In this article, we will take a look at the most innovative companies in Canada. If you want to explore similar companies, you can go to 5 Most Innovative Companies in Canada.
Innovation comes with years of research and experimentation. Canadian inventors are pioneers of some of the notable innovations of the modern age such as universal standard time in 1883, peanut butter in 1884, and insulin in 1922 - to name a few. These innovations have had a vital impact in their respective industries and are still in use today. Canada, being one of the wealthiest countries in the world, has the capacity to drive innovation across different industries and markets. Canada is the eighth wealthiest country in the world with a total net worth of $11.26 trillion, accumulating a global wealth share of 2.5%, as per Credit Suisse’s Global Wealth Report of 2023. While the wealth per capita is around $369,577, one of the highest in the world. Since 2012, Canada’s wealth has grown by 44.54%, as of 2022.
Canada's Economic Outlook
The developed global economies have struggled in 2023 due to a rise in inflation and interest rates. Canada has suffered from aggressive monetary tightening in recent times, which has harmed the GDP. According to Deloitte's economic outlook for Canada, the country's real GDP dropped by 0.2% in the second quarter of 2023. The GDP per capita is expected to resume growth by the end of 2024. Deloitte forecasts the Canadian economy to end 2023 with a growth of 1% and record 0.9% gains in 2024. At the same time, the IMFreports Canadian real GDP growth at 1.5%.
In the near term, the Canadian economy will continue to suffer from economic downturns, but some positives will help economic stability in the longer term. In 2023, Delottile expects consumer spending to grow at 2% and slightly slow down to 1.2% in 2024. Overall, Deloitte projects the Bank of Canada to improve its monetary policy and expects the Canadian economy to resume growth in 2024. The Canadian economy is expected to have a tough start at the beginning of the new year and gradually return to growth in the latter half of 2024. The Bank of Canada is expected to end its tightening campaign and should reverse its recent hikes by the next spring, as per Deloitte.
Apart from ongoing economic instability, the Canadian economy has evolved over the years. According to Statistics Canada, the Canadian economy has grown by almost 103% since the start of the COVID-19 pandemic, the highest growth among the G-7 economies, as of 2022. The Canadian government says that they are well positioned to overcome the ongoing economic crises. Statistics Canada highlighted the Canadian government's point of view:
“Our economy entered 2023 on a better footing than most of our peers, and with strong economic fundamentals, including robust population growth, a strong labour market, and a well-regulated and well-capitalized financial system, Canada will be able to weather a global economic slowdown.”
For businesses, supply chain issues have eased after the COVID-19 pandemic, with acquiring domestic inputs and maintaining inventories helping in normalization. According to Statistics Canada’s latest Canadian Survey on Business Conditions (CSBC), higher interest rates, inflation rates, borrowing costs, and debt constraints, have had a negative impact on businesses. The sectors with the most optimistic outlook are wholesale, recreation, and manufacturing, while optimism is lowest for transportation, construction, and oil and gas. As per SCBC, business optimism is highest in Quebec at 79% and the Territories at over 70%. Ontario and British Columbia are at the bottom of the list with business optimism of 59% and 63%, respectively.
Business Innovation in Canada
According to Global Entrepreneurship Monitor, the Canadian population involved in entrepreneurship grew more than 50% over the last 10 years. Around 20% of the adult population was planning or starting a business in Canada in 2021. On July 24, Statistics Canada revealed that the government of Canada has announced a $3.3 million investment to support 100 newcomer entrepreneurs in southern Ontario. The Toronto Business Development Centre (TBDC) will guide new entrepreneurs to support innovation and growth across different business ideas. The Canadian government is not only providing financial support to new entrepreneurs, but it is also guiding them with mentorship and other required resources to scale their businesses.
Canada is one of the best countries for investment as it offers investors preferential market access via 14 trade agreements with 49 countries, comprising a market of 1.5 billion consumers. In addition, 98% of EU tariffs are duty-free for Canadian goods through mutual agreements.
