Canada has a growing FinTech sector concentrated in major cities like Toronto, Montreal, and Vancouver. The sector employs over 55,000 people across 36,000 companies. Canada offers competitive advantages for FinTech startups and investment due to lower business costs, competitive tax rates that have declined in recent decades, and incentives like the SR&ED tax credit program that supports research and development. Major deals in the Canadian FinTech space include $100 million for Shopify and $60 million for Verafin. Canada also has a highly skilled tech workforce and immigration programs to attract international talent.

1. Canada’s FinTech Sector

2. 2
Canada’s FinTech Sector: An Overview
• Direct employment: 55,200
• Financial Services Sector employees over
500,000 people in over 36,000 companies
• Major FinTech clusters: Toronto, Montreal,
Vancouver, Calgary
• Six of the top 10 safest banks in North America
are Canadian, says Global Finance Magazine.

3. 3

4. 4
Canada’s FinTech Sector: Landscape
• Mobile Technology:
– Mobile Banking Payments, Apps and Services
• Cloud/Big Data
– Cloud Enabled Services; Big Data and Predictive
Analytics
• Risk Management
– Governance and risk reporting

5. 5
Canada’s FinTech Sector: Startups
• Financial Crime Detection and Prevention:
– Verafin, nymi, SafePay
• Cybersecurity:
– SecureKey, PHoENIX, sentire
• Payment Tech & E-Commerce
– PopCodes, Sensibill, Shopify, LightSpeed, Crelogix
• Crypto Currency
– Crypto Capital; Blockstream; Wagepoint

6. 6
Largest Canadian Fintech VC Deals
• Shopify: $100 Million
• Verafin: $60 million
• Lightspeed Retail: $35 million
• Blockstream: $21 million
• Financeit: $13 million

7. 7
Canada’s FinTech Sector: Incentives
• Business Cost Savings
– Lower business costs in the G7
– Lowest costs in software design, financial services,
electronics, and telecommunications
– 7.2% lower costs compared to the United States

8. 8
Competitive Tax Rates
• Canada’s federal general corporate tax rate
declined from 29.1% in 2000 to 15% in 2013
• Provincial tax rates also declined from 13.3% in
2000 to 11.1% in 2013;
• Canada’s innovation-based tax programs
incentivize R&D in financial technology. As an
emerging sector, FinTech can greatly benefit
from experimental development (i.e.
technological advancement).

9. 9
International Comparison of Statutory General Corporate Tax
Rates in 2014
39.1
37.0
34.4
30.2
27.5
26.3
21.0
10
15
20
25
30
35
40
45
U.S. Japan France Germany Italy Canada U.K.
%
Marginal EffectiveTax Rate* on New Business Investment, 2014
39.7
34.7
29.8 29.5
26.5
21.8
17.5
20.1
10
15
20
25
30
35
40
Japan U.S. U.K. France Germany Italy OECD
Average**
Canada
%
Comparative Tax Rates

10. 10
SR&ED Tax Incentives
• Companies in Canada that invest in R&D can
apply for the SR&ED tax incentives, irrespective
of size, sector or field of technology
• Eligible activities
– experimental development,
– applied research,
– basic research,
– certain types of work in support of the experimental
development, applied research and basic research.

11. 11
SR&ED Continued
• Eligible expenses include:
– wages and salaries of employees engaged in R&D
work,
– overhead expenses, and
– materials

12. 12
Canada’s FinTech Sector: Incentives
• Highly-Skilled Workforce
– Canada is home to over 55,000 FinTech workers
– Fintech employment has increased 12% since 2008
– Only three other sectors outpaced financial services
in technology job creation.

13. 13
Flexible Immigration Programs
• The Canada Korea Free Trade Agreement
provides access to Korean Business visitors to
Canada
• Business Visitors can stay up to 6 months
without a visa
• Intra-Corporate Transferees can stay up to 7
years depending on category

14. 14
Key CKFTA Benefits
• The CKFTA entered into force on January 1,
2015
• Provides Korean’s Companies located in Canada
protection in a form of a guarantee that they
are treated the same as Canadian companies.
• Trade in financial services help protect
investments.

15. For more information
Contact
Jonathon Kupi
Jonathon.kupi@international.gc.ca
Sangmyun Kim
Sangmyun.kim@international.gc.ca
02-3783-6000
http://www.tradecommissioner.gc.ca/eng/office.js
p?oid=242&cid=517