Microsoft Canada's Impact Report: Boosting Innovation & Productivity in Canada, Summaries of Innovation

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Microsoft

Canada

Economic and Social

Impact Report

May 2022

Disclaimer

Ernst & Young LLP (“EY”) was engaged by Microsoft Canada Inc. (“Microsoft”) to conduct a social and economic impact study. In preparing this document (“Report”), EY relied upon

unaudited data and information from third party sources, Microsoft, associations, academic and research institutions, and the public sector (collectively, the “Supporting Information”). EY

reserves the right to revise any analyses, observations or comments referred to in this Report if additional Supporting Information becomes available to us subsequent to the release of this

Report. EY has assumed the Supporting Information to be accurate, complete and appropriate for the purposes of the Report. EY did not audit or independently verify the accuracy or

completeness of the Supporting Information. Accordingly, EY expresses no opinion or other forms of assurance in respect of the Supporting Information and does not accept any

responsibility for errors or omissions, or any loss or damage as a result of any persons relying on this Report for any purpose other than that for which it has been prepared.

Executive Summary

Ernst & Young LLP (EY) was engaged by Microsoft

Canada Inc. (Microsoft, or Microsoft Canada) to conduct

a social and economic impact study of Microsoft’s

operations and activities in Canada.

As part of the engagement, EY:

• Assessed Microsoft Canada’s contributions to the

innovation ecosystem, including economic

contributions associated with the partner networks

and cloud products.

• Estimated total contributions to the Canadian gross

domestic product (GDP) and full-time equivalent (FTE)

employment.

• Quantified the productivity benefits gained by

Canadian businesses that use Microsoft Teams.

• Evaluated Microsoft’s broader socioeconomic

contributions, including:

Economic opportunity Technology is one of the leading economic drivers of our time. Economic growth leads to higher living standards and equality of opportunity.

• The Microsoft ecosystem contributes to economic prosperity through job creation, revenue generation, and contributions to the Canadian GDP.
• Microsoft services and products enable Canadian organizations to digitally transform and transition to more efficient ways of working, while also allowing them to access new market opportunities.
• Microsoft skilling initiatives allow Canadians from all backgrounds to acquire highly marketable digital skills required for today’s digital economy. Economic and social impacts Fundamental rights Access to affordable technology and purpose-built solutions allows organizations achieve greater impact and drive equity and inclusiveness. - Microsoft is committed to working across sectors with other businesses, governments, NGOs, and change-makers to foster partnerships and solutions that will have lasting impact in solving societies’ greatest challenges. - Microsoft provides contributions in cash, cloud services solutions, and technology services to the Canadian non-profit sector to promote inclusive digital transformation. Sustainability Climate change is a defining issue of our generation, and addressing it requires swift, collective action and technological innovation.
• To minimize the environmental impacts of its operations and maximize the positive impacts of its technologies, Microsoft has made significant contributions to sustainable projects in Canada.
• Microsoft’s global sustainability commitments include reaching carbon negative, water positive, and zero waste status by 2030. Trust Cybersecurity is a priority in Canadian organizations’ rapid digital transformation. - Microsoft is at the forefront of helping governments and businesses defend cyberattacks. - To counter disinformation in the context of the COVID-19 pandemic, Microsoft Start has created COVID-19 information hubs.
• Contributions to the

start-up ecosystem

• Investment in skilling

initiatives

• Digital transformation in

education and healthcare

• Advancing cybersecurity
• Community initiatives
• Sustainability programs

and partnerships

Microsoft is among the key players in the Canadian technology and innovation ecosystem that significantly contributes to the Canadian economy and

society through its partner network, the cloud ecosystem, and more generally, its support in providing digital solutions to all sectors. Microsoft's products

and solutions enable innovation in all sectors, including education and healthcare, and its programs, contributions, and initiatives support the broader

community.

Microsoft’s mission is “To empower every person and every organization on the planet to achieve more”.

