Technology Perspectives Outlook 2024
French version coming soon
In this technology industry outlook report, McCarthy Tétrault’s multidisciplinary National Technology Industry Group looks at the sector’s most noteworthy developments over the past year and their implications for the year ahead. Designed to help technology leaders and investors stay competitive, Technology Perspectives Outlook 2024 delves into the trends and issues affecting businesses’ day-to-day operations and provides a multidisciplinary overview of considerations that can have an impact on companies moving forward:
- Part I – Trends affecting Canadian technology companies in their day-to-day operations
- Cybersecurity update and outlook: provides an overview of the main cybersecurity threats to companies, as well as the emerging importance of cloud migration and rising costs associated with incidents
- Developments in Canadian privacy law: reviews new and reformed federal and provincial legislation, including recent court decisions clarifying the state of the law
- Business immigration and global mobility: covers the Canadian government’s plan to address skills shortages through increased migration, including updates on temporary foreign workers, PR selection processes, and the Start Up Visa Program
- Part II – Trends affecting technology companies and investors exploring financing or exit options
- Venture market update: looks at the 2023 venture market correction, bridge rounds and layoffs to extend runways, down rounds, and 2024 trends
- Technology lending: summarizes market conditions and trends heading into 2024
- Minority investments: explores the rise in minority investments in high-growth companies by investors responding to the broader macroeconomic environment and rising interest rates
- Anti-trust and foreign investment considerations for technology companies pursuing M&A: explores Canadian technology companies’ increasing exposure to global anti-trust action and updates to the Investment Canada Act
- Technology M&A targets with large and complex cap tables: considers how parties and companies should structure their M&A deals when dealing with complex capitalization tables in deals, including drag along considerations and plans of arrangement as structuring alternatives
- M&A diligence considerations for AI businesses: focuses on the risks specific to AI businesses that go beyond traditional legal due diligence issues with a close review of intellectual property concerns
- Heightened cybersecurity considerations in the context of M&A deals: looks at the specific concerns of investors when considering M&A, including the need for a multidisciplinary approach to cybersecurity diligence.
Read an excerpt from the publication below:
PART I: DAY-TO-DAY CONSIDERATIONS FOR TECH COMPANIES
CYBERSECURITY UPDATE AND OUTLOOK
In the world of cybersecurity, the two main threats to companies remain (i) business email compromise, and (ii) ransom-based attacks. Authorities expect ransomware to remain the most disruptive and persistent threat through 2024. Data extortion, an attack where data is stolen and ransomed back to the owner, will also persist, often as part of a ransomware attack. While less high-profile, business email compromise remains a significant source of economic loss and disruption for businesses.
Cloud migration is also becoming increasingly relevant. While mitigating ransomware risks, cloud migration creates more exposure for other attacks, such as data extortion. According to CrowdStrike, cloud exploitation cases grew by 95% and the number of cloud-conscious threat actors tripled. Given this trajectory, threat actors are expected to continue adapting their operations to be compatible with cloud environments. Further, cyber threat actors are increasingly attacking organizations indirectly through software tools and services by exploiting supply chain compromises. This poses a significant threat where the vendor has access to the clients’ networks.
Changes to Canadian privacy legislation — including mandatory breach reporting and large fines in Québec, as well as the potential for fines federally — make cybersecurity incidents more expensive to deal with, resulting in increased financial risk to businesses. Cybersecurity considerations are also relevant in the context of M&A transactions.
About McCarthy Tétrault’s Technology Group
McCarthy Tétrault’s National Technology Industry Group is the largest and deepest of any Canadian law firm. Operating at the intersection of the legal, business and technology sectors, our internationally recognized team of skilled advisors helps clients establish and maintain their competitive advantage. Our clients turn to us for our cross-functional legal expertise. We are technology industry experts first, with best-in-class transactional experience, which enables us to provide both day-to-day support on technology-related issues and industry-specific M&A counsel. Whether you are looking to grow via acquisition or to position your company to sell, our team will work with you to offer scaled, cost-efficient services and practical solutions that complement your goals. Amongst Canadian law firms, we’ve advised on the widest range of leading-edge technology transactions across industry sectors: software, hardware, e-commerce, fintech, aeronautics, biotechnology, life sciences, IT services, data management and security. Find out how our team can help you.
About McCarthy Tétrault
McCarthy Tétrault LLP provides a broad range of legal services, providing strategic and industry-focused advice and solutions for Canadian and international interests. The Firm has substantial presence in Canada’s major commercial centres as well as in New York and London.
Built on an integrated approach to the practice of law and delivery of innovative client services, the Firm brings its legal talent, industry insight and practice experience to help clients achieve the results that are important to them.
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For further information on McCarthy Tétrault or any of the above, please contact
 Canada’s National Cyber Threat Assessment 2023-2024 https://www.cyber.gc.ca/en/guidance/national-cyber-threat-assessment-2023-2024.
 2023 GLOBAL THREAT REPORT: https://www.crowdstrike.com/wp-content/uploads/2023/02/2023-Global-Threat-Report-Executive-Summary.pdf
 National Cyber Threat Assessment 2023-2024: https://www.cyber.gc.ca/en/guidance/national-cyber-threat-assessment-2023-2024