATION ECONOMY IN CANADA FACT SHEETS (Prepared for The G7 Ministerial Meeting on Information Society) -Canada's information economy can be divided into three main industry sectors: - Communications and Computer Service-Producing industries; - Communications and Information Technology Goods-Producing industries; and - Arts, Cultural and Entertainment industries. -The importance of the information economy is increasing over time as new technology improves the communications infrastructure and as industries which provide content over that infrastructure continue to grow. -Canada has one of the most developed communications infrastructure in the world: more than 98% of households have telephones; 74% have cable television service and 99% of the population can receive off-air broadcasting signals as of 1993. - The communications and computer service-producing industries generated about $35 billion in revenues, provided 260,000 jobs and contributed 4.3% to the gross domestic product in 1994. Overall growth of 6.9% for carriers and 4% for the computer service industries' gross domestic product fared better than the economy average of 3.2% in the last year. - Canada's advanced communications and computing infrastructure, combined with its traditional strengths in digital communications equipment, systems integration and software development, positions Canada well in the race to create the applications that will form the basis of the information economy. - The total output of the communications and information technology goods-producing industries was $15.4 billion in 1992 which was an increase of 12.7% from 1988. These industries provided some 94,000 jobs and contributed 1.4% to the gross domestic product in 1992. - The arts, cultural and entertainment industries are also big contributors to Canadian employment. For example, the book and periodical publishing, film and video and sound recording industries and heritage institutions alone employed over 60,000 people in 1992. Related industries are estimated to employ approximately this number again. - Revenues generated by the book and periodical publishing, film and video production and sound recording industries together with heritage institutions reached $5 billion in 1992. Including estimated revenue figures for the other arts, cultural and entertainment industries, produced total revenues in excess of $10 billion in 1992. These industries will have an increasing role to play as content industries for the information economy. - As Canada moves towards the Information Society, many new industries are being created; while technology is causing many existing industries to change and to become increasingly a part of the information economy. - Statistically, it will be complex to keep track of the changes and to be able to analyze the old as well as new industries. - Canada has been leading in efforts to remain current and is collaborating with other countries in order to have consistent, current data and more importantly to analyze the changes arising from the move towards the information society. Table 1 THE INFORMATION ECONOMY IN CANADA List of Industry Sectors 1. Communications and Computer Service-Producing Industries: - telecommunications service industry - broadcasting industry * - computer and software service industry 2. Communications and Information Technology Goods-Producing Industries: - telecommunications equipment industry - computer equipment industry - consumer electronics industry - electronic parts and components industry - certain instrumentation equipment industries 3. Arts, Cultural and Entertainment Industries: - broadcasting industry * - book and periodical publishing industries - newspaper industry - film and video industry - sound recording industry - performing arts industry - heritage institutions (museums and parks) - libraries - theatrical and other staged entertainment industries - commercial spectator sports clubs - sports and recreational clubs - gaming and wagering industries - amusement and recreational service industries * The communications industry's data include those of the broadcasting industry. While the broadcasting industry is noted in both 1 and 3, the data are included in 1. - Highlights on each of these sectors are provided below. The data were provided by Statistics Canada. February, 1995 THE INFORMATION ECONOMY IN CANADA FACT SHEETS (Prepared for The G7 Ministerial Meeting on Information Society) PART 1: COMMUNICATIONS, COMPUTER AND INFORMATION TECHNOLOGY SERVICE-PRODUCING INDUSTRIES: - The players in the TELECOMMUNICATIONS SERVICE INDUSTRY include: the Stentor Alliance of 9 major regional telephone companies; 50 independent telephone companies; Canada's satellite and overseas telecommunications carriers (Telesat and Teleglobe); a host of