30,

organizations in Canada

participate in Microsoft for Non-

profits programs^15

125,

educators were trained in 2021 to

use digital tools in classrooms^14

Microsoft in Canada: Impact At-a-Glance

Note: Figures are presented in Canadian dollars. Jobs are expressed as FTE employment. Note that the estimated partner revenues are attributed to all Microsoft’s software products and services; whereas the estimated cloud ecosystem revenues are attributed to the implementation of cloud solutions only. Methodology is provided in the Appendix. Sources: 1 Forrester Research, Statistics Canada, and EY Analysis; 2,3,4,5,6,7^ Microsoft; 8,9^ IDC and EY Analysis; 10,11^ IDC, Statistics Canada, and EY analysis; 12 Microsoft and WSP; 13,14,15^ Microsoft. Up to $20 billion

annual productivity benefits

gained by Canadian businesses

using Microsoft Teams^1

Partner ecosystem (^) Cloud ecosystem $19 billion

in cloud-related revenue

generated annually by Microsoft

cloud customers^9

290,000 FTE jobs

supported by the Microsoft ecosystem

in Canada^11

$37 billion in GDP

generated or sustained by the

Microsoft ecosystem annually^10

Nearly 5,

Microsoft employees

across Canada, doubling

the workforce since 2019^6

30 projects valued at $190 million

supported by Microsoft

as part of the Digital Technology

Supercluster^2

$125+ million

contributions in cash, software,

cloud and technology services to

Canadian non-profits in 2021^4

Over 1 million Canadians

received digital skills training

through the Microsoft Global Skills

Initiative since the beginning

of the COVID-19 pandemic^3

Nearly 3,

start-ups have enrolled in various

Microsoft’s programs since 2011^5

30+

post-secondary institutions across

Canada participate in the Microsoft

Canada Skills program^13

15,000+

Microsoft partners in Canada^7

$24-29 billion

in revenue generated annually^8

93% more energy-efficient and 98% lower carbon emission

Microsoft cloud compared to traditional enterprise

data centres^12

Microsoft Economic contributions

Supporting Economic Opportunity

The Microsoft partner ecosystem has been, and

continues to be, at the centre of how Microsoft

delivers technology, services and cloud-to-

edge solutions that enable business

transformation for customers across Canada.

A 2021 survey by the Bank of Canada found that cloud

computing is the most common technology adopted by

Canadian firms pursuing digital transformation.^1 Using

cloud technologies for data and applications allows firms

to promote growth in their services and solutions and

ensure security and reliability.

For Canadian businesses to capitalize on the benefits of

cloud adoption and digital transformation, they require a

cloud provider. For decades, Microsoft has been the cloud

provider of choice for Canadians, including the majority of

Fortune 500 companies.

Microsoft partners, including Canadian entrepreneurs,

start-ups, app builders, software development firms, and

technology companies, build tech intensity with innovative

solutions for Canadian businesses and digitally transform

workplaces to enable organizations to achieve more from

coast to coast.

Partner ecosystem 15,000+ Microsoft partners from coast to coast^2 $24-29 billion generated in revenue annually^3 Cloud ecosystem $19 billion in cloud-related revenue generated annually by Microsoft cloud customers^4 Notes: Figures are presented in Canadian dollars. Note that the estimated partner revenues are attributed to all Microsoft’s software products and services; whereas the estimated cloud ecosystem revenues are attributed to the implementation of cloud solutions only. Economic contribution results include a total of direct, indirect, and induced contributions. Methodology is provided in the Appendix. Sources: 7 1 Bank of Canada; 2 Microsoft; 3,4^ IDC and EY analysis; 5,6^ IDC, Statistics Canada, and EY analysis; Microsoft. Economic contributions 290,000 FTE jobs supported by the Microsoft ecosystem^5 $37 billion in GDP generated or sustained by the Microsoft ecosystem annually^6 Empowering Canada’s energy sector

EY Canada collaborated with Microsoft Canada

to provide energy sector companies with

customized solutions using diverse Azure cloud

services and Power BI

95% of Fortune 500 companies use Microsoft cloud^7

These include:

Empowering the Hybrid Workforce Across Canada

Microsoft is empowering and supporting

Canadian businesses in transitioning to the

hybrid work model.

The COVID-19 pandemic accelerated the digital

transformation and the adoption of remote work. From April

2020 to June 2021, close to 70% of Canadians in the

professional services sectors worked from home.^1

Digital communication technologies enabled remote work,

allowing Canadian businesses to not only mitigate revenue

losses, but support flexible and now hybrid work

environments for employees.

For example, Microsoft 365 and Teams help Canadian

businesses work more productively by breaking down the

barriers of multiple applications so people can find

information, collaborate, and stay in the flow of work.

Microsoft Viva further supports employee experience by

bringing together communications, knowledge, learning, and

resources. Using these applications, organizations are

enabled to ensure their employees are more productive,

empowered, and included.

