Thank you, Mr. Chairman, for having ITAC participate and comment on your study on e-commerce in Canada.
ITAC represents industries in Canada. Many of our members are large companies as well as multinationals, but the vast majority are small and medium size companies in Canada—well over a few hundred.
Canadians are already served with an impressive infrastructure in support of e-commerce activities. They are a digital elite in Internet adoption, broadband penetration, online banking, and social networking. Canada's growth in these areas can be attributed to both private and public sector initiatives, including development and support of digital and broadband networks to develop high-speed access throughout the country. However, with respect to e-commerce and ICT adoption, there are several issues that we need to be aware of.
Despite an increasingly solid infrastructure, Canadian businesses' use of e-commerce and the broad use of ICT remain very low. Canadian technology investment rates are still alarmingly low; we are spending about 60¢ to their dollar in reinvestment. ITAC believes that the effective use of e-commerce and of the entire ICT tool kit increases business productivity across the economy, particularly for small and medium size businesses.
It is important to note that in 2004, an old survey showed that when small companies used online business, the average gain measured over a year was 8% across all their operations, marketing, and online purchasing.
At the highest level, the recommendations made by ITAC on behalf of our constituents concerning the digital economy strategy for Canada outline many items.
More specifically, concerning talent we need to ensure that our young are educated and attracted to ICT as a career choice. We need to get Canada into a broad leadership position within the next generation of broadband by 2017, and to avoid the digital divide of rural versus urban. Government programs can help identify these gaps and close them for greater e-commerce use. Finally, a national ICT strategy will have a direct positive impact on e-commerce.
We also believe that the clear and persistent communication from government and industry leaders that business needs to step up its use of technology is critical to achieving increased productivity and global competitiveness.
The opportunity for increased e-commerce is significant in Canada, and much of it needs to be fulfilled by small and medium size businesses. Canada has more than two million small and medium size businesses. They represent more than 40% of ICT spending and 45% of Canada's GDP. If SMEs go digital and adopt e-commerce technologies, there will be a huge impact on Canada's prosperity, with the ability to access new markets and increase sales and revenues. B2B companies can use the Internet for sales leads, to announce calls, to tender, and to offer products for sale. Effective B2B commerce includes lower costs for selecting suppliers, establishing prices, ordering, and finalizing transactions.
An international review of public initiatives related to the slowing down of e-commerce in several developing countries showed that in Australia, Korea, and the EU as a whole, they needed to acknowledge it and that they have started to take some actions in that direction. A lack of awareness at both the business and the consumer level contributes to lower usage. Government can be a catalyst in improving adoption, both by increased communication and via incentives.
As well, mobility is a critical component of effective e-commerce. We should not only think about buying music and apps on devices. Instead, we should think about doing all transactions on mobile devices; for example, the transfer of funds, the buying of groceries, engaging in everyday trade, and creating a digital wallet.
Finally, ITAC encourages all innovations that support further acceleration of e-commerce. Last year we created a national Ingenious Awards program in which two of the nineteen finalists were e-commerce-based. One was TinyEYE Therapy Services out of Saskatoon. The other one was specific to government, the website buyandsell.gc.ca.
In conclusion, I'd like to reinforce that ITAC wants to participate actively in providing assistance for the move toward increased use of e-commerce in Canada, as it will ultimately drive greater adoption of ICT across the economy and create a net benefit for the Canadian economy.
Thank you, Mr. Chairman.