Canada: Northern lights

AV Magazine

Having emerged a year later than the US from Covid hibernation, Canada is making up for lost time with a rush of construction, upgrades and AV opportunities. 

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The new normal in Canada post-pandemic has been busier than anticipated with a wave of new construction driving AV business into 2024.

Pro AV is back “in full swing” says Caitlin Doherty, vice-president of Erikson Audio which distributes Powersoft. “The key dealers are growing and with that growth there is room for partnerships with more manufacturers.”

Canada’s 40 million population is the same size as the state of California making it a “smaller, more practical market” for Mark Bohs, Datapath’s Sales Director (Americas). “Despite the government trying to combat inflation by raising interest rates, the economy remains strong and many provinces, plus their larger cities, are still growing. Audio visual is an excellent market to be in.”

Jason Mcleish, sales director, Uniguest says Canada “is becoming a very proactive forward thinking market primed for digital technology to help address customer engagement challenges. It’s picking up pace and only likely to get better.”

Q1 and Q2 were “extremely busy” for Atlona and many of its integration partners, reports Christina Cruziero, the company’s regional sales manager. “Industry-wide, sales look strong across Canada and many businesses expect sales to be up on 2022. Everyone has their eye on interest rate fluctuation, but overall the outlook is positive.”

Julie Legault, president of Techi + Contact which partners with management platform Utelogy says expects AV growth to continue into 2024. She also sounds alarm on interest rates. “If they continue to climb there could be a market slowdown later into the year. Typically, the commercial market is not as sensitive as the consumer or prosumer markets, so the outlook remains very positive.”

That demand has created an issue. Matthew McKaig, Crestron’s director, Dealer Channel, says, “Our integration partners are still feeling the pressure from those installations that are still being completed.”

François Corbin MD, d&b audiotechnik describes the market as going from famine to feast. “It’s been relentless – tons of production work and installation projects, too many to participate in them all. That said, we’ve been hearing more and more concern about things slowing down from 2024 onward. There appears to be some uncertainty as to what the coming years will look like. Inflation has certainly had an effect.”

Meanwhile several commentators note the country has been slower to move out of the pandemic compared to the US. Ben Cook, senior market development specialist, Shure, says, “While Canadian customers tend to be more brand loyal than other regions, supply chain difficulties have led many of them to make purchase decisions based on availability. This has forged new business relationships but has also created an environment where manufacturers easing out of supply chain constraints need to work even harder to win back local customers.”

“While delivery times and stock situation have become much better for GerrAudio Distribution, its vice-president and director of sales Geoff Maurice, says they are still fighting to fill orders “to satisfy as many tours and projects by their deadlines as possible. It’s been a strenuous mental exercise to try to move gear around and keep everyone happy.”

The most growth for GerrAudio stems from the rental and live side of the business, which is also the one that shuttered the most during Covid. “We saw a lot of companies do what they should have done on a much more regular basis with respect to selling off old and outdated gear,” adds Maurice. “We’re now seeing them re-equip tenfold over what they would normally do. Covid has definitely changed this workflow for the better, but it has also diversified our customers’ offering.”

Venue upgrades
In the live events market Datapath cites a solid recovery. “Things are starting to return to pre-pandemic levels,” says Bohs. It’s a view echoed by Cook who says live events have “grown steadily” while the pro audio side “seems to be making a comeback. The number of concerts in Canada is still down at least thirty per cent. Out of the ten big festivals held in the Toronto area, only four have restarted since the pandemic.”

The Canadian market re-opened at least a year later than the US making it a busier than usual summer 2023 in production. Corbin reports a lot of new blood coming into the industry needing to be mentored and trained: “There’s a huge shortage of labour and qualified technicians to support all the work.”

Houses of worship, by contrast, never slowed down for d&b audiotechnik. “This is a growing vertical, the latest trend is object mixing and it is hard for us to keep up,” says Corbin.

Recent installs of d&b’s Soundscape system include a 1,500-seat sanctuary in Red Deer, Alberta, where the worship experience is enhanced through the object-based mixing. “It’s wrong to think that object mixing is only for musicals or performing arts centres. We’re getting requests for applications from sports venues, malls, dance clubs, and restaurants.”

Sports
Unlike the US, Canada doesn’t have major sports leagues like the NBA, MLB, or NFL across the country but it does have ice hockey. Christie’s senior sales manager, Joe Mercier reports interest in projection mapping ice surfaces from smaller hockey clubs. “They are looking to replicate what NHL teams are doing, albeit on a smaller scale. We’re also seeing interest in permanent projection mapping projects from cities and towns.”

The sale of the Ottawa Senators Hockey Club (to a local entrepreneur) brings forward the possibility of an upgrade to experiences within the 18,652-seat Canadian Tire Centre stadium.