Businesses in Canada are shifting towards online payments due to various reasons. As per SCBC, PayPal Holdings, Inc. (NASDAQ:PYPL) accounts for almost 7% of total business payments in Canada and it is expected to cross 10% in the next 12 months. On September 7, PayPal Holdings, Inc. (NASDAQ:PYPL) announced that PayPal Giving Fund is expanding its collaboration with Meta Platforms, Inc. (NASDAQ:META) to allow charitable funding on Facebook and Instagram in the US, UK, Australia, and Canada. On September 28, CNW Group reported that PayPal Holdings, Inc. (NASDAQ:PYPL) has been added as a new payment option by Staples Canada. With the increasing use of online payments, businesses in Canada are switching towards online payment providers and PayPal Holdings, Inc. (NASDAQ:PYPL) remains a top provider among them.
Apart from a large volume shifting towards e-payments, Canada is also progressing swiftly in the clean energy sector. On May 22, CTV News reported that Ford Motor Company (NYSE:F) signed an 11-year deal with a Quebec-based battery manufacturer, Nemaska Lithium. Ford Motor Company (NYSE:F) will potentially purchase 13,000 tons of lithium hydroxide per year from Nemaska Lithium. With this deal, Ford Motor Company (NYSE:F) became the first US automaker customer of Nemaska Lithium.
Similarly, the German automaker, Volkswagen AG (XETRA:VOW) is making an historic investment in Canada. On April 21, CBC reported that Volkswagen AG (XETRA:VOW) will be investing $7 billion to set up its first overseas EV battery manufacturing plant in St. Thomas, Ontario. The construction of the plant is expected to begin in 2024 and is planned to be completed in 2027. The EV battery manufacturing plant in Ontario will be Volkswagen AG's (XETRA:VOW) largest plant to date, which will create around 3,000 direct jobs and 30,000 indirect jobs. Volkswagen AG’s (XETRA:VOW) plant investment will be the largest EV-related investment in Canada, which is a strong development for the Canadian EV industry.
Canadian companies continue to expand their businesses across multiple sectors. Canadian media giant Thomson Reuters Corporation (TSE:TRI) is one of the leading media houses in the world. On August 17, Thomson Reuters Corporation (TSE:TRI) announced the acquisition of Casetext for $650 million. Just like many other companies, Thomson Reuters Corporation (TSE:TRI) is working on generative AI to provide advanced solutions. During the earnings call of the second quarter of 2023, the company pointed to strengthening its generative AI capabilities. Here are some of the comments from Thomson Reuters Corporation (TSE:TRI) Q2 2023 earnings call:
“Looking forward, our confidence around the generative AI opportunity continues to strengthen. We made good progress against our build, partner, buy approach in the second quarter with organic builds progressing and announcements of both an intelligent drafting solution with Microsoft and our intention to acquire Casetext. Since discussing AI on our Q1 call, our conviction around our opportunity to leverage generative AI has strengthened. As a result, we’re accelerating our investment in the short term as we work to leverage these exciting capabilities for the benefit of our professional markets. Our capital capacity and liquidity remain a key asset that we are focused on deploying to create shareholder value. And we made good progress on this during the second quarter.”
Let’s have a look at the companies that are innovating the Canadian economy through their developments across different sectors.
15 Most Innovative Companies in Canada
Toronto, Canada
Our Methodology
To obtain data for the most innovative companies in Canada, we took data from different publications including PwC, Arcus Group, and Canadian Business. We took the top ten companies from each source to compile our list of the 30 most innovative companies in Canada first.
We then calculated the 10-year stock returns of all public companies in our initial list, as of September 27. We hypothesized that a company with higher stock returns has been at the forefront of innovation. We narrowed down our selection to companies that had the highest stock returns and ranked them in ascending order of this metric.
