CANADA’S ROBOTICS INDUSTRY With a 35% annual growth ’S POSITION IN THE GLOBAL in robot orders from 2010-2015, Canada leads ROBOTICS VALUE CHAIN the North American rise The global robotics market is experiencing a push among large manufacturing, oil & gas, strong upswing in demand, with 2014 seeing automotive and electronics companies in in demand for robots, global robot sales increase by 29% (YoY) to Canada to reduce manufacturing labour with strong growth in the 229,261 units–by far the highest level ever costs has resulted in venture capital-funded recorded for one year.2 The automotive and start-up investments in Canada, and automotive, Unmanned electronics industries are the main drivers investments by key foreign companies in of this growth. Growing global demand for the Canadian marketplace. Canadian and Aerial Vehicle (UAV) and silicon-based products such as in-vehicle foreign robotics companies are also currently space segments1 electronics, together with new production working with the Canadian Armed Forces technologies, have brought about an (CAF), with increasing use of robots by first increased need for flexible automation and responders, within law enforcement agencies boosted investments in retooling of factories and on projects such as nuclear automation in these industries. and space exploration.

In other sectors, such as distribution and Foreign investment in the robotics sector defence, bandwidth growth and command has seen a steady upswing in Canada, with & control capacity have resulted in new global incumbents such as ABB, Amazon delivery methods–leading to increased and General Electric making sizeable robot sales in these sectors. Health care is investments for their robotics divisions another sector which is seeing innovative in this country, paralleling the efforts of advances and an increased demand for local Canadian innovators such as MDA, Robotics is the branch of mechanical engineering, medical/assistive robots. Clearpath Robotics, Bionik Labs, D&D electrical engineering and computer science that deals Automation, Kinova Robotics and Provectus with the design, construction, operation and application Canada has been at the forefront of this Robotics. of robots, as well as computer systems for their global robotics investment cycle. A major control, sensory feedback and information processing.

THE ROBOTICS ECOSYSTEM IN CANADA

INDUSTRY

PERSONAL AND INDUSTRIAL ROBOTICS FACTORY AUTOMATION SERVICE ROBOTS

APPLICATIONS

HEALTH CARE DEFENSE AND SECURITY AEROSPACE AUTOMOTIVE ELECTRONICS DOMESTIC

1 Canadian Industrial Machinery (CIM). Industrial Robot Orders Break All Records. 2 International Federation of Robotics. World Robotics 2015: Industrial Robots. 2 ROBOTICS AND AUTOMATION: KEY BUSINESS ATTRACTION FACTORS IN CANADA

Canada is a hotbed of automation potential. The pace of robotics adoption among key Canadian manufacturers is speeding up, and Canada offers robotics companies one of the best test and development regulatory environments in the world. 35% 32% Another important factor is well-established AVERAGE ANNUAL GROWTH AVERAGE ANNUAL GROWTH robotics-centred university and technical IN CANADA’S ROBOT IN CANADA’S ROBOT training with over twenty Canadian universities and technical colleges offering ORDERS (COMPARED TO SHIPMENTS (COMPARED TO programs in robotics, mechatronics, 26% IN NORTH AMERICA) 21% IN NORTH AMERICA) computer control methods, hydraulics FROM 2010 TO 20153 FROM 2010 TO 20154 and pneumatics. This ensures that foreign investors will have readily available talent for their development efforts in Canada.

$201 20+ CANADIAN UNIVERSITIES million AND COLLEGES OFFERING ADVANCED ROBOTICS VALUE OF CANADA’S COURSES AND TECHNICAL OVERALL ORDER OF CERTIFICATIONS 3,222 ROBOTS IN THE FIRST HALF OF 20155

$36 13th CANADA’S GLOBAL million RANKING IN TERMS OF NATURAL SCIENCES AND “ROBOT DENSITY,” OR THE ENGINEERING RESEARCH NUMBER OF MULTIPURPOSE COUNCIL OF CANADA INDUSTRIAL ROBOTS PER FUNDING, FOR A 5-YEAR 10,000 PERSONS EMPLOYED 7 PERIOD, ALLOCATED TO IN MANUFACTURING ROBOTICS R&D CONDUCTED BY ACADEMIC AND BUSINESS INSTITUTIONS6

3 Canadian Industrial Machinery (CIM). Industrial Robot Orders Break All Records. 4 Ibid. 5 Ibid. 6 NSERC. Invests in High-Quality Jobs and Growth. 7 IFR Statistical Department. World Robotics: Industrial Robots 2015. 3 CANADIAN HEALTH CARE IS CANADA HAS ADVANTAGEOUS GLOBALLY RECOGNIZED AS A REGULATIONS FOR THE ROBOTICS INNOVATOR: NORTH TESTING AND DEVELOPMENT AMERICA’S FIRST “FULLY OF UNMANNNED AERIAL DIGITAL” HOSPITAL IS IN VEHICLE (UAV) SYSTEMS