Datapath has been involved in recent upgrades to the Rogers Centre where MLB team Toronto Blue Jays play. They added signage throughout their stadium by expanding their Triple Play Signage and IPTV systems. Bohs predicts more sports venue upgrades ahead of the 2026 Fifa World Cup which Canada shares hosting 48 matches with Mexico and the US.

Says Mcleish: “Fan experience has been a huge topic in sports and entertainment and the teams in Canada are jumping on that train too. Whether it’s digital menu boards to help up-sell deals and high value items, digital signs in retail spots, engagement apps to create personal connections or interactive TV in corporate boxes, teams are seeing the opportunity to connect, engage and create additional revenues from technology.”

Back to hybrid
As elsewhere the return to work is characterised by hybrid strategies. While a full return to the office “has not and probably will not occur, the partial return has reignited sales,” says Clint Hoffman, president, Lightware Americas.

“The biggest change in the corporate market is empty offices,” says Cook. “Canadian companies and employees are not going back like our US counterparts. Likewise, we’ve discovered the four-day work week.

“This is happening everywhere – colleges, banks, insurance companies. Now companies are hoteling their offices, renting them out to smaller companies who are desperate for space.

“Small and single-day use cubicles have seen a large boom. These spaces represent a budget-minded group of customers looking for a small and cost-effective solution. Demand has been down for the larger, more premium conferencing technology while demand for these smaller solutions has increased dramatically.”

Crestron thinks organisations will develop better strategies for the “modern hybrid workplace” — and understand what they’ll need to provide employees with to “make the commute worth it.” McKaig expects to see organisations continue to provide better technological solutions to their employees throughout 2024.

Corporate office vacancy rates in Canada in the first quarter of 2023 were at an all-time high of 17.7 per cent, according to real estate firm CBRE.

“The softness in the Canadian market is reflected by the state of the corporate office market,” says Jason Knott, D-Tools’ data solutions architect. “That high vacancy rate directly affects the ability of integrators to install corporate boardrooms with AV, digital signage, communication and collaboration, distributed audio, access control and sound masking solutions. Likewise, there is a spillover effect that reduces demand in urban hospitality, bars and restaurants that have fewer patrons.”

On the residential side, average home prices were down in most provinces in June and July as interest rate hikes by the Bank of Canada took effect. That means slower home sales.

On a positive note, overall home prices are up for the year in every Canadian province, says Knott. “That increase builds home equity, which could spur the residential remodelling market in Q2.”

The post-pandemic campus
The education and corporate verticals remain Atlona’s core focus, and it has seen strong momentum in both areas. “The higher education space is where we see the most activity recently, and the forecast points to a swift rise in campus-wide upgrades,” says Cruziero. “We’ve been strategic about stocking products throughout the global supply chain challenges, and that has helped us win a larger share of business.”

Mohawk College in Hamilton, Ontario recently added Atlona’s AT-WAVE-101 wireless presentation switchers in 75 of its learning spaces. According to Cruziero these compact devices align well with post-pandemic classroom integration trends as well as BYOD/BYOM requirements.

McKaig says many educators want “Hy Flex spaces” that afford the ability to teach in-person and remote students at once. “New education facilities are increasing with the job demand for technology and tools for career growth,” he says.

The money budgeted for AV solutions in Canada is generally a fraction of that for most US schools, he says. “A great example from my experience as an integrator – we outfitted a US college football team’s locker facility, and the budget was larger for that one project than some of the buildings I’ve seen here that will house 3000-4000 students. The concept of ‘conservative spending’ is a very big difference between us and the US.”

Another trend is the amount of money being diverted to healthcare, notes McKaig, specifically in the building and renovation of hospitals. Many large hospital projects are underway, and the amount of tech in these new facilities is staggering, he says. Additionally, UC technologies that bring doctors to rural care facilities using Microsoft Teams or Zoom are becoming the norm.

Construction boom
Many Canadian cities have major construction going on as the country’s population and economy expands. The Greater Toronto Area and Southern Ontario Region, which comprises about 36 per cent of the population, are an AV hotspot, according to Bohs. Buildings comprise high-rise office towers for banks and condominiums. “This area is growing fast and there’s strong demand for AV,” he confirms.

Says Cook: “We are adjusting to a growing population and experiencing a housing crunch. Our integrator partners are feeling this and struggling to hire enough talent to meet demand. There are many initiatives here to help boost the workforce and increase adoption of crucial trade skills.”