We also considered private companies and we ranked them based on their total funding. Our hypothesis for private companies is that more capital indicates more innovation.
The public companies with stock returns are ranked higher than private companies with total funding amounts, and among the private companies, the ones with the highest total funding are ranked higher. We sourced and cross checked the data for total funding from Crunchbase, Growjo, and Tracxn.
An important note: Shopify Inc.’s (TSE:SHOP) data was available from May 2015, therefore its stock returns are from the last eight years.
Here is the list of the 15 most innovative companies in Canada.
15 Most Innovative Companies in Canada
15. Axonify
Total Funding Amount: $35.2 Million
Based in Waterloo, Axonify is a software firm that was founded in 2011. Axonify offers employee knowledge services through microlearning, with knowledge-on-demand capabilities. Ranked 15th on our list, Axonify is one of the most innovative companies in Canada.
The global companies that are playing an important role in the Canadian economy include PayPal Holdings, Inc. (NASDAQ:PYPL), Ford Motor Company (NYSE:F), Volkswagen AG (XETRA:VOW), and Thomson Reuters Corporation (TSE:TRI).
14. Nymi Inc.
Total Funding Amount: $36.3 Million
Founded in 2011, Bionym Inc. was rebranded to Nymi Inc. and the company continues to transform digital spaces offering workplace wearables through enterprise applications for security, productivity, and health and safety. Nymi Inc. ranks among the most innovative companies in Canada.
13. Busbud
Total Funding Amount: $43.2 Million
Busbud has upgraded the online ticket booking system through its platform. Through Busbud, users can search, compare, and buy tickets in different countries. Based out of Montreal, Busbud makes it to our list of the most innovative companies in Canada.
12. Achievers
Total Funding Amount: $50.7 Million
Achievers was established in 2002 and the company has been an award-winning employee engagement platform. Achievers has innovated employee engagement through its employee voice and recognition solutions that connect the organization’s values and strategy. Achievers is ranked 12th on our list of the most innovative companies in Canada.
11. Maple
Total Funding Amount: $71.7 Million
Founded in 2015, Maple comes with a vision to revolutionize the future of healthcare. Maple is making it easier for Canadians to access doctors, specialists, allied health professionals, and care navigators. Powering the Canadian virtual healthcare system, Maple ranks 11th on our list of the most innovative companies in Canada.
10. Borrowell
Total Funding Amount: $92 Million
Borrowell is making it easier to enhance credit scores and offers weekly credit monitoring, along with innovative financial digital tools. Creating a platform for Canadians to supervise and improve their credit scores, Borrowell makes it to our list of the most innovative companies in Canada.
9. Breather
Total Funding Amount: $131.5 Million
Breather offers a modern workspace for rent around the world. Based in Montreal, Breather is changing the workspace environment through its growing network for productive spaces. Breather is one of the most innovative companies in Canada.
8. Ecobee
Total Funding Amount: $155 Million
Ecobee offers home automation services through its products which include smart thermostats, smart light switches, temperature and occupancy sensors, and contact sensors, among others. Ecobee is evolving the home automation industry in Canada and makes it to our list of the most innovative companies in Canada.
7. Vendasta
Total Funding Amount: $160 Million
Founded in 2008, Vendasta offers end-to-end digital marketing and brand management solutions to small and medium-sized businesses. Creating innovative solutions for small and medium enterprises, Vendasta ranks among the most innovative companies in Canada.
6. Wealthsimple Inc.
Total Funding Amount: $901 Million
Founded in 2014, Wealthsimple Inc. offers smart investing tools and personalized consultancy for investors. The online investment firm is making a difference in helping investors with its online investment services. Wealthsimple Inc. ranks among the most innovative companies in Canada.
Some of the leading global companies that are investing in the Canadian economy include PayPal Holdings, Inc. (NASDAQ:PYPL), Ford Motor Company (NYSE:F), and Volkswagen AG (XETRA:VOW).
