Medical Device Industry Profile
The medical device industry consists of firms that produce a wide range of products used for diagnosis and treatment of ailments, and these products include the following: medical, surgical and dental equipment (including electromedical equipment and related software), furniture, supplies and consumables, orthopaedic appliances, prosthetics and diagnostic kits, reagents, and equipment. Firms that are active only in distribution of medical devices are not included in this profile.
Size and Structure of the Industry 1
- The medical device manufacturing and development industry consisted of 1101 facilities, comprising approximately 998 firms. (An additional 685 facilities, operated by 602 firms, solely engaged in distribution were not included in the following analysis.) Medical device manufacturing and development facilities were generally small in size as more than half (57 percent) had fewer than 25 employees and 37 percent had from 25 to 49 employees. Of the remaining facilities, only 45 (4 percent) were of medium size (50 to 150 employees), and less than 1 percent were large (greater than 150 employees).
- Approximately 90 percent of the medical device facilities were Canadian owned, unchanged from 2000 2. Foreign-owned facilities tended to be larger as 21 percent had 50 or more employees, compared to just 4 percent of domestically-owned facilities.
- Medical device-related employment rose to approximately 26,000, compared to employment of 22,000 in 2000.
- The industry was distributed across Canada, although concentrated in Ontario and Quebec where 42 percent and 32 percent, respectively, of all facilities were located. Twenty-two percent of facilities were located in Western Canada and 4 percent in Atlantic Canada.
- Average facility employment was small at 23 employees. Average facility employment was largest in Quebec (27) and Ontario (25) and below average in Western Canada (16) and Atlantic Canada (11).
Table 1: Distribution of Canadian Medical Device Facilities by Size
| Number of Employees |
Number of Facilities |
| 1 to24 |
634 |
| 25 to 49 |
408 |
| 50 to150 |
45 |
| More than 150 |
8 |
| Not Classified |
6 |
Table 2: Distribution of Canadian Medical Device Facilities by Region
| Region |
Number of Facilities |
| Atlantic |
1 |
| Quebec |
356 |
| Ontario |
463 |
| West |
241 |
Industry Revenues Depend Significantly on Exports
- In 2008, the size of the Canadian medical device market was valued at $6.4 billion. The Canadian medical device market increased at a compound annual growth rate (CAGR) of 2.0 percent from 2000 to 2008 3.
- Canada's exports of medical devices increased at a CAGR) of 5.5 percent from 2000 to 2009 as exports increased from $1.6 billion in 2000 to $2.6 billion in 2009. During the same period, import growth was also strong although lower at a CAGR of 4.6 percent. Despite the higher CAGR of exports compared to imports, the significantly higher level of imports resulted in the medical device trade deficit having increased from $1.8 billion in 2000 to $2.5 billion in 2009.
- The United States remains overwhelmingly the primary market for Canadian medical device exports and the destination for approximately 71 percent of all medical device exports in 2009. However, there is an increasing diversification of destination markets for Canadian medical devices. In 2009, the other leading export markets for Canada were Germany, a destination for 4.1 percent of Canadian medical device exports, the United Kingdom (3.4 percent) and the Netherlands (2.0 percent).
- Since 2000, there has also been a shift in the source of Canada's medical device imports. Although the United States still accounted for over half of all imports in 2009 at 51.1 percent, the share is down from 68 percent in 2000. Since 2000, China, Mexico and Ireland have more than doubled their share of the Canadian market with CAGRs of sales of 15.6 percent, 18.3 percent and 17.3 percent, respectively. Higher average growth rates were also posted for imports from Germany (11.3 percent) and Switzerland (10.0 percent). China, Mexico, Ireland, Germany and Switzerland represent about 23.9 percent of the import market.
- Canada's trade in medical device products is categorized using the Harmonized System (HS). The accompanying tables list the top ten exports (using the 8-digit classification) and the top ten imports (using the 10-digit classification) according to Canadian dollar value and share of total dollar value.
