Joel Semeniuk, chief strategy officer at Communitech poses for photos in the company’s offices in Kitchener, Ont., on February 26.Geoff Robins/The Globe and Mail
The Buy Canadian movement sweeping the country is an opportunity to boost domestic investment in homegrown digital innovation, tech entrepreneurs and experts say.
Canada’s tech sector has long lamented the difficulty of scaling up a business domestically, said Jon Ferguson, the vice-president of cyber and DNS at the Canadian Internet Registration Authority (CIRA). But as tariffs and the threat of a major trade war are hurled across the border by President Donald Trump, Mr. Ferguson said digital goods and services should be included in Canada’s drive to strengthen and fortify its economy.
“We can make hay, if you will, in the digital economy much faster, in a much bigger way, than we can on the physical side of stuff,” he said.
Experts say changes need to be made to Canada’s lax approach to incentivizing the procurement of domestic digital products, especially with Mr. Trump threatening retaliatory actions based on his dislike of Canada’s digital services tax, which requires U.S. tech giants such as Amazon, Google and Facebook to pay a 3-per-cent levy on revenue generated from Canadian users.
On Feb. 21, White House officials said Mr. Trump had signed a memorandum to impose tariffs on countries that levy digital service taxes on U.S. tech companies, claiming they were discriminatory.
While placing an order for Canadian lettuce or lumber to replace a U.S. product may have a more tangible retaliatory flair to it, Mr. Ferguson said lead times and supply chains are more complicated for physical goods than they are for digital ones.
“On the digital side, if tomorrow I got a 300 per cent higher demand for buying my product as a Canadian operator, then it’s much easier for me to meet that demand,” he said.
Plus, Canadian alternatives already exist for many digital services that businesses and governments rely on, said Joel Semeniuk, the chief strategy officer at Communitech, a hub for tech founders in Kitchener, Ont.
“It’s not like we’d be giving up price or performance for our Canadian solutions,” he said.
However, to make the switch, the federal government must provide more incentives and information about how to Buy Canadian in the digital world, Mr. Semeniuk said.
“It’s about time for us to rethink what procurement looks like,” he said.
Especially as software entrepreneurs are being told that they, too, must prepare for the threat of tariffs despite the largely intangible nature of their work, according to a handful of Canadian lawyers who spoke with The Globe and Mail.
In an e-mail, Jullian Paquin, a spokesperson for Public Services and Procurement Canada, said the government is closely monitoring the trade situation with the U.S. and referred to its Feb. 2 announcement detailing Canada’s list of retaliatory tariffs.
But Mr. Semeniuk said the drive to procure Canadian solutions simply isn’t strong enough to stop tech companies from moving to the U.S. to access capital and gain market traction, taking all of their value and jobs with them.
“We have enterprise AI tech companies like Cohere and Waabi that are amazing and world class, yet we still default to non-Canadian-based technology for even thinking about AI, which is something we pretty much invented here in Canada,” he said.
So, what does a domestic solution look like? Dante Morra, founder and chair of the CAN Health Network, said the model his organization has built is a success story when it comes to driving economic prosperity and innovation – and it’s replicable.
Founded in 2019 and mostly funded by the federal government, CAN Health connects health care providers with Canadian tech companies to help them scale and commercialize across the country.
“It’s been an incredibly successful pan-Canadian strategy to improve health care, improve prosperity and, most importantly, improve economic sovereignty of the country,” Dr. Morra said.
Joshua Liu, co-founder and chief executive officer of SeamlessMD, which helps digitize patient care, said his firm is one of the many Canadian tech startups that fled to the U.S. for traction after struggling with adoption domestically.
CAN Health was a key factor in driving SeamlessMD’s eventual success within Canada, Dr. Liu said. Before the company joined the network, he said, about 80 per cent of its business was conducted in the U.S. Now, it’s closer to 50/50.
“Before CAN Health, there was a lot of fragmentation. So you’d have all these hospitals or health authorities doing their own thing, not realizing that there’s lots of innovations their peers were using that would apply to them as well,” he said.
Health care may be among the first sectors in Canada to adopt this type of integrated marketplace, but it doesn’t have to be the last, Dr. Morra said. Municipalities, agriculture, education and mining are a few of the other industries where a similar model could be applied.
“This is a ready now, living solution … from the Yukon to the Atlantic to Quebec that is working and improving companies. It can be copied,” he said.
It’s easy to focus the Buy Canadian movement on physical products with traceable supply chains, Mr. Semeniuk said. But while those items are critical to Canada’s economy, it’s digital systems that keep them moving.
“Digital is our new oil.”