Posted March 4, 2010
Ottawa. March 4, 2010. Today’s Budget 2010 reiterated yesterday’s commitment in the Speech from the Throne “to launch a digital economy strategy to drive the adoption of new technology across the country,” but offered no details or provisions for the strategy, or any new information about when the strategy would be unveiled. The Government has been careful in recent weeks to set no expectations of new funding initiatives and a great deal of the Budget focused on the roll-out of two year programs announced last year.
For example, Broadband Canada, a program to expand coverage to unserved areas, expects to identify and fund its successful applications in 2010. And the Government is “moving forward” with the transfer of the $500-million that was announced in Budget 2009 to ensure that 50 percent of Canadians have electronic health records (EHR’s) by 2010. This is an extremely important step, as EHR’s are vital to a strong and modern healthcare system in Canada.
The Speech from the Throne spoke of the need to “fuel the ingenuity of Canada’s best and brightest and bring innovative products to market.” The Budget addressed this primarily through significant increases in funding to the granting councils, Canadian Foundation for Innovation, and specific public research institutions. Budget 2010 does contain one new measure to advance enterprise innovation. It has created a two-year pilot program where Federal agencies will adopt and demonstrate the use of innovative products and technologies developed by small and medium-sized businesses. ITAC has supported the idea of such an initiative. $40-million has been allocated for this purpose. The National Research Council’s regional innovation clusters program will receive an additional $135-million to foster knowledge transfer among business, academia, and government.
Budget 2010 asserts that the “Government is taking steps to improve its support for innovation and ensure that investments are effective and yield the best possible result for Canadians.” It has announced another comprehensive review of all Federal support for R&D including the SR&ED tax credit, although timing and terms of reference for this review are still pending.
This Budget contained few references to the capital crisis facing many emerging knowledge-based firms. Here, the focus is primarily on non-monetary measures to free investment capital. Section 116 of the Income Tax Act has been an impediment for on-resident investors in Canadian firms. Budget 2010 indicates the Act will be amended to eliminate onerous compliance obligations for non-resident shareholders of corporations. ITAC has advocated for and welcomes this change as one measures to eliminate dis-incentives for investment.
The Information Technology Association of Canada (ITAC) is the voice of the Canadian information and communications technologies (ICT) industry. ITAC represents a diverse ICT community spanning telecommunications and internet services, ICT consulting services, hardware, microelectronics, software and electronic content. ITAC’s community of companies accounts for more than 70 per cent of the 572,700 jobs, $155.3-billion in revenue, $6.22-billion in R&D investment, $30.4-billion in exports and $11.8-billion in capital expenditures that the ICT industry contributes annually to the Canadian economy. ITAC is a prominent advocate for the expansion of Canada’s innovative capacity and for stronger productivity across all sectors through the strategic use of technology.
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For further information, please contact:
Senior Vice President, ITAC
(613) 238-2250 ext. 223