Visitor attraction, event venue and waterfront park Ontario Place is rebuilding and expanding, reports Cruziero. The Ontario Science Centre is relocating here creating AV opportunities to pursue. There are also three new hospitals under construction, including Niagara South Hospital and a research facility for the Centre for Addiction and Mental Health. Further west, Calgary is rebuilding the Scotiabank Saddledome, home of the NHL’s Calgary Flames team.

“There is business to be had in even the furthest-reaching provinces,” says Cruziero, but Montreal, Toronto, Vancouver and Calgary remain the busiest cities for AV business. They are tourist destinations and “major hubs for immersive sound and productions for tours, studios, Cirque and video creation,” says Corbin, noting also the strong movie production capacity of each.

While Ontario remains the dominant activity area, Maurice reports “a significant surge” from East Coast provinces like PEI and Newfoundland particularly as artistic and cultural centres: “These areas have always had a strong connection with arts and entertainment but also have province-wide support.”

McKaig pinpoints smaller regional technology and government hotbeds like Halifax, Kitchener/Waterloo, Winnipeg, Regina, and Saskatoon. The cost of living in those cities is often less than half of the ‘big three’ cities in Canada, he says. “These regions can offer business government grants, more cost-effective real estate, and, quite often, some incubator spinoffs from higher education, which can create tech-heavy jobs.”

For example, Kitchener/Waterloo (about an hour northwest of Toronto) boasts two substantial universities and a larger vocational college that create a ton of skilled jobs for the likes of Google, Blackberry, Manulife, and Toyota. It’s dubbed the ‘Technology Triangle’. “They’ve even purchased billboards in the Silicon Valley, California trying to entice people to the KW area by dubbing it ‘Silicon Valley North.’”

The business culture varies significantly from region to region, making it difficult to paint with broad strokes. Eastern Canada leans into its French cultural influences, says Legault, which has been particularly impactful on the arts, including live performance technology.

In contrast, the western and central parts of the country often take cues from the US. Trends that emerge in the US typically trickle northward, though usually with a slight time lag, he says.

“However, Canadian businesses are increasingly setting their sights on European markets, thanks in part to growing interest in international trade shows like ISE.”

A key distinction between the Canadian and US markets is trade policy. “Canada isn’t subject to the same trade tariffs, providing Canadian businesses with unique opportunities for sourcing AV technologies and forming partnerships,” says Legault. “This has the potential to shape the market in ways that diverge from its neighbour.”

Noisy neighbours
Typically, Canada follows the US market closely on a smaller scale but business culture is different. Cruziero contrasts business in Canada as “congenial, light on pressure and less formal” than the more aggressive meetings south of the border.

“Canadians often want to work with Canadian companies and with Canadian distributors, especially in rural areas,” says Corbin.

“The commercial border between the US and Canada tends to irritate people here who would like to deal with the US. Also, there’s almost no population density in Canada. Our population is spread along the border (which covers 8,890 km). To cover the whole market, from coast to coast, with only Canadians, you need quite a team or a lot of time to travel from place to place.”

“Essentially the US is equivalent to Europe, Canada is more like Australia,” says Mcleish.
Most Canadians live within an hour of the major municipalities but “each of them has very different cultures and demographics,” says Cook, “so it’s important for us to adjust our approach as needed.”

McKaig confirms Canadians “preference for dealing with other Canadians” when scouting a solution. “Often options that could be procured in the US and not in Canada might have an organisation pivot to a different solution that has a support mechanism in Canada. That’s a critical reason for the large Crestron presence here.”

Product lifecycles are typically longer in Canada. “We adopt and use technologies until we simply cannot use the product anymore,” he observes. A cycle of 7-10 years is normal in higher-ed institutions. “Canadians love to get involved in cutting-edge technologies — but by nature, we’re drawn to technologies that have already been proven.”

GerrAudio’s Maurice voices concern about the quick pace of IP adoption. He says that while 100 per cent necessary and the future of AV, the increase in IP products is moving a bit too fast for most customers. “We have an aging demographic that knows less and less about these emerging technologies and fewer key people who know how to deal with them. I expect this to come to a head at some point. We’ve already seen a few projects stall because the technology wasn’t ready for prime time.”

Howard Lerner at Peerless-AV has been working in the region for 20 years and says it seems like business is better than ever with sales activity across verticals including hospitality, healthcare, education, corporate and finance.

“The AV industry in Canada is very active. We’re seeing a lot of increased activity in areas such as dvLED as well as for core products such as standard mounts and digital signage kiosks. Canada is bustling with opportunities and growth and there is an overall openness to listen and learn, communicate and build mutually beneficial relationships.”

A final positive appreciation from Mcleish; “It’s a great market to try new things, to bring solutions to market and to build relationships. Canada is big enough to matter from a revenue perspective, but small enough to build personal connections and community within the AV sphere.”