WWW.IBISWORLD.

CA Security Alarm Services in CanadaJuly 2018   1

Ring the alarm: Demand for industry services

will likely grow in line with a healthy economy
This report was provided to
IBISWorld Staff Member (2130086072)
by IBISWorld on 29 January 2019 in accordance with their licence agreement with IBISWorld

IBISWorld Industry Report 56162CA

Security Alarm Services
in Canada
July 2018 Mario Ismailanji

2 About this Industry 16 International Trade 28 Revenue Volatility

2 Industry Definition
2 Main Activities
2 Similar Industries
2 Additional Resources
3 Industry at a Glance
4 Industry Performance
4 Executive Summary
4 Key External Drivers
6 Current Performance
9 Industry Outlook
11 Industry Life Cycle
13 Products & Markets
13 Supply Chain
13 Products & Services
14 Demand Determinants
15 Major Markets
17 Business Locations 29 Regulation & Policy
29 Industry Assistance
19 Competitive Landscape
19 Market Share Concentration 30 Key Statistics
19 Key Success Factors 30 Industry Data
19 Cost Structure Benchmarks 30 Annual Change
21 Basis of Competition 30 Key Ratios
22 Barriers to Entry
22 Industry Globalization 31 Jargon & Glossary
23 Major Companies
23 ADT LLC
24 AlarmForce Industries Inc.
25 Avante Logixx Inc.
25 Johnson Controls International PLC
27 Operating Conditions
27 Capital Intensity
28 Technology & Systems

www.ibisworld.ca | 1-800-330-3772 | info @ibisworld.ca

WWW.IBISWORLD.CA Security Alarm Services in CanadaJuly 2018   2

About this Industry

Industry Definition This industry sells security installation, repair and monitoring
systems, such as burglar and fire services for electronic security
alarms and locking devices, and offers alarm systems.

Main Activities The primary activities of this industry are

Selling, installing, repairing and monitoring alarm systems
Monitoring of burglar alarms
Selling, installing, repairing of burglar alarms
Monitoring of fire alarms
Selling, installing, repairing of fire alarms
Providing locksmith services

The major products and services in this industry are

Nonresidential security alarm system services with monitoring
Residential security alarm system services with monitoring
Security system and lock installation without monitoring
Other

Similar Industries 33431CA Audio & Video Equipment Manufacturing in Canada

Establishments in this industry manufacture electronic audio and video equipment for home entertainment
systems, vehicles and public areas.

54161CA Management Consulting in Canada

Establishments in this industry advise businesses, nonprofit organizations and public sector agencies in
several areas: organizational design, marketing, financial advisory and logistics.

54161bCA HR Consulting in Canada

Establishments in this industry provide advice and assistance to businesses and other organizations for
structuring human resource and personnel policies, employee benefits and compensation systems.

56161CA Security Services in Canada

Establishments in this industry provide investigation and detective services; guard and patrol services; and
protected transport of valuables, including money, receipts and other items.

Additional Resources For additional information on this industry

www.fireengineering.com
Fire Engineering
www.sdmmag.com
Security Distributing and Marketing Magazine
www.securitysystemsnews.com
Security Systems News

Provided to: IBISWorld Staff Member (2130086072) | 29 January 2019

WWW.IBISWORLD.CA Security Alarm Services in Canada July 2018   3

Industry at a Glance
Security Alarm Services in 2018

Key Statistics Revenue Annual Growth 13–18 Annual Growth 18–23

Snapshot
$2.3bn 2.3% 2.6%
Profit Wages Businesses

$191.9m $776.3m 3,640

Revenue vs. employment growth Per capita disposable income
Market Share
ADT LLC  10 4
14.1%
5 3

0 2
% change

% change
-5 1

-10 0

-15 -1
Year 10 12 14 16 18 20 22 24 Year 11 13 15 17 19 21 23
Revenue Employment
SOURCE: IBISWORLD
p. 23
Products and services segmentation (2018)

Key External Drivers 4.1%

Other
Per capita disposable
income 23.2%
Security system and lock
Value of residential installation without monitoring
construction
Value of nonresidential
construction
44.5%
Residential security alarm
system services
Number of businesses with monitoring
Crime rate

28.2%
Nonresidential security alarm
p. 4 system services with monitoring
SOURCE: IBISWORLD

Industry Structure Life Cycle Stage Mature Regulation Level Light

Revenue Volatility Medium Technology Change Medium
Capital Intensity Low Barriers to Entry Low
Industry Assistance Low Industry Globalization Low
Concentration Level Low Competition Level Medium

FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 30

Provided to: IBISWorld Staff Member (2130086072) | 29 January 2019

WWW.IBISWORLD.CA
Industry Performance
Executive Summary   |   Key External Drivers   |   Current Performance
Industry Outlook   |   Life Cycle Stage
Executive The Security Alarm Services industry in
Summary Canada comprises establishments that
sell security systems, such as
surveillance equipment, fire alarms and
locking devices, and offers installation,
repair or monitoring services of
electronic security alarm systems. Over
the five years to 2018, industry revenue
is expected to increase slowly at an
annualized rate of 2.6% to $2.3 billion,
with anticipated growth of 1.8% in 2018
specifically. High residential
construction, low unemployment and
rising per capita income have boosted
industry growth. This growth has
Newbusiness formation and rising corporate
profit margins steadied demand from business
and commercial clients
improved demand for new security
system installations and made security-
monitoring services more affordable for
consumers. In addition, new business
formation and rising corporate profit
margins steadied demand from business
and commercial clients, as companies
continued to spend on security and
safety systems designed to protect their
expanding assets from crime.
Moreover, over the past five years,
industry operators benefited from
emerging technologies, which enabled
homeowners to monitor security, set
their thermostats and even control home
Key External Drivers Per capita disposable income
Changes in the economic growth rate
influence demand and investment in
security systems over the medium term.
When disposable incomes increase,
consumers are more likely to invest in
discretionary services, such as security
systems. Per capita disposable income is
expected to increase in 2018,
Provided to: IBISWorld Staff Member (2130086072) | 29 January 2019
Security Alarm Services in CanadaJuly 2018   4
appliances from anywhere via their
computers or mobile devices. These
technological solutions have been a
positive driver for industry growth, as
industry operators continue to bundle
value-added home automation features
with standard security monitoring
services. However, innovation also led to
external industry competition, as cable
and telecom companies have made
inroads into digital home service and
security services. As a result, competition
from outside industries, such as cable
service providers, is anticipated to
augment price pressures and ultimately
lead to marginal industry profit growth
over the next five years.
Nevertheless, demand for industry
services will likely grow in line with a
healthy economy, as small-business
growth and a projected rise in disposable
incomes naturally lead to spending on
security alarm services. IBISWorld
forecasts industry revenue to increase at
an annualized rate of 2.3% over the five
years to 2023, reaching nearly $2.6
billion. Shifting demographics will
further benefit the industry. By offering
around-the-clock monitoring and
emergency communication features,
security alarm service companies have
been quick to respond to a progressively
aging Canadian population. These
safety-monitoring services that enable
the elderly to live independently within
their homes will boost industry revenue
growth over the next five years.
representing a potential opportunity for
the industry.
Value of residential construction
The value of residential construction
includes total investments in new single-
unit and multi-unit construction, as well
as renovation work. Since security alarm
services are predominantly used by
WWW.IBISWORLD.CA Security Alarm Services in CanadaJuly 2018   5

Industry Performance

Key External Drivers residential clients, a rise in residential Number of businesses

continued construction activity leads to an increase
in demand for security alarm services, as
fire and safety alarms are normally
installed in new and renovated buildings.
The value of residential construction is
expected to increase slightly in 2018.
Value of nonresidential construction
The industry is sensitive to changes in the
level of investment in nonresidential
construction, such as hotels, offices,
factories, retail and other buildings. When
investment in commercial construction
increases, demand for security system
installations also increases. The value of
nonresidential construction is expected to
increase in 2018.
Business and commercial clients are
the second-largest market for
security alarm systems. To this end, as
the number of businesses increases,
the more likely it is that businesses
will invest in security systems. The
number of businesses is expected to
increase in 2018.
Crime rate
When the rate of crime is high, demand
for security systems increases.
Therefore, concerns with regard to the
prevalence of crime favourably affect
industry demand. The crime rate is
expected to decrease in 2018, posing a
potential threat to the industry.