other carriers such as Unitel, Sprint Canada and Westel; 2 national cellular carriers (Rogers Cantel and Mobility Canada); a growing number of radio common carriers; and some 150 resellers. - Canada's BROADCASTING INDUSTRY consists of the traditional off-air radio, television and cable television service providers. In 1994, approximately 42% of its revenues were generated by the cable television services, including pay-television and speciality services. - The COMPUTER SERVICE INDUSTRY consists of software products development, professional and processing services and is composed of approximately 14,000 establishments with over 81% having less than 250 employees. - The telecommunications carriers' contribution to the gross domestic product was $16 billion or 3% of the $528 billion total gross domestic product in 1994. Similarly, the broadcasting industry's contribution was 0.4%, while the computer service industry's was 0.9% of the total economy. The economy average was 3.2% in 1994. - The telecommunications carriers' output grew 6.9% or twice as fast as Canada's gross domestic product in 1994. The computer service industry's rate of growth was 4% during the same time period. The broadcasting industry fared significantly worse than the whole economy with a rate of decline in excess of 3%. - In 1994, the telecommunications carriers provided 120,000 jobs, the computer service industry 92,000 jobs and the broadcasting industry the remaining 48,000 jobs. While there was no change in the number of jobs provided by the telecommunications carriers and the broadcasting industry from 1993, jobs increased by a remarkable 18,000 in the computer service industry. - Earnings of employees in the telecommunications, computer and broadcasting industries was substantially higher than average. The average annual salary in the computer service industry was $46,000. It was $44,000 for the other two industries. These earnings compare favourably with the average $37,000 for the Canadian economy. - In 1994, annual revenues for the telecommunications carriers amounted to about $15 billion. Estimated figures for other related industries would increase the revenues by an additional $3 billion. The computer service industry earned almost $15 billion or 41% and the broadcasting industry earned $6 billion or 17%. - Profit margins for the telecommunications carriers were above 20% in 1994. It ranged between 5% to 7% for the computer service industry and around 15% for the broadcasting industry. - The total assets of the three industries approached $60 billion in 1994. The telecommunications carriers accounted for $40 billion or two-thirds of this total. The assets were valued at $6.5 billion or 11% for the computer service industry and $13 billion or 22% for the broadcasting industry. February, 1995 THE INFORMATION ECONOMY IN CANADA FACT SHEETS (Prepared for The G7 Ministerial Meeting on Information Society) PART 2: COMMUNICATIONS, COMPUTER AND INFORMATION TECHNOLOGY GOODS-PRODUCING INDUSTRIES: - The telecommunications, computer, consumer electronics, electronic parts and components and certain instrumentation goods-producing industries consisted of 1,131 establishments in 1992. - The TELECOMMUNICATIONS EQUIPMENT INDUSTRY has been driven by growth in the domestic telecommunications services market. Canada is the home base for Northern Telecom, one of the world's five largest telecommunications equipment suppliers. There are also numerous small to medium-sized telecommunications equipment enterprises that become world leaders in their product niches. - The Canadian COMPUTER EQUIPMENT INDUSTRY is composed of a few multinational subsidiaries and over 200 Canadian based small and medium sized enterprises. These firms are designing and manufacturing leading edge computer systems, peripherals, storage systems, computer cards, computer parts, terminals and monitors. The industry as a result produces a very diverse set of innovative information technology enabled products. - The CONSUMER ELECTRONICS INDUSTRY comprises makers of television sets, radios, speakers, domestic sound reproduction equipment, audio and video recorders and automobile stereo equipment. - The ELECTRONIC PARTS AND COMPONENT INDUSTRY is composed of approximately 300 companies. The manufacturing shipments of this sector are dominated by the presence of IBM's multi-chip module facility in Bromont, Quebec. The industry's six principle product areas are: printed circuits, semiconductors, capacitors, resistors, switches and connectors. Printed circuits and semiconductors account for the bulk of its trade. - The INFORMATION TECHNOLOGY INSTRUMENTATION EQUIPMENT INDUSTRY has over 450 establishments, most of them being small and medium sized, with high growth potential. The principle products are: process