Up to $20 billion Annual productivity benefits gained by Canadian businesses using Microsoft Teams²

“Employee expectations are changing, and we will need to define

productivity much more broadly — inclusive of collaboration, learning,

and wellbeing to drive career advancement for every worker, including

frontline and knowledge workers, as well as for new graduates and those

who are in the workforce today.”

Satya Nadella, Chairman and CEO of Microsoft

Notes: Productivity benefit estimate is presented in Canadian dollars. Methodology is provided in the Appendix. Sources: ¹ Statistics Canada; ² Forrester Research, Statistics Canada, and EY Analysis.

Spirit of Math provides after-school classes for students

seeking to excel in mathematics. When the COVID- 19

pandemic started, Spirit of Math quickly adopted online

teaching with Microsoft Teams, ensuring learning

opportunities for its 11,000 students.

Addressing the need to provide Canadians with accessible

mental health and wellbeing resources, LifeWorks developed

one of Canada's fastest-growing apps on Microsoft Teams,

with integration in Microsoft Viva to provide a fully realized

Time savings digital employee experience.

• Collaboration
• More efficient and effective meetings
• Reduced application switching time Productivity gains - Optimized work environment - Increased time for learning - Increased creativity Iconic Canadian retailer used Microsoft Teams

to create a reimagined curbside delivery capability.

Hospital network with almost 40,000 staff, serving 1.9 million

people in BC use Microsoft Teams as a hub for patient

communications, scheduling, data exchange, and physician

collaboration.

Skills for Jobs

Support post-pandemic recovery

The pandemic exacerbated the labour

shortages in many industries that had

already faced difficulties hiring. A recent

study conducted by Business

Development Bank of Canada in 2021

found that more than half of Canadian

businesses struggled to hire workers.

Nearly 44% of businesses identified the

skill shortages as the main cause for

hiring difficulty.^10 Digital upskilling,

therefore, becomes vital for business

recovery and for ensuring all Canadians

have the opportunity to pursue in-

demand jobs in a post-pandemic world.

In response to the widening skills gap and

the urgent need for digital skills,

Microsoft Canada is expanding the

Canada Skills Program and is investing

in skilling initiatives to build a sustained

pipeline of talent equipped with cloud,

data, and AI skills.

Through Canada's Digital Technology

Supercluster, Microsoft has partnered

with NPower Canada and Blueprint to

support Canada's economic recovery by

launching the Canadian Tech Talent

Accelerator project - a 15-week skills

training and job placement program that

will equip 2,500 Canadians for in-demand

digital careers.

Strengthen Canada’s innovation economy

Canada’s economy needs digital talent for innovation.

According to a study conducted by Information and

Communications Technology Council (ICTC), Canada requires

more than a-quarter million digitally skilled workers by 2025.

To bridge the digital skills gap among the workforce,

Microsoft has made significant investments in partnerships

and programs to:

• Help existing ICT talent to continue developing their skills
• Promote an environment of continued life-long learning

with customers and partners

• Ensure the future generations of educators and learners

have access to technology and skills training

• Support and connect learners to jobs Promote inclusivity

People need access to technology and digital skills

to pursue the in-demand roles of today and

tomorrow. Microsoft works to increase equal access

to broadband, technology, skills, and data

to deliver more opportunities for all communities to

thrive in an increasingly digital world.

Digital skills are highly in-demand 70%+

Jobs require basic digital skills

in today’s labour market¹

250,000+

Digitally skilled workers are

projected to be needed in the

Canadian economy by 2025^2

10%

Canadian businesses reported

difficulty hiring digital talent³

Sources: 10 ¹ Statistics Canada; ² ICTC; ³ Statistics Canada; 4,5,6,7,8,9^ Microsoft; Business Development Bank of Canada. Microsoft empowers the Canadian workforce 1 million+

Canadians have received digital

skills training through the

Microsoft Global Skills Initiative

since 2020⁴

125,

Educators in Canada were

trained in 2021 to use digital

tools in classrooms⁵

30+

Post-secondary institutions

across Canada participate in the

Microsoft Canada Skills

program⁶

90,

Customers and partners have

been equipped with the skills

needed to succeed in the digital

economy in 2021⁷

3,800+

Jobseekers were helped in

finding employment and

improve their livelihoods^8

30,000+

Students in the Microsoft

Canada Skills Program were

trained in 2021^9

Building up a talent pipeline equipped with digital skills while continuously upskilling the workforce is key to strengthening Canada’s economic

competitiveness. Microsoft invests in the future of Canadians by leading and expanding numerous skilling initiatives.

