Software development and computer services, 2023

Released: 2025-03-10

While not approaching previous highs, computer services continue to grow in 2023

The software development and computer services industries continued to experience strong growth in 2023, with total operating revenue reaching $148.0 billion. This represents an annual increase of 8.4% but is less than half of what was reported in 2022 (+18.8%).

The software development and computer services industries encompass businesses in computer systems design and related services; software publishers; and computing infrastructure providers, data processing, web hosting, and related services. They cater to a diverse and expanding customer base in a rapidly evolving, technology-driven economy both in Canada and globally.

Computer systems design and related services

Businesses in this industry reported total operating revenue of $106.1 billion in 2023, up 7.3% from 2022. The majority of this revenue came from Ontario (51.2%), followed by Quebec (24.4%), British Columbia (13.6%) and Alberta (6.6%). Key revenue sources included information technology technical consulting services (31.3%) and other custom software development services (9.0%).

Canadian clients accounted for 59.2% of the industry's revenues in 2023, while international clients (exports) made up 25.8%.

Operating expenses rose by 7.5% to $99.4 billion in 2023, with salaries, wages, commissions and benefits constituting the largest expense, at 46.3%. The industry's operating profit margin decreased to 6.3%, compared with 6.5% in 2022. E-commerce sales made up 15.5% of all sales in 2023.

Software publishers

Software publishers saw a 12.7% increase in operating revenue, reaching $23.2 billion in 2023. Application software generated the largest share of sales (43.0%), followed by system software (23.8%). E-commerce sales continued to grow, accounting for 58.6% of all sales in the year.

Over two-thirds of all sales (68.0%) in 2023 were made to international clients, while 25.7% were made to Canadian businesses.

Operating expenses of software publishers increased by 8.8% to $23.8 billion in 2023, with salaries, wages, commissions and benefits remaining the largest expense category (35.3%). The operating profit margin improved to -2.4%.

Computing infrastructure providers, data processing, web hosting, and related services

The computing infrastructure providers, data processing, web hosting, and related services industry generated $18.7 billion in operating revenue in 2023, a 9.4% increase from 2022.

Operating expenses rose by 8.7% to $18.7 billion in 2023, and the operating profit margin rose to -0.04%, compared with -0.7% in 2022. Hosting and information technology infrastructure provisioning services (36.5%) accounted for the largest share of sales revenue in 2023, followed by information and document transformation services (30.6%).

Canadian businesses were the main clients, representing 58.3% of total sales in 2023. Exports made up 27.6% of total sales, while e-commerce represented 50.3%, down from 53.6% in 2022.

A look at 2024 industry trends

The Canadian computer services sector experienced more turbulence in 2024 than in recent years. Monthly gross domestic product for software publishers and computer systems design and related services declined from January to November 2024. Employment in computer systems design and related services was also down, decreasing by 2.7% in November 2024. In contrast, computing infrastructure providers, data processing, web hosting, and related services saw increases in both categories. Detailed financial information for these industries in 2024 will be available following survey data collection in 2025.

Contact information

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