controllers, electronic testing equipment, medical devises and space navigation equipment. - In 1992, the COMMUNICATIONS, COMPUTER AND INFORMATION TECHNOLOGY GOODS-PRODUCING INDUSTRIES contribution to gross domestic product was $6.4 billion or 1.4% of the total economy. - With research and development (R&D) spending of $1.5 billion annually, they are Canada's most R&D intensive industries, accounting for 15% of all R&D spending. - Canada's strengths are in digital switching, advanced broadband networking, data networking and mobile wireless communications equipment positions the industry to take advantage of burgeoning opportunities. - Domestic exports of these industries amounted to $9.9 billion in 1992, an increase of 59.9% from 1988. During the same period, imports grew from $14.1 billion in 1988 to $19.2 billion in 1992, representing a 35.4% increase. In spite of the higher rate of growth of exports, their trade deficit grew from $8.0 billion in 1988 to $9.3 billion in 1992. - During the same five year period, total output of these industries, as measured by the value of manufacturing shipments, increased. Total output was $11.9 billion in 1988 and $13.3 billion in 1992. - There has been a steady decrease in the number of jobs created by these goods- producing industries from 102,174 in 1988 to 99,528 in 1990 and 93,684 in 1992. Total salaries and wages continued to be around $3.3 billion. February, 1995 THE INFORMATION ECONOMY IN CANADA FACT SHEETS (Prepared for The G7 Ministerial Meeting on Information Society) PART 3: THE ARTS, CULTURAL AND ENTERTAINMENT INDUSTRIES: - The communications industry's data include those of the BROADCASTING INDUSTRY. However, the broadcasting industry is also considered to be part of the arts, cultural and entertainment industries. Information on the broadcasting industry was provided in Part 1 of the fact sheets. - In 1992, the BOOK AND PERIODICAL PUBLISHING INDUSTRIES AND THE NEWSPAPER INDUSTRY contributed $4 billion to the total gross domestic product. - Revenues of the newspapers industry were $2.9 billion in 1992. - Revenues generated by the 367 book publishers and exclusive agents were $1.6 billion in 1992. These firms published 9,056 new titles and reprinted 7,419 titles. Total profits averaged around 5.6% of revenues. - The 1,047 periodical publishers earned $852 million in revenues and recorded an average profit of 5.4% of revenues in 1992. There were 1,400 periodicals sold with an average circulation per issue of 37,000 copies. - The book and periodical publishing provided full-time employment for 11,300 people and an additional 1,600 part-time jobs in 1992. Total salaries and wages amounted to $ 470 million. - The FILM AND VIDEO INDUSTRY is divided into four main activities: production, laboratory and post production services, distribution and exhibition. Despite the unfavourable economic climate of past few years, there are signs that the film and video industry is coming of age. In 1992, it contributed $824 million to the gross domestic product. - Production for television, including commercials, accounted for 69% of all 16,113 productions created for the market in 1992. - Revenues generated by producers reached $697 million in 1992; post-production activities revenues totalled $309 million while film distributors and videocassette wholesalers received $1.2 billion in revenues, and exhibitors earned $510 million. - The industry provided full-time and part-time jobs for 17,900 employees and for 7,800 freelancers. Wages and salaries totalled $431 million. - Technological developments are opening markets and creating new opportunities for this dynamic industry. More growth is expected as the new knowledge-based economy continues to expand. - One portion of the SOUND RECORDING INDUSTRY is engaged in the creation, replication and distribution of musical recordings and managing intellectual property rights associated with these works. - The record production and distribution segments of the industry contributed $240 million to the gross domestic product in 1992. - The music-instrument manufacturing segment of the industry contributed $260 million to the gross domestic product in 1992. - In 1992, this industry released 6,275 new recordings, sold 86 million compact discs (CDs), tapes and vinyl albums. It generated $834 million in total revenues with a net profit of $136 million. - The industry provided employment for 2,800 people and dispersed $87.1 million in salaries and wages in 1992. - Rapid advances in technology today are challenging both the traditional way music is created, produced and the way it is distributed to consumers. - PERFORMING ARTS can be described as consisting of four general disciplines of: theatre, music, dance and opera. In 1992, the number of live performances by