Per capita disposable income Value of residential construction

4 10

3 8

6
2
% change

% change

4
1
2
0 0

-1 -2
Year 11 13 15 17 19 21 23 Year 11 13 15 17 19 21 23

SOURCE: IBISWORLD

Provided to: IBISWorld Staff Member (2130086072) | 29 January 2019

WWW.IBISWORLD.CA
Industry Performance
Current The Security Alarm Services industry in
Canada offers the installation,
Performance maintenance and monitoring of alarm,
fire and surveillance equipment.
Businesses and households install alarm
systems for protection, security and to
lower their annual insurance premium
costs. Over the five years to 2018,
industry revenue is expected to increase
at an annualized rate of 2.6% to $2.3
billion, with estimated growth of 1.8% in
2018 specifically. During this period,
demand for residential and commercial
security systems has proven to be
sensitive to changes in overall economic
activity. For example, rising
employment and disposable incomes
lowered alarm service cancellation rates
and improved industry revenue, as more
residential customers were able to pay
for security services. In addition, new
business formation and an increase in
residential construction helped increase
Demand gradually The industry slowly recovered after
expands experiencing modest declines during the
global economic downturn. Although the
Canadian economy modestly improved
over the five years to 2018, many small-
and medium-sized companies have held
back their spending on services not
related to the day-to-day operations of
their business. In addition, stronger
industry revenue growth was constrained
by slow increases in per capita disposable
income, which deterred consumers from
installing alarm systems in their homes.
Furthermore, according to the
Incident-based Uniform Crime Reporting
Survey, Statistics Canada and IBISWorld
estimates, the crime rate is projected to
decline at an annualized rate of 1.3% over
the five years to 2017. In fact, according
to Statistics Canada, Canada’s crime rate
hit a 45-year low in 2014, with just over
1.8 million criminal offences reported
nationwide. While these figures did
Provided to: IBISWorld Staff Member (2130086072) | 29 January 2019
Security Alarm Services in CanadaJuly 2018   6
Industry revenue
9
6
3
% change
0
-3
-6
-9
Year 10 12 14 16 18 20 22 24
SOURCE: IBISWORLD
the industry’s pool of potential clients,
which boosted demand for new security
system installations. Lastly, slowly rising
corporate profit levels enabled
businesses to increase their spending on
upgrades for existing security and fire
alarm systems.
increase in 2015 and 2016, they are
trending down over the medium- to
long-term. Crime in Canada has trended
downward since peaking more than two
decades ago. Such a decline in the
national crime rate may assuage
homeowners’ security concerns, leading
to depressed demand for this industry’s
services. However, increasing public
concerns over security and safety,
propelled by terror-related attacks in
North America and overseas, actually
increased private security spending and
heightened demand for the Security
Alarm Services industry in Canada over
the past five years.
In addition, many industry
operators found other outlets for
revenue growth, adding health,
comfort and safety features to their
services, including temperature
control and monitoring for fire and
carbon monoxide, in addition to their
WWW.IBISWORLD.CA
Industry Performance
Demand gradually traditional security services. Moreover,
expands continued other determinants, such as a rise in
residential and commercial
Rising construction The majority of industry demand comes
from the residential market, as industry
operators commonly install and provide
monitoring for security and fire alarm
systems for single and multifamily
homes. Over the five years to 2018,
residential construction in Canada
expanded, as a growing, aging,
urbanizing and progressively wealthy
population spurred demand for new
residential real estate, especially in major
cities such as Toronto and Montreal.
Consequently, the value of residential
construction, which includes total
spending on new residential dwellings
and renovation work on existing
buildings, is expected to increase an
annualized 2.5% during this period. As
alarm systems are commonly installed in
new or newly renovated homes,
apartments and condominiums, this rise
in construction led to an increase in
industry demand.
Another major factor affecting demand
for alarm and security services is
nonresidential construction activity, as
businesses and commercial clients are
expected to account for nearly 40.0% of
industry revenue. This market includes
clients such as retail stores, offices and
manufacturing facilities, that use
industry services to prevent theft and
unwanted intrusions. Moreover,
businesses use fire alarms to alert
employees of potential hazards. In 2014,
rising nonresidential construction
benefited industry operators, as retailers
Provided to: IBISWorld Staff Member (2130086072) | 29 January 2019
Security Alarm Services in CanadaJuly 2018   7
construction activity, furthered
demand for security alarm services
over the past five years.
Thecommercial market
will continue to contribute
to industry revenue growth
and commercial clients increasingly
installed integrated electronic fire and
security systems in these new buildings.
However, nonresidential construction
declined for much of the next three years,
as a rapid drop in commodity prices
facilitated a decline in mining, utility,
manufacturing and commercial
construction, especially in the resource-
rich province of Alberta.
Nevertheless, the commercial market
will continue to contribute to industry
revenue growth in 2018, as the worst is
thought to be over regarding the
commodity price-driven struggles.
Furthermore, businesses commonly
purchase value-added services such as
the ability to access their security system
remotely. The installation of these
advanced security systems is costly for
businesses in the short term, but the
systems offer companies the potential to
save money in the long run, cutting down
on labour costs that are typically incurred
when employing numerous security
guards. Moreover, there has been an
increase in security-service outsourcing
among businesses and governments,
especially for remotely located
monitoring services, a trend that has
benefited the industry.
WWW.IBISWORLD.CA
Industry Performance
Profit and Profit in the industry has been stable
consolidation during the five-year period, with the
lowest profit margins estimated to have
been 8.5% in 2013 and 2016, while the
highest was 9.1% in 2015. Much of this
steadiness is due to the stable nature of
demand for industry services, as
operators have been able to maintain
profit margins by controlling costs
associated with employment and wages.
For instance, despite the fact that total
industry wage costs are expected to
increase at an annualized rate of 2.9%
over the five years to 2018 to $776.3
million, this growth is in line with overall
industry expansion.
Rising downstream demand for
security alarm and monitoring services
and stable profit margins has also
spurred market entry. During the period,
the number of security alarm services
companies is estimated to have increased
at an annualized rate of 2.4% to 3,640.
However, the Security Alarm Services
industry also experienced a continuation
in cross-border mergers and acquisitions,
as major players in the United States
Provided to: IBISWorld Staff Member (2130086072) | 29 January 2019
Security Alarm Services in CanadaJuly 2018   8
Rising
downstream
demand for security alarm
and monitoring services
spurred market entry
expanded into Canada. This trend started
in 2008, as industry major player ADT
Inc. (ADT), then part of Tyco
International, acquired FirstService
Security, a provider of security and
closed-circuit TV system installation,
servicing and monitoring. ADT’s April
2014 purchase of Reliance Protectron
Inc. for an estimated $560.0 million was
the industry’s largest acquisition, and
the deal vastly expanded ADT’s
Canadian footprint, adding 400,000
customers and 900 employees. ADT itself
was acquired by private equity firm
Apollo Global Management for just
under $7.0 billion in February 2016.
Apollo is also the owner of Protection
One, a major North American security
alarm services company.
WWW.IBISWORLD.CA
Industry Performance
Industry Over the five years to 2023, the Security
Alarm Services industry in Canada will
Outlook experience a gradually improving
operating environment as the economy
continues to expand. Record high
projected household ownership rates,
supported by long-term population
trends, will increase residential
construction and spur demand for new
security alarm installations.
Furthermore, as unemployment
remains low and disposable incomes
continue to rise, consumers will be
more likely to invest in home
improvement, increasing the
penetration of monitored security
systems in existing homes and boosting
industry performance.
Demographics and Similar to the past five years, an anticipated
other fundamentals rise in new residential construction and
spending on home improvement will boost
industry demand over the next five years.
Household ownership rates in Canada
remain high and relatively stable. About
70.0% of Canadians own real estate.
Additionally, falling unemployment will
cause household disposable income levels to
rise, freeing up cash and permitting
consumers to spend more money on
residential security monitoring services. For
example, over the five years to 2023, per
capita disposable income is expected to rise
an annualized 2.7%. This, in turn, will help
drive demand for residential security and
monitoring services, as more consumers will
be able to afford industry services.
Furthermore, interest rates that remain
low historically will continue to encourage
small business growth, enabling
entrepreneurs to more easily finance their
burgeoning businesses. Increased credit and
lending will also cause an upturn in
nonresidential construction, boosting the
potential pool of clients in need of new
security and fire systems. Over the five years
to 2023, the value of private nonresidential
Provided to: IBISWorld Staff Member (2130086072) | 29 January 2019
Security Alarm Services in CanadaJuly 2018   9
Furthermore, an anticipated rise in
corporate profit over the next five years
will yield higher business spending on
security and alarm services, while
improved nonresidential construction
will support demand for new fire and
security alarm installations. Last, the
industry will continue to benefit from
emerging technologies, including
interactive features, that enable
customers to remotely monitor and
manage their homes and businesses from
a computer or mobile device. Combined,
these factors are expected to contribute
to an annualized 2.3% increase in
industry revenue over the five years to
2023, with revenue reaching nearly $2.6
billion in 2023.
Beyond economic
factors, shifting Canadian
demographics will benefit
the industry
construction is projected to increase at an
annualized rate of 2.6%. Downstream
commercial demand for security alarm
services will also be bolstered by new
technologies tailored for small and large
businesses, such as biometrics,
fingerprinting and facial recognition.
Beyond economic factors, shifting
Canadian demographics will benefit the
industry. Over the five years to 2023, the
number of adults aged 65 and older is
expected to increase at an annualized rate of
3.5%. Industry operators have been quick to
respond to the needs of an expanding senior
population by offering round-the-clock
security monitoring and emergency
communication features, which enable the
elderly to live independently while
remaining in close connection to emergency
service providers.
WWW.IBISWORLD.CA
Industry Performance
Trends in the age of Furthermore, technological solutions will
technology continue to drive industry growth, as
digital sensors, broadband technology
and mobile access will grant customers
access to energy management,
temperature, lighting control and other
safety controls, including carbon
monoxide monitoring and flood sensing
via their computers or mobile devices.
At the same time, increasing
technology has also led to the emergence
of outside competition, as cable and
telecom companies have made inroads
into digital home service and security
systems. For example, Rogers
Communications Inc. unveiled that its
home security and automation services,
which were originally marketed solely for
the Ontario region, now extend to
provinces including Newfoundland and
New Brunswick. These security packages
are comparable in price to those of
traditional industry operators, as
customers are charged between $30.00
and $50.00 per month plus installation
fees. Therefore, external competition is
expected to pose a significant threat to
current industry operators, as large
telecom and cable companies have
competitive advantages, including
substantial capital reserves, strong
customer bases and established
marketing resources. To protect against
this new competitive threat, major
industry players, such as ADT Inc., will
continue to forge new partnerships,
Provided to: IBISWorld Staff Member (2130086072) | 29 January 2019
Security Alarm Services in CanadaJuly 2018   10
Increasingtechnology has
led to the emergence of
outside competition
adding home security services as
auxiliary features to existing products
and services over the next five years.
Nevertheless, developing technology,
improving industry revenue and
relatively low barriers to entry in this
industry should lead to an uptick in the
total number of security alarm services
companies, which is forecast to grow at
an annualized rate of 1.5% over the five
years to 2023 to 3,918 companies. This
increase, in addition to higher
competition from outside industries,
such as cable service providers, is
anticipated to augment price
competition in the industry, which will
ultimately lead to marginal industry
profit growth. As a result, IBISWorld
projects that profit for the average
industry operator will remain stable.
This is despite the expected increase in
wages, which are projected to increase
an annualized 1.9% over the five years to
2023, to $852.8 million. This will likely
be driven by the need for skilled workers
to satisfy the increase in projected
demand for commercial and residential
security installation, maintenance and
repair services.
WWW.IBISWORLD.CA Security Alarm Services in CanadaJuly 2018   11