ONTARIO, AND USES ROBOTS Approval times for commercial UAV testing are FOR PATIENT CARE measured in days12 in Canada, compared to the United States, where commercial drone testing The Humber River Hospital in Toronto, Ontario, licences can take months, is generally prohibited uses automated kiosks where patients can enter and companies must seek an exemption from the their information into robotic arms that administer ban. 8 medication. Service robots have been tested Drone operators in Canada also do not need a in Calgary for three years, and are being used 9 pilot’s licence (a requirement in the US), and UAV for child care in Alberta. has 11 testers in Canada can obtain their own private medical robots in clinical practice—more than restricted airspace to test out-of-sight flights.13 anywhere else in Canada.10

THE GOVERNMENT OF CANADIAN MANUFACTURERS CANADA HAS AN INNOVATION- ARE GOING THROUGH A FOCUSSED APPROACH TO MULTI-YEAR ROBOTICS SUPPORTING THE ROBOTICS INVESTMENT UPCYCLE

VALUE CHAIN Canadian firms in a wide range of industry verticals are investing heavily in innovative The Natural Sciences and Engineering Research production technologies to take advantage of Council of Canada’s (NSERC) Canadian Field new processes and retooling of factories that Robotics Network has an annual budget of emphasize flexible automation. $2 million and consists of a network spanning eight universities and 14 partner organizations. With a 35% increase in robot orders from Canada in 2015,14 foreign investors in this country The government of Canada has also deemed are seeing a rise in demand for a wide range robotics a priority area for economic stimulus of industrial robotics applications, including funding, allocating $110 million to the Canadian articulated, collaborative, parallel and paint Space Agency, to principally fund development of robots. rover and robotic arm prototypes.11

8 CTV News. First “fully-digital” hospital in North America to open in Toronto. 12 CBC News. Amazon tests delivery drones at a secret site in Canada—here’s why. 9 CBC News. MEDi robots being used to comfort Alberta Children’s Hospital patients. 13 Ibid. 10 CBC News. 5 ways robots are delivering health care in Saskatchewan. 14 Canadian Industrial Machinery (CIM). Industrial Robot Orders Break All Records. 11 Space.com. Canada Funds Space Robot Projects Amid Competition.

4 ROBOTICS ACTIVITY IN CANADA

GREENLAND

ALASKA (USA)

YUKON

NORTHWEST NUNAVUT TERRITORIES NEW BRUNSWICK NEWFOUNDLAND & LABRADOR BRITISH COLUMBIA ALBERTA MANITOBA SASKATCHEWAN QUEBEC Vancouver / Richmond Saskatoon PRINCE EDWARD ONTARIO ISLAND Calgary Québec City

Winnipeg Halifax NOVA Montréal SCOTIA Toronto UNITED STATES OF AMERICA Waterloo London

British Columbia Saskatchewan Quebec • British Columbia is home to Richmond- • Saskatchewan is seeing the growing • The province of Quebec is a base for based MDA, the robotics firm behind commercial utilization of robotics in the several world-class robotics laboratories Canada’s space shuttle remote manipulator healthcare industry: 11 medical robots with extensive ongoing R&D activity system, or Canadarm. and portable devices are in use in in this space: Laval University robotics • Favourable regulations, optimal clinical practice in the province—more laboratory, École Polytechnique de weather and wide-open testing than anywhere else in Canada. Montréal robotics laboratory, ÉTS grounds have made British Columbia • Saskatchewan is already using Remote Robotics and Command Laboratory, an optimal UAV testbed for global Presence technology, an advanced McGill Centre for Intelligent Machines companies like Amazon. robotics telemedicine platform and University of Sherbrooke IntRoLab that enables health care providers robot lab. Alberta to instantly connect with a patient • Montréal is the base for both global • Alberta’s oil and gas industry is seeing remotely, and perform real-time robotics incumbents and local vendors increasing use of robotics, such as assessment, diagnosis and patient such as ABB, Fanuc, Motoman and Suncor Energy Inc.’s self-driving management.15 Kuka Industrial Robots. trucks, which are being used in Fort • Advanced manufacturing is hard at McMurray’s oil-sands sites. Ontario work at General Electric’s Bromont • Ontario’s manufacturing strength has • Medical robotics has seen sizeable aviation facility, where robots are driven the growth of local robotics commercial advances in Calgary’s building components for some of the automation companies such as hospitals: Alberta’s Children’s Hospital world’s most efficient jet engines. One Clearpath Robotics, ABI Automation is the first in Canada to use service million added person-hours of capacity and Independent Robotics Inc. robots designed to help patients deal was achieved with the help of robotics. with the anxiety of medical procedures.