professional, non-profit organizations increased by 10% from the previous year, to 39,354. Attendance also increased by 6% to 14 million. - Revenues were $407 million in 1992 with 52% generated by theatres. Salaries and wages reached $231 million with 47% allocated for those employed in the theatres. - The operating surplus of performing arts organizations reached $2 million. However, many organizations are experiencing financial difficulties, particularly in the field of music and opera. - Overall, performing arts, including for-profit organizations, provided employment for 88,800 people and contributed $532 million to the gross domestic product in 1992. - The HERITAGE INDUSTRY consists of museums and related institutions and nature parks. In 1991, heritage institutions contributed close to $1 billion to the gross domestic product. - Attendance continued to increase 3% annually despite a reduction in the numbers of institutions from 2,300 to 2,260 from 1990 to 1992. Revenues for 1992 totalled $1.1 billion; this represents a 5% decrease from 1991 revenues. - Heritage institutions generated 32,300 full and part-time jobs in 1992 and paid $658 million in salaries and wages. In addition, 45,000 people worked as volunteers. - Canada is a world leader in a number of heritage areas, and efforts are planned to promote and commercialize Canada's heritage products, know-how and services on the international scene. - The majority of LIBRARIES are in the public sector of the economy. All libraries contributed over $1 billion to the gross domestic product in 1992. - Revenues of public libraries were $675 million in 1990. - In 1992, libraries provided employment for 33,560 people. - The technological developments are creating new opportunities for libraries as they move towards electronic delivery of information to the public. - OTHER ARTS, CULTURAL AND ENTERTAINMENT INDUSTRIES encompass: theatrical and other staged entertainment services, commercial spectator sports clubs, sports and recreational clubs, gaming and wagering, and other amusement and recreational services. - The industries, excluding lotteries, consisted of some 16,000 small and medium sized firms and registered revenues in excess of $5 billion in 1991. - Households and individuals make up the majority of these industries' client base. - In general, salaries and wages account for around 30% of the industries' expenses. The majority of these industries create part-time jobs. - Technological advances are making it easier and less expensive to manufacture, distribute and receive entertainment products and services. Specifically, professional sports have strong links to broadcasting, cable television and wagering industries. Without links to electronic media and the fees generated by those links, fewer professional sport teams would have been formed. These links will continue to grow and strengthen as electronic media expands to include more modes of distribution. FURTHER REFERENCES STATISTICS CANADA: Statistics Canada, "Canadian Standard Industrial Classification for Companies and Enterprises 1980" . Statistics Canada, "Standard Industrial Classification 1980" . Statistics Canada, "Announcement: Revision of the 1980 Standard Industrial Classification, January, 1994" . Statistics Canada, Non-catalogued publication "Selected Economic, Financial and Cultural Indicators for the Cultural Industries Sector" . Statistics Canada, "Services Indicators" (Catalogue 63-016) Statistics Canada, "Radio and Television Broadcasting" (Catalogue 56-204) Statistics Canada, "Cable Television" (Catalogue 56-205) Statistics Canada, "Film Industry" (Catalogue 87-204) Statistics Canada, "Sound Recording" (Catalogue 87-202) Statistics Canada, "Book Publishing" (Catalogue 87-210) Statistics Canada, "Periodical Publishing" (Catalogue 87-203) Statistics Canada, "Printing, Publishing and Allied Industries" (Catalogue 36-351) Statistics Canada, "Heritage Institutions" (Catalogue 87-207) Statistics Canada, "Performing Arts" (Catalogue 87-209). Statistics Canada, "Public Libraries" (Catalogue 87-205). FURTHER REFERENCES INDUSTRY CANADA: Industry Canada, "Insight", Annual Industry Canada, "The Canadian Telecommunications Service Industries: An Overview Part 1: The Domestic Situation", November 1994. CANADIAN HERITAGE: Canadian Heritage, "The Canadian Periodical Publishing Industry: An overview", February 1994. Canadian Heritage, "An Overview of the Film Distribution and Exhibition Industries in Canada (1988-1992)", October 1994 Canadian Heritage, "The Film and Video Industry in Canada: An Overview", April 1994. Further Information can be acquired from: Co-Chairs of the Canadian G7 Working Group on Economic Measuring Tools: Dora Mozes (613) 998-4367 Industry Canada Luis Leigh (613) 992-2151 Department of Finance