Industry Performance
Life Cycle Stage Industry services have wholehearted
market acceptance
IVA growth generally tracks GDP growth
The industry is undergoing
heightened consolidation

Provided to: IBISWorld Staff Member (2130086072) | 29 January 2019

WWW.IBISWORLD.CA
Industry Performance
Industry Life Cycle The Security Alarm Services industry in
Canada is in the mature phase of its life
cycle. There is wholehearted market
Thisindustry acceptance for security systems given its
is M
 ature influence on safety and the financial
incentive of preventing theft and
lowering insurance costs. However, new
services, such as technologies that enable
customers to monitor their homes,
control appliances and set room
temperatures from a computer or mobile
device, have bolstered industry demand
and offer the potential for future revenue
growth over the next five years.
Nevertheless, industry growth has
largely been in line with the overall
economy. Over the 10 years to 2023,
IBISWorld forecasts that industry
value added, an industry’s contribution
to the overall economy, will grow at an
annualized rate of 2.5%. During the
same period, Canadian GDP is
Provided to: IBISWorld Staff Member (2130086072) | 29 January 2019
Security Alarm Services in CanadaJuly 2018   12
expected to grow at an annualized rate
of 1.9%.
Over the past five years, the industry
has experienced a period of merger and
acquisition activity as the recession
caused demand to decline. The largest
players have reached for increased
market share, while smaller players have
left the industry due to a tough operating
environment. For example, in April 2014,
industry major player ADT Inc. (ADT)
agreed to acquire Reliance Protectron
Inc. (Reliance), a leading provider of
monitored security services in Canada,
for $560.0 million. The acquisition of
Reliance significantly strengthened the
US-based ADT’s Canadian operations,
bringing in 400,000 residential and
commercial customers. ADT itself was
then acquired by Apollo Global
Management in 2016, which already
owned Protection One Inc.
WWW.IBISWORLD.CA Security Alarm Services in CanadaJuly 2018   13

Products & Markets

Supply Chain  |   Products & Services  |   Demand Determinants
Major Markets  |   International Trade  |   Business Locations

Supply Chain KEY BUYING INDUSTRIES

44-45CA Retail Trade In Canada
Shopping centres and malls demand antishoplifting systems.
61CA Educational Services In Canada
Schools and other educational institutions demand industry services for fire and burglary
prevention.
62CA Healthcare and Social Assistance In Canada
Hospitals and care facilities demand industry services for fire protection of residents.
92CA Public Administration in Canada
Government organizations involved with counterterrorism and other sensitive security matters
demand industry services.
9901CA Consumers in Canada
Households demand monitored security systems.

KEY SELLING INDUSTRIES

23821CA Electricians in Canada
This industry provides installation services for security and fire systems.
33592CA Wire & Cable Manufacturing in Canada
This industry provides materials to create electric circuits for alarm systems.
56161CA Security Services in Canada
This industry provides some support services associated with security systems, particularly
monitoring services and CCTV systems.

Products & Services Products and services segmentation (2018)

4.1%
Other
23.2%
Security system and lock
installation without monitoring
44.5%
Residential security
alarm system services
with monitoring

28.2%
Nonresidential security alarm
system services with monitoring

Total $2.3bn SOURCE: IBISWORLD

Security and alarm system
services with monitoring
Combined, this segment accounts for an
estimated 72.7% of industry revenue in
2018. Security alarms are primarily
designed to detect unwanted entry and
include video surveillance systems and
electronic access control. This segment also
includes remote monitoring services,
provided by security alarm services
companies, which account for the majority
of industry revenue. Monitoring services
may include closed-circuit television
surveillance (CCTV), as well as sophisticated