RECENT ROBOTICS INVESTMENTS IN CANADA • New York-based RRE Venture Capital invested $14 million in • Amazon has chosen British Columbia as a testing ground Ontario-based Clearpath Robotics, along with support from for drone technology, due to favourable regulatory iNovia Capital.16 requirements.19 • China-based Shenzhen Bauzer Investment Group invested • In 2015, ABB invested $70 million in expanding its Canadian $300 million in the acquisition of Ontario-based robotics firm, presence, aimed at creating a new high-tech centre focussing Engineering Services Inc.17 on robotics, remote sensing gear and the transportation 20 • Boston-based Summit Partners invested $60 million in sector. In 2014, ABB Canada partnered with Sheridan 18 College, Ontario, to set up a new ABB Robotics Centre to Waterloo-based drone-manufacturer, Aeryon Labs. 21 provide training in robotics applications.

15 CBC News. 5 ways robots are delivering health care in Saskatchewan. 18 The Record.com. Aeryon Labs takes flight with $60 million in financing. 16 Clearpath Robotics. Clearpath Robotics Raises $14 Million to Accelerate Vision for Ethical 19 CBC News. Amazon tests delivery drones at a secret site in Canada—here’s why. Industrial Robotics. 20 Montreal Gazette. ABB Canada gets new $70-million digs in Technoparc. 17 Engineering Services Inc. Announcements: ESI is announcing the completion of its acquisition 21 Sheridan College. Sheridan and ABB Canada announce partnership to enrich robotics by Shenzhen Bauzer Investment Group Co. Ltd., a company with extensive business operations education, support manufacturers. in China. 5 WHY CANADA FOR R&D AND INNOVATION?

KPMG shows that Canada has emerged once again as the most cost-competitive country in the G7 in which to do business, CANADA-WIDE PROGRAMS with a 14.6% cost advantage over the US. As a world leader in cutting-edge R&D, Canada supports the innovation and In knowledge-based areas such as R&D entrepreneurship of investors through significant incentive support, from both the Services (which includes Product Testing federal and provincial governments, for R&D activity in this country. services), development and testing firms typically enjoy27.8% lower costs Listed here are just some of the programs available to investors and technology relative to their US-based counterparts. innovators in Canada: These cost advantages are significant for foreign investors in the robotics industry, AUTOMOTIVE SUPPLIER INNOVATION PROGRAM (ASIP) where product development and testing ASIP is designed to support product development and technology is the single largest expense during the demonstration projects undertaken by automotive parts suppliers in development phase of a project. Canada that are developing innovative products and/or processes in this sector. These projects could include acquiring advanced manufacturing technology and equipment such as robotics.

STRATEGIC AEROSPACE AND DEFENCE INITIATIVE This program assists investors undertaking strategic R&D in the aerospace, space, defence and security sectors. A key objective of this program is to encourage strategic R&D that will result in innovation and excellence in new or improved products, services and processes.

TECHNOLOGY DEMONSTRATION PROGRAM This program supports investors’ large-scale technology demonstration projects in the aerospace, defence, space and security sectors. Projects funded through this program are expected to be the basis for next- generation manufacturing and services in Canada. The program will support technological development in areas that have significant potential for broad-based and long-term economic benefits to Canada.

INDUSTRIAL RESEARCH ASSISTANCE PROGRAM (IRAP) IRAP provides small and medium-sized investors engaged in technology innovation in Canada with technical advisory services and financial support.

SCIENTIFIC RESEARCH AND EXPERIMENTAL DEVELOPMENT PROGRAM (SR&ED) SR&ED provides investors with refundable tax credits for their R&D activities. This program allows investors to claim expenditures, including: wages and salaries of employees engaged in R&D work, overhead expenditures, material expenditures and contract expenditures for R&D activities performed on behalf of investors in Canada.

For a comprehensive list of programs, please visit: www.investincanada.com

6

INVEST IN CANADA © Her Majesty The Queen in Right of Canada, 2016. Catalogue No. Online: FR5-38/25-2016E-PDF ISBN Online: 978-0-660-05143-7 111 Sussex Drive This document and additional information are available on the web at: www.investincanada.com Ottawa, ON, Canada K1N 1J1 Également disponible en français sous le titre : Investir au Canada - Email: [email protected] industrie robotique du Canada. Website: www.investincanada.com Material for this document was prepared for Invest in Canada by IE Market Research Corporation. @invest_canada All dollars in Canadian currency, unless otherwise specified.