Enabling Healthcare Transformation

Source: Microsoft. Microsoft’s healthcare partners across Canada include: Transforming healthcare with digital technology

While the COVID-19 pandemic continues to cause challenges for many Canadians,

it has been a catalyst for an unprecedented digital transformation that drove

massive technological shifts, especially in the Canadian healthcare industry.

Healthcare organizations across Canada have looked to Microsoft’s ecosystem of

partners to meet their digital needs, including providing scalable and secure

solutions and enabling telework. Microsoft’s solutions helped make patient care

faster and more reliable and provided organizations with efficiency gains and

better patient outcomes.

Ontario Lakeridge Health, Niagara Health, Canadian Mental Health Association (CMHA), Nutrasource, University Health Network (UHN) Quebec CAE Healthcare, Jewish General Hospital British Columbia BC Cancer Manitoba Shared Health, St. Boniface Hospital Saskatchewan Saskatchewan Surgical Initiative Alberta Alberta Health Services Niagara Health used Azure to bring AI and voice enablement to create innovative solutions that enhance patient care. The virtual assistance provides reminders, helps enhance workflow, and gather data. PointClickCare is empowering care teams with LTC eConnect. Leveraging the power of Azure, the cloud-based program creates a streamlined, single source of patient information for care providers using robotic process automation and augmented CAE Healthcare is an industry-leading training company supplying healthcare professionals with educational tools that help them provide high-quality patient care with minimal risk. Using Microsoft Azure IoT technology, CAE developed CAE Maestro Evolve, digitizing its training offering and making it more accessible to train healthcare professionals quickly and remotely, simulating clinical experiences with a digital patient. Lakeridge Health adapted multiple Microsoft 365 and Microsoft Power Platform solutions to create a new electronic medical record (EMR) platform which led to an 800% increase in virtual care, limiting patient and staff exposure to the COVID-19 virus. Nutrasource , a nutraceutical and pharmaceutical contract research firm uses the power of Microsoft Azure AI and Power BI to turn real-world information into actionable insights for pharmaceutical and nutraceutical customers.

The pandemic has put immense pressure on Canada’s healthcare system to adopt new ways of delivering care. Microsoft and its partners have empowered healthcare providers to

deliver positive impact and improve patient outcomes.

University Health Network (UHN) leverages Microsoft Azure and AI to bridge cancer research and treatments. UHN harnesses the power of AI and cloud computing to analyze large panels of cancer cells to determine the genomic aberrations predictive of drug responses. intelligence. Patients benefit from improved complex care while care teams can access relevant information at their fingertips.

Committing to a Sustainable Future

Note: Figures are presented in Canadian dollars unless noted otherwise. Sources: 1 Microsoft and WSP; 2 Microsoft; 3 EQ Bank, ATCO, Desjardins, Microsoft, Ontario Power Generation, Evergreen, Canada’s Digital Technology Supercluster.

Microsoft’s global commitment to a sustainable future

Zero waste Across Microsoft’s direct business by 2030. Planetary Computer Build a global environmental network tool to monitor, model, and manage the world’s ecosystems and protect more land than Microsoft uses. Water positive Replenish more water than what Microsoft uses by 2030. Carbon negative Reduce and remove carbon emissions, and use renewable energy to reach carbon negative by 2030.

“Climate action can’t wait. Since 2015, Canada has been a

committed partner in the fight against climate change, and as

we move to a net-zero future, we will continue to do our part to

cut pollution and build a cleaner future for everyone. Together,

we will beat this crisis while creating a green economy and new

middle-class jobs for Canadians.”

Justin Trudeau,

Prime Minister of Canada

Benefits of Microsoft cloud^1 Relative to traditional data centres.

This results in up to 98% reduction in carbon emissions

Microsoft cloud is up to 93% more energy-efficient Microsoft initiatives and programs² US$1 billion Climate Innovation Fund to accelerate development of climate technologies globally Technology grants 42 technology grants to 29 Canadian organizations working on environmental challenges Emissions impact dashboard A dashboard to measure Microsoft cloud-based emissions and carbon-saving potential Microsoft cloud for Sustainability A new solution offering comprehensive, integrated, and automated sustainability management for organizations of all stages