Provided to: IBISWorld Staff Member (2130086072) | 29 January 2019

WWW.IBISWORLD.CA
Products & Markets
Products & Services access control, biometrics and other systems
continued for high-security installations.
Residential security and alarm system
services, which include monitoring are
expected to account for 44.5% of industry
revenue, while these same services for
nonresidential markets are expected to
account for 28.2% of revenue. The
residential market’s greater share of
segment revenue is due to the large client
base of single and multifamily homes.
However, the nonresidential or commercial
market requires a broader scope of industry-
related services, including fire detection,
alarm and suppression systems, such as
carbon monoxide detection and automatic
sprinkler systems. These services can also be
integrated in a total building management
system, which incorporates climate control,
building and energy management, fire safety
and security lighting.
Revenue generated from this product
segment slightly increased as a percentage
of industry revenue over the past five years,
as product innovations, such as remote
access to climate, security and other
features via internet-connected or mobile
devices enabled industry enterprises to
charge more, while the declining crime rate
during the period has somewhat decreased
overall demand.
Security system and lock
installation without monitoring
This segment includes the installation,
repair and maintenance of integrated
Demand Demand for security services is affected by
Determinants consumer disposable income, the
unemployment rate, the crime rate and
the cost of homeowners’ insurance.
Changes in the economy affect demand for
security services, particularly from
households. During recessions, disposable
income growth slows and unemployment
rises. Consequently, an economic
downturn may lower an industry player’s
Provided to: IBISWorld Staff Member (2130086072) | 29 January 2019
Security Alarm Services in CanadaJuly 2018   14
fire and security systems as well as
standard lock installation services. In
general, lock-safeguarding services
include nonelectronic security
measures, such as the installation of
locks, safes, vaults, key duplication and
security locks on gates, doors and
windows. Locksmiths that generally
operate from storefronts and supply the
devices directly to end users and
provide installation services are
included in this segment. This segment
accounts for an estimated 23.2% of
total industry revenue in 2018. Over the
past five years, revenue for security
system and lock installation without
monitoring slightly declined, as rising
corporate profit and Canadian
disposable income levels permitted
businesses and homeowners to invest
in more expensive security services
with monitoring.
Other
Other services represent an estimated
4.1% of industry revenue. These
services include consulting, which
involves assisting the consumer or
business in choosing the right security
system to install. Also included in this
segment is revenue from the resale of
locks and security systems, as industry
operators will buy pre-made
mechanical and electronic locks from
manufacturers, then they resell them to
consumers or businesses.
new subscription volume as well as cause
many individuals to cancel their burglary
alarm systems to lower their monthly
expenditures. Comparatively, during
economic growth, demand for industry
services from residential and
nonresidential building increases in line
with growth in construction, which boosts
industry revenue as more buildings
require security services.
WWW.IBISWORLD.CA
Products & Markets
Demand The government has passed
Determinants increasingly stringent fire regulations as
part of building codes, which has also
continued
increased demand and reinforced
insurance policies that include fire and
security alarm conditions. Furthermore,
demand for this industry’s services has
increased as clients look to enhance
security in a more cost-effective manner.
Clients have moved away from labour-
intensive security means, including
security guards and patrols, to control
costs. Instead, clients have increased
their use of new remote monitoring
technology. Technological
improvements include and biometric
measures. Also, the cost of homeowners
insurance can affect demand for industry
services. For example, implementing
security services can lower an individual’s
homeowners insurance, which is
particularly prevalent when homeowners’
insurance rates are high.
The public’s perception of a rising
crime rate and concerns over safety,
which has been intensified by a series of
violent events and terrorist-related
Major Markets The Security Alarm Services industry
in Canada serves business and
commercial clients, households and
government clients.
Residential clients
The residential sector is expected to
account for 49.7% of industry revenue in
2018. This segment represents single
family and multifamily housing. Demand
from the residential market has
increased, particularly for monitored
security systems. This segment has a
relatively high customer turnover rate
because operators providing residential
services are highly price competitive.
Consumers typically sign a contract for a
subscription or installation rate. They
then change service providers when a
Provided to: IBISWorld Staff Member (2130086072) | 29 January 2019
Security Alarm Services in CanadaJuly 2018   15
attacks in North America and abroad can
stimulate demand for security systems.
For example, after the attacks on
September 11, 2001, government
spending on closed-circuit television
(CCTV) systems to monitor activities in
public places increased. The rising use of
CCTV-monitored security systems in
central cities, suburban shopping malls,
retail areas and other public areas, such
as airports, entertainment and liquor-
licenced premises, is continuing to be a
growth area for this industry. At the same
time, according to Statistics Canada,
Canada’s crime rate hit a 45-year low in
2014, with just over 1.8 million criminal
offences reported nationwide. In fact,
with the exception of slight rise in
reported crimes in 2015, crime in Canada
has trended downward for decades.
However, the public’s heightened
concern over safety has propelled public
and private spending on security
technology and services and the public’s
perception of crime has ultimately driven
demand for security services over the
past five years.
competitor offers a better deal. Over the
next five years, this market segment is
anticipated to increase, as a progressively
wealthy and expanding Canadian
population will lead to an increase in
residential construction, increasing
demand for home security and
monitoring systems.
Business and commercial clients
Accounting for an expected 39.2% of total
industry revenue in 2018, commercial
clients are the industry’s second-largest
market. The segment includes a variety of
clients, including retail stores, that use
CCTV systems and radio tags to prevent
theft. Business clients also include
petrochemical companies, which require
specific fire alarms and extinguishers,
WWW.IBISWORLD.CA
Products & Markets
Major Markets Major market segmentation (2018)
continued
11.1%
Government clients
39.2%
Business and commercial clients
Total $2.3bn
such as sprinkler foam and dry
chemicals, to address fires. Therefore,
industry players that can create
company-specific applications, including
monitoring services, fire alarm systems
and security alarms, will generate
revenue from this market segment.
Also, many clients in this segment use
industry services to prevent burglary and
unauthorized intrusion. Stringent fire
regulations in territories and provinces,
for both new and existing buildings, has
increased demand from this market. This
major market is expected to grow over
the next five years as slowly expanding
corporate profit will enable businesses to
invest more in security alarm services.
International Trade The industry mainly services the security
systems needs of the domestic market.
However, there are foreign-owned players
that operate in the domestic market.
Furthermore, some players in the industry
Provided to: IBISWorld Staff Member (2130086072) | 29 January 2019
Security Alarm Services in CanadaJuly 2018   16
49.7 %
Residential clients
SOURCE: IBISWORLD
Government clients
Concerns about security following
domestic and global terrorist attacks
over the past decade have propelled
federal, provincial and local
governments to review and upgrade
security to protect buildings, equipment
and employees. The primary source of
this demand comes from government
entities, which are estimated to account
for 11.1% of industry revenue.
Governments also use alarm services to
monitor public places, such as parks and
public transportation systems. Over the
next five years, government clients will
remain a relatively stable portion of
industry revenue.
have established operations overseas. For
example, ADT Inc., a major player in
Canada, is based in the United States, while
Ontario-based AlarmForce has more than
10 service centres in the United States.
 WWW.IBISWORLD.CA Security Alarm Services in CanadaJuly 2018   17

Products & Markets

Business Locations 2018

Establishments (%)
Less than 5%
5% to less than 20%
20% to less than 40%
40% or more

NT
YT NU
NORTHERN TERRITORIES
0.3

BC AB SK MB
15.6 13.1 2.2 2.4

QC NL
0.9
ON 21.5
39.7

PE
NB 0.2
1.8 NS
2.3

SOURCE: IBISWORLD

Provided to: IBISWorld Staff Member (2130086072) | 29 January 2019

WWW.IBISWORLD.CA Security Alarm Services in CanadaJuly 2018   18

Products & Markets

Business Locations In general, the Security Alarm Services

Distribution of establishments vs. population
industry in Canada follows the dispersion
of the Canadian population. Also, the
40
industry requires access to the
Electricians industry in Canada
30
(IBISWorld report 23821CA) to install
security surveillance equipment if the
industry player does not provide 20

%
installation in its operations. Therefore,
the most populated territories or 10
provinces in Canada, including Ontario,
which accounts for an estimated 39.7% of 0
total industry establishments, Quebec

Alberta
British Columbia
Manitoba
New Brunswick
Newfoundland
NW Territories
Nova Scotia
Ontario
Prince Edward Island
Quebec
Saskatchewan
(21.5%), British Columbia (15.6%) and
Alberta (13.1%), comprise the largest
share of industry establishments.
According to police-reported crime data
Establishments
from Statistics Canada, demand for
Population
industry services follows the number of SOURCE: IBISWORLD

property crimes rather than the rate of

property crime based on the population
size. For example, Ontario has the largest
number of property crimes, at about
three-tenths of the total number of
crimes in Canada. However, when the
crime rate is taken into account based on
population size, Ontario is below
Canada’s average rate of property crime.
Nevertheless, Ontario has the highest
proportion of industry establishments.
Similarly, Quebec also experiences a
lower property crime rate compared with
the national average.
However, territories and regions,
such as Newfoundland and Labrador,
Prince Edward Island, Nova Scotia,
Manitoba, Saskatchewan, Alberta,
British Columbia, Yukon, Northwest
Territories and Nunavut, experience
higher rates of property crime, based
on their population size, compared with
the national average. While these areas
experience a low number of crimes,
when the number of crimes per
100,000 people is taken into account,
the rate is higher than the national
average. As a result, demand for
industry services in these territories
and provinces will likely increase over
the next five years.