Table 3: Canadian Medical Device Exports and Imports ($ billions)
| Year |
Exports |
Imports |
| 2000 |
1.6 |
3.4 |
| 2001 |
1.8 |
3.9 |
| 2002 |
1.9 |
3.8 |
| 2003 |
2.1 |
3.9 |
| 2004 |
2.2 |
4.0 |
| 2005 |
2.4 |
4.3 |
| 2006 |
2.5 |
4.4 |
| 2007 |
2.4 |
4.5 |
| 2008 |
2.6 |
4.9 |
| 2009 |
2.6 |
5.1 |
Table 4: Canadian Exports of Medical Devices by Harmonized System Code, 2009
(Total Exports: $2.56 billion)
| Top Ten Exports by HS code (8-digit level) |
$ Billions |
Share of Total Exports |
| Source: Statistics Canada, World Trade Atlas 2009 |
| Sanitary articles of paper |
0.569 |
22.2% |
| Composite diagnostic or laboratory reagents |
0.275 |
11.0% |
| Opacifying prep, X-ray; diagnostic reagents |
0.228 |
8.9% |
| Medical, surgical, dental or veterinary furniture |
0.169 |
6.6% |
| Instruments and appliances used in medical or veterinary sciences |
0.159 |
6.2% |
| Parts and accessories for application based on the use of X-rays |
0.136 |
5.3% |
| Electro-diagnostic apparatus |
0.105 |
4.1% |
| Mechano-therapy application; massage applications |
0.099 |
3.9% |
| Electro-cardiographs |
0.087 |
3.4% |
| Needles, catheters, cannulae and the like |
0.077 |
3.0% |
| Top Ten Exports by HS Code |
1.904 |
74.3% |
| All other HS codes |
0.659 |
25.7% |
Table 5: Canadian Imports of Medical Devices by Harmonized System Code, 2009
(Total Imports: $5.050 billion)
| Top Ten Imports by HS code (10-digit level) |
Billions $ |
Share of Total Imports |
| Source: Statistics Canada, World Trade Atlas 2009 |
| Instruments and appliances used in medical, surgical procedures |
0.461 |
9.1% |
| Diagnostic reagent for medical diagnosis |
0.408 |
8.0% |
| Bougies, catheters, drains and sondes, and parts and accessories thereof |
0.214 |
4.2% |
| Mechano-therapy application |
0.190 |
4.2% |
| Appliances, which are worn or carried or implanted in the body |
0.179 |
3.5% |
| Cannulae |
0.174 |
3.4% |
| Instruments and appliances, used in dental science |
0.164 |
3.2% |
| Ozone, oxygen or aerosol therapy |
0.158 |
3.1% |
| Sunglasses, corrective, protective or other |
0.143 |
2.8% |
| Syringes, with or without needles |
0.132 |
2.6% |
| Top Ten Imports by HS code |
2.223 |
41.9% |
| All other HS codes |
2.86 |
58.1% |
Canadian Technology Strength Supports Innovation
- The manufacturing of medical devices involves the application of diverse biomedical and engineering disciplines. The Canadian medical device industry benefits from the strengths of associated Canadian industries including biotechnology, advanced materials, microelectronics, telecommunications, and software and informatics.
- In addition, the industry is able to draw on world-class innovative research being conducted in Canadian universities, research institutes and hospitals, some of which is spun-off into Canadian medical device companies. 4
- Medical devices incorporate the following technologies:
- Telecommunications
- Advanced Materials
- Microelectronics
- Biotechnology
- Software and Informatics
Medical Device Manufacturing Costs Lowest in G-7
- Total annual costs to establish and operate a medical device manufacturing facility in Canada are the lowest in the G-7. Canada holds a 4.8 percent cost advantage over the United States in medical device manufacturing. 5
Table 6: Medical Device Manufacturing Cost Index for the G-7
| Country |
Index
(U.S. = 100) |
| Source: KPMG 2010 |
| Canada |
95.2 |
| France |
97.6 |
| United Kingdom |
98.4 |
| Italy |
98.6 |
| United States |
100.0 |
| Germany |
102.7 |
| Japan |
108.4 |
Low R&D Costs
- The Canadian Scientific Research and Experimental Development (SR&ED) Tax Incentive Program, administered by the Canada Revenue Agency, encourages Canadian businesses of all sizes, and in all sectors to conduct R&D in Canada. It is the largest single source of federal government support for industrial R&D. It provides claimants cash refunds and/or tax credits for their expenditures on eligible R&D work done in Canada.
- When combined with the provincial R&D tax support, the Canadian tax treatment of R&D ranks first as the most favourable among the G-7 nations. 6
Regulatory Process Emphasizes Harmonization
- All medical devices in Canada are subject to the Food and Drugs Act and its regulations. The Act permits Canadian manufacturers to export product in accordance with the receiving country's laws, irrespective of domestic approval status. This export provision has prompted some foreign-owned companies to establish export manufacturing from a Canadian base.
- Canada's regulatory process for medical devices emphasizes harmonization. Canada has a risk-based system of regulation in keeping with international trends.
Supportive Network of Industry Associations
- Companies in Canada's medical device industry are supported by a number of national and regional associations, including:
Federally-Funded Research Support Programs
- Several federally–funded research programs and councils support health-related research in Canada: the Canadian Institutes for Health Research; Networks of Centres of Excellence; National Research Council; and the Natural Sciences and Engineering Research Council.
Commercialization Initiatives