Environmental protection Energy

Through the Digital Technology Supercluster, Microsoft supported the FreshWater Data Commons, a network of sensors to collect real-time data on water, climate and precipitation in British Columbia. In 2020, Evergreen worked with Microsoft and Gramener, and leveraged Microsoft Azure AI solutions to help increase visibility of environmental factors related to planned and existing infrastructure projects in Canadian cities to mitigate the effects of climate change. Ontario Power Generation is using Microsoft AI Azure for data strategy, analytics, and modelling needs to move towards a carbon-neutral future. Microsoft signed a 15-year renewable energy agreement with ATCO Group , where Microsoft will purchase all renewable energy generated by ATCO's Deerfoot solar facility in Calgary, Alberta, helping Microsoft deliver on its renewable energy commitments in Canada. Microsoft is collaborating with organizations across Canada to build a more sustainable future^3

Financial services

Equitable Bank is the first Schedule I Canadian Bank to quantify and disclose its entire Scope 3 greenhouse gas emissions portfolio, including financed emissions, partially enabled by Microsoft Azure. Desjardins partnered with Microsoft through its Open Innovation Cooperathon Challenge in 2021 to uncover how technology and AI can be used to support the development of sustainability- focused solutions.

Climate change is a defining issue of our generation, and addressing it requires swift, collective action and technological innovation. To minimize the environmental impacts of its

operations and maximize the positive impacts of its technologies, Microsoft has made significant contributions to sustainable projects in Canada and around the world.

Earning Trust and Advancing Cybersecurity

By using advanced cloud technology, a Zero Trust approach to cybersecurity, and a network of cybersecurity experts, Microsoft is at the forefront of helping businesses and

governments defend against cyber threats.

Investing to advance cybersecurity solutions

The world is witnessing a rapid rise in cybercrime

activities. Cyberattacks on critical infrastructure,

including healthcare, information and communications

technology (ICT), financial services, and energy sectors

have become increasingly common, disrupting

government and business activities. To address

increasingly complex cybersecurity threats and to

safeguard the interests of organizations and individuals,

Microsoft made a global commitment in 2021 to invest

US$20 billion in cybersecurity over five years to

advance its security solutions.

Defending against disinformation

Disinformation has been a steadily evolving method of

information warfare. Disinformation in the context of

COVID-19, can endanger the population’s health,

especially if the news that spreads is about false

prevention measures or treatments. A survey found

nearly all Canadians saw COVID-19 misinformation

online, and close to two in five Canadians reported

believing that the information they saw was true, then

later realized that it was not.^1

To counter disinformation, Microsoft Start has created

COVID-19 information hubs, with an experienced team

editing content related to COVID-19 from trusted news

brands and coordinating with government healthcare

agencies to share critical updates.

Note: Figures are presented in Canadian dollars unless noted otherwise. Sources: 1 Statistics Canada; 2 IDC; 3 Microsoft; 4 The International Information System Security Certification Consortium. Providing access to cybersecurity skills

Remote working, growing online activity and evolving threats

have increased the demand for cybersecurity professionals.

According to one study, Canada’s cybersecurity workforce has

grown nearly 21% from 2020 to 2021 (from 102,000 to 124,000).^4

A sustained pipeline of cybersecurity professionals is vital for

safeguarding the security of Canadians’ most valuable

information.

In response to the growing demand, Microsoft has partnered

with higher-education institutions across Canada, such as

Ryerson’s Cybersecure Catalyst Program , on cybersecurity

curriculum and skills development.

Building public-private partnerships

Working together with industry, academia, civil society, and

government, in Canada and internationally, is paramount.

Canada is part of the Microsoft Government Security Program

(GSP), an international initiative spanning 45 countries and 90

international organizations. Participation enables controlled

access to source code, exchange of threat and vulnerability

information, and access to five globally distributed Transparency

Centers.

In addition to global partnerships, Microsoft Canada has had a

15 - year relationship with the Communications Security

Establishment (CSE) and the Canadian Centre for Cyber Security

(CCCS), sharing information on emerging threats and cyber

defence techniques through the GSP. It has also recently

enrolled the Royal Canadian Mounted Police (RCMP) National

Cybercrime Coordination Unit (NC3).

Security signals processed by Microsoft globally^3 Over 24 trillion daily security signals US$ billion

Investment

over five years

billion

Endpoint threats

blocked

billion

Email threats blocked

8,500+

Microsoft cybersecurity

experts

billion

Identity threats

blocked

January – December 2021

Cybersecurity is a priority in Canadian organizations’ rapid digital transformation. An IDC study forecasts that nearly 50% of Canadian organizations will unify security capabilities for enhanced threat detection and incident response by 2023.^2