Provided to: IBISWorld Staff Member (2130086072) | 29 January 2019

WWW.IBISWORLD.CA
Competitive Landscape
Market Share Concentration  |   Key Success Factors  |   Cost Structure Benchmarks
Basis of Competition  |   Barriers to Entry  |   Industry Globalization
Market Share The Security Alarm Services industry in
Concentration Canada has a low market share
concentration and is characterized by a
large number of small players. According
Level
to Statistics Canada data and IBISWorld
Concentration in estimates, more than half of industry
this industry is L ow establishments have fewer than five
employees. While these small businesses
account for a large share of the industry,
Key Success Factors Must comply with
government regulations
An understanding of government fire
IBISWorld identifies regulations as they apply to various
250 Key Success building uses is important.
Factors for a
business. The most Effective cost controls
Given the overall low profit margins for
important for this
operators in this industry, it is important
industry are: to have effective cost controls in place.
Ability to quickly adopt new technology
It is advantageous to have access to
the latest technology in fire and
security systems.
Cost Structure Profit
Benchmarks Profit, defined as earnings before
interest and taxes, for the Security
Alarm Services industry in Canada is
expected to account for 8.4% of industry
revenue in 2018. Profit has remained
steady over the past five years due to the
growth in the number of businesses,
which increased demand for new fire
and security system installations.
Industry margins remained steady as a
modest rise in Canadian residential
construction boosted demand for new
systems and alarm services. Moving
forward, industry profit is expected to
remain constant over the five years to
2023, as the industry’s largest operators
are expected to slightly expand through
mergers and acquisitions. This
Provided to: IBISWorld Staff Member (2130086072) | 29 January 2019
Security Alarm Services in Canada July 2018   19
the industry’s largest player also occupies
a significant portion of the market. In
2018, ADT Inc. is expected to account for
14.1% of total industry revenue. Over the
next five years, market share
concentration is expected to rise, as
acquisitions of smaller players that cater
to a market niche of consumers likely rise
between 2018 and 2023.
Ability to vary services to
suit different needs
Different clients require varying levels of
system complexity that are based on their
needs and industry.
Having a good technical
knowledge of the product
Systems providers must fully understand
the capabilities and shortfalls of systems.
Ability to compete on tender
Most large jobs are advertised through
tenders, so being able to compete in this
area is important.
anticipated trend in consolidation will
benefit major players and slightly boost
margins, as these operators typically
have more purchasing power and are
able to negotiate lower prices with
upstream manufacturers and suppliers
of security alarm systems, video and
monitoring equipment.
Purchases
Purchases are expected to account for the
35.9% of industry revenue in 2018.
Companies in this industry must pay for
equipment they install, although the
majority of these equipment costs are
passed on to clients or consumers.
Industry players purchase a variety of
products to be resold to clients, including
cameras, alarms, sprinklers and motion
WWW.IBISWORLD.CA Security Alarm Services in Canada July 2018   20

Competitive Landscape

Cost Structure detectors. Purchase costs have increased
Benchmarks marginally over the past five years, as
rising residential construction propelled
continued
higher demand and prices for security
equipment sold by upstream suppliers.
However, industry operators that are
vertically integrated, such as
AlarmForce, manufacture their own
security devices. Therefore, they are able
to control costs more efficiently, and
purchases typically account for a lower
share of industry revenue.
Wages
The Security Alarm Services industry in
Canada is labour intensive, with wages
accounting for an estimated 34.0% of
industry revenue in 2018. Operators
need workers to install and maintain
alarm systems. Employees are also
needed in corporate offices and for
monitoring remote surveillance systems.
Wages have declined slightly as a
proportion of industry revenue over the
past five years as improving technology
has reduced this industry’s labour
dependence, especially the number of
employees needed for services such as
remote surveillance.
Other
Industry operators incur a variety of
other expenses. Rent and utilities for
companies that lease office and storefront
spaces are expected to account for 4.0%
of industry revenue in 2018.
Depreciation, mainly for investments in
transportation vehicles or buildings that
are not leased, is expected to comprise
2.5% of industry revenue. Marketing
costs are expected to account for 2.0% of
industry revenue in 2018.

Sector vs. Industry Costs

Average Costs of
all Industries in Industry Costs
sector (2018) (2018)
100 n Profit
11.1 8.4 n Wages
n Purchases
80 n Depreciation
34.0 n Marketing
36.6 n Rent & Utilities
n Other
Percentage of revenue

60

40 26.7 35.9

2.7 1.5
20 3.9 2.5 2.0
4.0
17.5 13.2
0
SOURCE: IBISWORLD

Provided to: IBISWorld Staff Member (2130086072) | 29 January 2019

WWW.IBISWORLD.CA
Competitive Landscape
Basis of Competition The overall level of competition in this
industry is medium and steady. However,
moving forward, nonemployers will find
Level & Trend it increasingly difficult to compete with
 ompetition
C in employers that are increasingly moving
this industry is toward providing integrated security
Mediumand the systems that provide better long-term
value and security.
trend is I ncreasing
Internal Competition
In any industry service, industry
response time and reliability are key
factors on which people judge a provider.
A company’s reputation and testimonials
through word of mouth are also
important factors that have an influence
on a consumer’s purchase decisions. It is
hard to redeem a company’s reputation if
it is unable to prevent a security lapse
because consumers of this industry are
extremely risk averse.
Internal competition in this industry is
based on price, reliability, reputation and
the variety of services that a single
operator can provide. Companies in this
industry charge their users an installation
fee and a monthly subscription fee.
Companies compete on both these
factors. Some companies have higher
installation fee and lower subscription
fee while others have higher subscription
and lower installation fee. Furthermore,
some companies waive the installation
fee altogether in favour of term contracts,
which bind consumers to that provider
for a period of time. The contracts usually
range from twelve to forty-two months.
Companies within this industry are
also moving toward providing integrated
security systems that are technologically
advanced and help consumers protect
themselves against accidents, burglaries
Provided to: IBISWorld Staff Member (2130086072) | 29 January 2019
Security Alarm Services in Canada July 2018   21
and emergencies while also equipping
them to monitor their heating, lighting
and other facilities. A greater number of
companies are also introducing
smartphone apps that enable consumers
to avail all of these services.
External Competition
The primary source of external
competition for this industry is the
security services industry. This industry
provides consumers with integrated
security solutions along with armed and
unarmed guards, bullet proof vehicles
for the transportation of cash and other
valuables and private security for high
value or high-risk individuals and
buildings. However, these services are
only consumed by relatively large
corporate clients or high value
individuals, which form a relatively
smaller part of the population. Security
guards and alarm systems are
increasingly being used to complement
each other as more consumers start
moving toward integrated security
solutions that are preventive as
opposed to alarm systems that mostly
go off after the security breach has
already taken place.
Additionally, technological
advancements have enabled homeowners
to control their security systems,
thermostats and other major appliances
from anywhere via their computers or
mobile devices. This has increased external
industry competition over the past five
years, as Canadian cable and telecom
companies have leveraged their existing
information technology infrastructure to
establish and market similar home
automation and security services.
WWW.IBISWORLD.CA
Competitive Landscape
Barriers to Entry
Level & Trend
 arriers to Entry
B players are likely to obtain more high-
in this industry are
Lowand S  teady
Industry
Globalization
Level & Trend
 lobalization
G in this
industry is L owand
the trend is S  teady
Provided to: IBISWorld Staff Member (2130086072) | 29 January 2019
The Security Alarm Services industry in
Canada has a low level of market
concentration, which indicates there are
few barriers to entry. However, large
value clients based on their established
reputation and strong customer service.
Large players also typically have the
distribution network necessary to provide
services across provinces and territories.
Nevertheless, the industry is typified by a
high level of fragmentation, which
enables industry players to enter the
industry and cater to a market niche of
local clientele.
While the barriers to entry may be
significant for large security installation
projects due to significant price-based
competition, the barriers are far lower
on smaller projects. Capital intensity on
these projects can be higher, but many
costs are passed onto the client. Many
operators are subcontractors for major
players for installation and
maintenance services. Training is
required to install fire and security
systems, and it is also important to
have knowledge pertaining to fire
regulations and how they apply to
different classes of buildings and uses.
Similar to other service industries, the
Security Alarm Services industry in
Canada experiences low globalization,
with only the largest players in the
Security Alarm Services in Canada July 2018   22
Barriers to Entry checklist
Competition Medium
Concentration Low
Life Cycle Stage Mature
Capital Intensity Low
Technology Change Medium
Regulation & Policy Light
Industry Assistance Low
SOURCE: IBISWORLD
While price-based competition does not
deter potential industry players from
entering the industry, larger operations
can secure economies of scale by
generating a large number of
subscribers, which covers overhead
costs, including dispatch staff. Another
potential barrier to entry is
technological innovation. For example,
ADT Inc. appeals to technologically
savvy consumers by permitting users to
access security services from their
smart phone and tablet. Industry
players that offer technological
innovations, such as security services
with temperature monitoring and other
features, will likely develop a foothold
in the industry over the next five years.
industry operating internationally.
Industry major player ADT Inc., for
instance, has extensive operations in the
United States.
WWW.IBISWORLD.CA Security Alarm Services in CanadaJuly 2018   23

Major Companies
ADT LLC | Other Companies

Major players
(Market share)

85.9%
Other

ADT LLC 14.1% SOURCE: IBISWORLD

Player Performance Incorporated in 2012, ADT Inc. (ADT) application for Pulse mobile users.
was formed as a spin-off from industrial Moreover, ADT has forged new
conglomerate Tyco International. The partnerships with interactive security and
ADT LLC company’s history, however, dates back climate control systems manufacturers.
Market share: 14.1% to 1874, when the company operated as In November 2015, ADT announced an
the American District Telegraph expanded partnership with Google’s Nest
Company. Currently, ADT is a provider of home automation products, with current
electronic security and monitoring and new ADT customers now able to
services for homes and businesses, with seamlessly integrate the Nest Learning
operations in the United States and Thermostat with the ADT Pulse system.
Canada. ADT has more than 18,000
employees engaged in the sale, Financial performance
distribution, installation and monitoring Over the five years to 2018, industry-
of security systems. relevant revenue is anticipated to
ADT has also led the industry in increase strongly at an annualized rate of
technological innovations with the 68.1% to $323.2 million. During this
introduction of ADT Pulse, a product that period, ADT experienced some organic
streamlines home automation features growth, as the company’s strong
with electronic security systems. These technological innovations, as well as
innovations include a voice application marketing campaigns to generate brand
for hands-free voice control of the Pulse awareness, successfully generated new
system, an expansion of garage door monitoring services subscriptions.
control and a personal data-protection Additionally, most of the growth in

ADT Inc. (industry-relevant operations) - financial performance*

Revenue Operating profit
Year ($ million) (% change) ($ million) (% change)
2013 24.1 N/C 1.3 N/C
2014 28.1 16.6 2.5 92.3
2015 38.3 36.3 -2.0 N/C
2016** 210.0 448.3 -16.3 715.0
2017 310.5 47.9 20.3 N/C
2018 323.2 4.1 21.1 3.9

*Estimates (Figures are converted from USD to CAD); **Acquired by Apollo Global Management, LLC
SOURCE: ANNUAL REPORT AND IBISWORLD

Provided to: IBISWorld Staff Member (2130086072) | 29 January 2019

WWW.IBISWORLD.CA
Major Companies
Player Performance revenue growth during this period,
continued especially during 2015 and 2016, was
driven by acquisitions.
In July 2014, ADT completed the
$560.0-million acquisition of Reliance
Protectron Inc. (Reliance), a leading
provider of monitored security services in
Canada. The acquisition of Reliance
significantly strengthened ADT’s
Canadian operations by doubling its
domestic customer base and bringing in
400,000 residential and commercial
customers, including 31,000 contract
monitoring accounts. Nevertheless, the
addition of an estimated 900 employees
Other Company Founded in 1988, AlarmForce Industries
Performance Inc. (AlarmForce) provides security
alarm and personal emergency response
monitoring services to subscribers in
AlarmForce Canada and the United States.
Industries Inc. Additionally, the company provides video
Market share: 1.8% surveillance and is a leading provider of
two-way voice security systems in
Canada. With a proprietary wireless
two-way voice controller known as the
AlarmVoice System, the company offers
live two-way voice communication to
provide immediate response or assistance
in the event of emergencies. The
company has vertically integrated
operations, which include manufacturing,
installing, servicing and monitoring
subscriber systems. Industry-relevant
locations include Toronto, Quebec,
British Columbia and Alberta.
AlarmForce’s revenue is estimated to
have grown organically through new
subscriber accounts and value-added
service expansions. Examples of product
and service innovations include
AlarmForce’s VideoRelay system, which
permits users to view images of their
property or business remotely through an
internet-enabled device, such as a tablet.
Additionally, the company’s AlarmCare
System is catered toward elderly or
Provided to: IBISWorld Staff Member (2130086072) | 29 January 2019
Security Alarm Services in CanadaJuly 2018   24
and the subsequent integration costs
associated with the Reliance acquisition
increased company costs and pressured
company margins over the past five
years. These incremental costs are
expected to increase over the next few
years, as ADT itself was acquired by
private equity firm Apollo Global
Management (Apollo) for just under $7.0
billion in February 2016. Apollo is also
the owner of Protection One Inc., another
major North American security alarm
services company. The merging of these
businesses led to the dramatic revenue
growth that occurred in 2016.
disabled individuals and designed to help
people live independently at home, as
users can access security personnel or
medical assistance with a lightweight,
waterproof pendant or bracelet. This
product and service offering is tailored to
Canada’s expanding elderly population.
In 2014, AlarmForce launched two new
value-added products. CellWave provides
users with live, two-way voice security
protection, regardless of whether the
client has a home phone system or
telephone line. AlarmForce Connect is
similar to the company’s VideoRelay
service, but enables homeowners to
remotely arm and disarm their security
system, send and receive email
notifications and view their security and
alarm history. More recently, in April
2015, AlarmForce launched Wi-Fi-
enabled door locks and power plugs as
part of the company’s AlarmForce
Connect home automation services.
Currently, the company offers a range of
home automation products and services,
including garage door controllers, light
bulbs and smart thermostats.
A progressively wealthy and expanding
Canadian population helped bolster the
company’s subscriber base, which has
grown to more than 136,500 customers.
WWW.IBISWORLD.CA
Major Companies
Other Company Meanwhile, an expansion of premium
Performance service offerings, such as the AlarmForce
Connect system, led to an increase in the
continued
average monthly subscription rate for
new subscribers. Therefore,
AlarmForce’s industry-specific revenue
is expected to total $40.8 million in
Other Company In January 2015, Johnson Controls
Performance International plc (JC) and Ireland-based
Tyco International plc (Tyco) agreed to
merge as part of a $14.0 billion deal. The
Johnson Controls combination created a mega-provider of
International PLC commercial building systems, with an
Market share: 1.7% estimated 30,000 employees and slightly
more than $37.0 billion in annual
revenue. JC will continue to specialize in
manufacturing HVAC equipment, while
Tyco will offer industry-relevant security
and fire-suppression systems for offices,
factories, schools and other
nonresidential buildings.
Tyco divides its operations into three
business segments: North American
installation and services, rest-of-world
installation and services and global
products. The prior two segments provide
installation, design and monitoring
services for Tyco’s fire, gas, chemical and
security alarm systems. Revenue from
manufacturing activities, including the
sale of fire and security alarms and
monitoring systems, as well as revenue
from the initial installation of this
equipment, are excluded from this
Other Company Avante Logixx Inc. (Avante Logixx) is a
Performance Toronto-based company that provides
technologies, products and solutions for
personal and commercial monitoring
Avante Logixx Inc. services through its subsidiary, Avante
Market share: 0.5% Security Inc. The company offers a
diverse portfolio of security services, such
as system design, installation and
monitoring. The company, which
Provided to: IBISWorld Staff Member (2130086072) | 29 January 2019
Security Alarm Services in CanadaJuly 2018   25
2018. However, unlike many other
industry operators, AlarmForce develops
and manufactures their own security
alarm products. As a result, a greater
emphasis on production and innovative
product features has led to an increase
in research-related costs.
industry. However, recurring contractual
revenue from Tyco’s security and fire
alarm monitoring and maintenance
services are industry-relevant.
In Canada, Tyco provides remote
surveillance and security solutions,
including intrusion detection and access
control from two primary monitoring
centres in Toronto and Montreal. These
facilities are compliant with UL
certifications and are staffed around the
clock by technical assistance specialists.
Tyco’s security monitoring services are
primarily sold to industrial, retail, small
business, institutional and other
commercial markets. Similar to other
operators in this industry, Tyco’s
security and fire alarm monitoring
services have benefited from a slight rise
in corporate profit, which encouraged
spending on business and building
improvements. An increase in the
number of businesses also increased the
company’s potential client base.
IBISWorld estimates Tyco’s industry-
relevant revenue will total $38.8 million
in 2018.
analyzes risk and provides clients with
customized security solutions, also
provides customers with alarm response
and patrols, personal protection, training
of house staff and secure transportation.
However, revenue from the company’s
guard, secure transport and patrol
services are not relevant to this industry,
as they are included in the Security
WWW.IBISWORLD.CA
Major Companies
Other Company Services industry in Canada (IBISWorld
Performance report 56161CA).
Technological innovations, including
continued
the company’s Interactive Communicator
and SmartBoxx, enable alarm signals to
be sent directly to the company’s 24/7
control centre to prevent break-ins and
property theft before the crime occurs.
The company’s residential Rapid Alarm
Response provides a competitive
response time of six minutes or less for
operators to arrive on the scene after the
alarm is triggered. By offering consulting
services that individually tailor security
services to meet a company’s needs and
responding quickly, the company has
Provided to: IBISWorld Staff Member (2130086072) | 29 January 2019
Security Alarm Services in CanadaJuly 2018   26
developed a market niche among
businesses in Toronto. This niche
expanded in August 2014 when the
company acquired Into-Electronics Inc.,
a custom security and automation
services integrator, that offers security
monitoring, electronic building
management and around-the-clock
support. Moreover, in 2015, Avante
Logixx acquired LVS Inc., another alarm,
monitoring and service integrator that
specializes in providing security solutions
for the high-end residential market. In
2018, the company is anticipated to
generate $10.9 million in industry-
relevant revenue.
WWW.IBISWORLD.CA Security Alarm Services in CanadaJuly 2018   27

Operating Conditions
Capital Intensity   |   Technology & Systems   |   Revenue Volatility
Regulation & Policy   |   Industry Assistance

Capital Intensity The Security Alarm Services industry in

Canada has a low level of capital intensity. Capital intensity
Capital units per labour unit
For every dollar spent on labour, operators
Level
are estimated to spend $0.07 capital. The 0.5
The levelof capital industry is highly labour intensive, with
intensity is L ow wages expected to consume 34.0% of 0.4

industry revenue in 2018. Security alarm 0.3

services companies rely heavily on labour
for all aspects of the business, requiring 0.2

employees to install and maintain alarm 0.1

systems, monitor possible security
breaches and respond by notifying the 0.0
Economy Admin, Business Security Alarm
proper authorities. However, a significant Support & Waste Services
Mgmt Services
portion of these employees work part-time, Dotted line shows a high level of capital intensity
which helps industry operators control SOURCE: IBISWORLD

labour-related expenses and contributes to

the steady average wage.

Provided to: IBISWorld Staff Member (2130086072) | 29 January 2019

WWW.IBISWORLD.CA
Operating Conditions
Technology & Systems The Security Alarm Services industry in
Canada designs, installs and maintains
Level automation systems that detect intrusion,
control access and react to movement
The level
of and environmental hazards such as
Technology Change smoke, carbon monoxide, flooding and
is M
 edium temperature. These systems may also be
designed to address personal
emergencies, such as injuries, medical
crises or incapacitation. When an alarm
is triggered, these electronic security
systems connect to a control or
monitoring centre, where personnel are
trained to assess the situation and relay
the information to the appropriate party.
Technological change has been
moderate in the industry over the past
five years. Research and development
into new security systems has led to more
sophisticated biometric programs, such
Revenue Volatility The Security Alarm Services industry
in Canada has a moderate level of
revenue volatility. The industry’s
Level
broad and diverse customer base,
The level of which includes a range of consumers,
Volatility is M
 edium businesses and government offices,
helps dampen the industry’s exposure
Provided to: IBISWorld Staff Member (2130086072) | 29 January 2019
Security Alarm Services in CanadaJuly 2018   28
as fingerprint, iris and facial recognition
access and control systems. State-of-the
art technology can now offer climate
control and energy management. The
industry has also introduced interactive
technologies that enable customers to
remotely monitor and manage events at
their home or small business through
electronic security systems.
Over the past five years,
technological advancements have
offered homeowners the ability to
control their security systems,
thermostats and other major appliances
from anywhere via their computers or
mobile devices. These state-of-the-art
technological solutions have been a
positive driver for industry growth and
also led to additional competition for
traditional industry operators.
to fluctuations in the business cycle
and shelters against the poor
performance of one or more
downstream markets. Over the five
years to 2018, industry revenue
increased as much as 7.0% in 2014 and
declined as much as 0.1% in 2017.
WWW.IBISWORLD.CA
Operating Conditions
Regulation & Policy The Security Alarm Services industry in
Canada is largely regulated by laws
within individual provinces or cities,
Level & Trend with a low level of national oversight.
 he level of
T Provincial or municipal regulations
Regulation is L ight include fines for false fire alarms,
and the trend electrical code requirements and
registration fees for newly installed
is I ncreasing
alarms. In Nova Scotia, new houses
must have interconnected smoke
alarms with battery backups on every
floor and in each bedroom. In Quebec,
Industry Assistance The Security Alarm Services industry in
Canada does not receive official
assistance from the Canadian
Level & Trend government. However, there are several
 he level of
T independent organizations that
Industry Assistance advocate for security companies, such
is L owand the as the Canadian Security Association
(CANASA). Established in 1977,
trend is S teady
CANASA is a national not-for-profit
organization dedicated to protecting
and promoting the interests of the
security industry as well as the safety of
all Canadians through education and
advocacy. CANASA has 1,300-member
organizations in 10 chapters and
subchapters across the country. Other
national associations include the
American Society for Industrial
Security Canada (ASIS Canada) and
Provided to: IBISWorld Staff Member (2130086072) | 29 January 2019
Security Alarm Services in CanadaJuly 2018   29
the Private Security Act requires all
companies and persons installing or
maintaining electronic security systems
to obtain a licence from the Private
Security Bureau. After the Private
Security Act was implemented in July
2010, industry operators had three
months to submit an application and
six months to attain the permit.
Companies have to pay for the licence
as well as for every person required to
have a background check.
Association of Professional Security
Agencies (APSA).
At a provincial level, the Security and
Investigators Alliance of Nova Scotia (SIA)
was formed in July 2007 in response to
concerns expressed by government that
there was not a single group representing
the security industry in Nova Scotia. SIA is
an ad hoc committee that includes
CANASA, Atlantic Canada (Council of
Private Investigators), the Canadian
Association of Private Investigators,
Canadian Society for Industrial Security,
American Society for Industrial Security
and Commissionaires Nova Scotia. SIA
works with the Department of Justice to
provide expertise in the crafting of
legislation regarding the security industry
in Nova Scotia.
Key Statistics
Industry Data Industry Crime rate
Revenue Value Added Establish- Wages Domestic (Crimes per
($m) ($m) ments Enterprises Employment Exports Imports ($m) Demand 100,000 people)
2009 2,286.5 991.5 3,243 3,162 14,794 -- -- 787.0 N/A 7,281.5
2010 2,142.7 1,088.5 3,307 3,225 14,964 -- -- 888.6 N/A 6,996.4
2011 2,182.0 1,073.7 3,334 3,250 14,595 -- -- 831.2 N/A 6,627.1
2012 2,122.1 942.9 3,293 3,222 14,288 -- -- 716.7 N/A 6,458.8
2013 2,011.1 884.9 3,318 3,235 12,556 -- -- 671.4 N/A 5,970.0
2014 2,151.9 959.4 3,406 3,317 12,797 -- -- 722.2 N/A 5,775.6
2015 2,222.3 1,001.7 3,448 3,364 13,322 -- -- 751.1 N/A 5,910.1
2016 2,245.8 998.1 3,537 3,456 13,047 -- -- 756.0 N/A 5,904.5
2017 2,244.5 1,008.3 3,667 3,588 13,191 -- -- 762.6 N/A 5,752.2
2018 2,284.7 1,025.9 3,721 3,640 13,399 -- -- 776.3 N/A 5,601.2
2019 2,348.7 1,051.2 3,780 3,695 13,635 -- -- 793.8 N/A 5,451.6
2020 2,396.3 1,071.4 3,827 3,740 13,840 -- -- 808.1 N/A 5,303.4
2021 2,447.5 1,091.1 3,875 3,785 14,006 -- -- 821.1 N/A 5,156.5
2022 2,498.9 1,113.2 3,941 3,849 14,240 -- -- 837.2 N/A 5,010.9
2023 2,554.5 1,135.7 4,013 3,918 14,452 -- -- 852.8 N/A 4,866.7

Annual Change Industry Establish- Domestic

Revenue Value Added ments Enterprises Employment Exports Imports Wages Demand Crime rate
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
2010 -6.3 9.8 2.0 2.0 1.1 N/A N/A 12.9 N/A -3.9
2011 1.8 -1.4 0.8 0.8 -2.5 N/A N/A -6.5 N/A -5.3
2012 -2.7 -12.2 -1.2 -0.9 -2.1 N/A N/A -13.8 N/A -2.5
2013 -5.2 -6.2 0.8 0.4 -12.1 N/A N/A -6.3 N/A -7.6
2014 7.0 8.4 2.7 2.5 1.9 N/A N/A 7.6 N/A -3.3
2015 3.3 4.4 1.2 1.4 4.1 N/A N/A 4.0 N/A 2.3
2016 1.1 -0.4 2.6 2.7 -2.1 N/A N/A 0.7 N/A -0.1
2017 -0.1 1.0 3.7 3.8 1.1 N/A N/A 0.9 N/A -2.6
2018 1.8 1.7 1.5 1.4 1.6 N/A N/A 1.8 N/A -2.6
2019 2.8 2.5 1.6 1.5 1.8 N/A N/A 2.3 N/A -2.7
2020 2.0 1.9 1.2 1.2 1.5 N/A N/A 1.8 N/A -2.7
2021 2.1 1.8 1.3 1.2 1.2 N/A N/A 1.6 N/A -2.8
2022 2.1 2.0 1.7 1.7 1.7 N/A N/A 2.0 N/A -2.8
2023 2.2 2.0 1.8 1.8 1.5 N/A N/A 1.9 N/A -2.9

Key Ratios Imports/ Exports/ Revenue per Share of the

IVA/Revenue Demand Revenue Employee Wages/Revenue Employees Average Wage Economy
(%) (%) (%) ($’000) (%) per Est. ($) (%)
2009 43.36 N/A N/A 154.56 34.42 4.56 53,197.24 0.01
2010 50.80 N/A N/A 143.19 41.47 4.52 59,382.52 0.01
2011 49.21 N/A N/A 149.50 38.09 4.38 56,951.01 0.01
2012 44.43 N/A N/A 148.52 33.77 4.34 50,160.97 0.01
2013 44.00 N/A N/A 160.17 33.38 3.78 53,472.44 0.01
2014 44.58 N/A N/A 168.16 33.56 3.76 56,435.10 0.01
2015 45.07 N/A N/A 166.81 33.80 3.86 56,380.42 0.01
2016 44.44 N/A N/A 172.13 33.66 3.69 57,944.36 0.01
2017 44.92 N/A N/A 170.15 33.98 3.60 57,812.14 0.01
2018 44.90 N/A N/A 170.51 33.98 3.60 57,937.16 0.01
2019 44.76 N/A N/A 172.26 33.80 3.61 58,217.82 0.01
2020 44.71 N/A N/A 173.14 33.72 3.62 58,388.73 0.01
2021 44.58 N/A N/A 174.75 33.55 3.61 58,624.88 0.01
2022 44.55 N/A N/A 175.48 33.50 3.61 58,792.13 0.01
2023 44.46 N/A N/A 176.76 33.38 3.60 59,009.13 0.01

Figures are in inflation-adjusted 2018 dollars. SOURCE: IBISWORLD

Provided to: IBISWorld Staff Member (2130086072) | 29 January 2019

WWW.IBISWORLD.CA
Jargon & Glossary
Industry Jargon REMOTE ACCESSThe ability to connect to a system
from a remote location.
TWO-WAY VOICE SYSTEMSWhen an alarm is
triggered, two-way voice communication security
systems allow dispatchers to hear what is occurring in a
residence or business and communicate with clients.
IBISWorld Glossary BARRIERS TO ENTRYHigh barriers to entry mean that
new companies struggle to enter an industry, while low
barriers mean it is easy for new companies to enter an
industry.
CAPITAL INTENSITYCompares the amount of money
spent on capital (plant, machinery and equipment) with
that spent on labour. IBISWorld uses the ratio of
depreciation to wages as a proxy for capital intensity.
High capital intensity is more than $0.333 of capital to
$1 of labour; medium is $0.125 to $0.333 of capital to
$1 of labour; low is less than $0.125 of capital for every
$1 of labour.
CONSTANT PRICESThe dollar figures in the Key
Statistics table, including forecasts, are adjusted for
inflation using the current year (i.e. year published) as
the base year. This removes the impact of changes in
the purchasing power of the dollar, leaving only the
“real” growth or decline in industry metrics. The inflation
adjustments in IBISWorld’s reports are made using
Statistics Canada’s implicit GDP price deflator.
DOMESTIC DEMANDSpending on industry goods and
services within Canada, regardless of their country of
origin. It is derived by adding imports to industry
revenue, and then subtracting exports.
EMPLOYMENTThe number of permanent, part-time,
temporary and casual employees, working proprietors,
partners, managers and executives within the industry.
ENTERPRISEA division that is separately managed and
keeps management accounts. Each enterprise consists
of one or more establishments that are under common
ownership or control.
ESTABLISHMENTThe smallest type of accounting unit
within an enterprise, an establishment is a single
physical location where business is conducted or where
services or industrial operations are performed. Multiple
establishments under common control make up an
enterprise.
EXPORTSTotal value of industry goods and services sold
by Canadian companies to customers abroad.
IMPORTSTotal value of industry goods and services
brought in from foreign countries to be sold in Canada.
INDUSTRY CONCENTRATIONAn indicator of the
dominance of the top four players in an industry.
Concentration is considered high if the top players
account for more than 70% of industry revenue.
Medium is 40% to 70% of industry revenue. Low is less
than 40%.
Provided to: IBISWorld Staff Member (2130086072) | 29 January 2019
Security Alarm Services in CanadaJuly 2018   31
VALUE-ADDEDAdditional features that increase the
price or value of a product or service.
INDUSTRY REVENUEThe total sales of industry goods
and services (exclusive of excise and sales tax); subsidies
on production; all other operating income from outside
the firm (such as commission income, repair and service
income, and rent, leasing and hiring income); and
capital work done by rental or lease. Receipts from
interest royalties, dividends and the sale of fixed
tangible assets are excluded.
INDUSTRY VALUE ADDEDThe market value of goods
and services produced by the industry minus the cost of
goods and services used in production. IVA is also
described as the industry’s contribution to GDP, or profit
plus wages and depreciation.
INTERNATIONAL TRADEThe level of international
trade is determined by ratios of exports to revenue and
imports to domestic demand. For exports/revenue: low is
less than 5%; medium is 5% to 20%; and high is more
than 20%. Imports/domestic demand: low is less than
5%; medium is 5% to 35%; and high is more than
35%.
LIFE CYCLEAll industries go through periods of growth,
maturity and decline. IBISWorld determines an
industry’s life cycle by considering its growth rate
(measured by IVA) compared with GDP; the growth rate
of the number of establishments; the amount of change
the industry’s products are undergoing; the rate of
technological change; and the level of customer
acceptance of industry products and services.
NONEMPLOYING ESTABLISHMENTBusinesses with
no paid employment or payroll, also known as
nonemployers. These are mostly set up by self-employed
individuals.
PROFITIBISWorld uses earnings before interest and tax
(EBIT) as an indicator of a company’s profitability. It is
calculated as revenue minus expenses, excluding
interest and tax.
VOLATILITYThe level of volatility is determined by
averaging the absolute change in revenue in each of the
past five years. Volatility levels: very high is more than
±20%; high volatility is ±10% to ±20%; moderate
volatility is ±3% to ±10%; and low volatility is less than
±3%.
WAGESThe gross total wages and salaries of all
employees in the industry. Benefits and on-costs are
included in this figure.
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