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The 2009 budget contains several major
initiatives requested by ITAC to ensure a sound 21st century economy for
Canada and the health of the ICT sector. It proposes a 100 per cent capital
cost allowance rate for computer hardware and systems software acquired
between January 27, 2009 and February 1, 2011. This measure will allow
business taxpayers to fully expense all of the value of their investment in
computers and systems in one year. "Much has been said about the need for
'shovel-ready' stimulus programs that will have a swift impact on buying
decisions," said Bernard Courtois, President and CEO of ITAC, the Information
Technology Association of Canada. "This measure will have a nearly $700
million impact on the ICT marketplace over the next two years. It is also a
clear indication that the Government understands the strong linkage between
productivity growth and ICT investment which ITAC has championed for many
years. "This is good for our industry but it is also a great benefit for the
broader economy. It's very wise public policy."
ITAC also advocated that infrastructure spending in this Budget should
also include 21st century infrastructure, such as the funding of Canada's
electronic health record and the expansion of Canada's broadband networks. The
Budget has a $500 million provision to help fund Canada Health Infoway and its
goal of enabling 50 per cent of Canadians to access their electronic health
record by 2010. In addition this funding will be used to speed up the
implementation of an electronic medical system for physicians, hospitals,
community healthcare facilities, pharmacies and patients. "We called for an
appropriate investment for this," Mr. Courtois said. "Electronic health
records are a vital part of 21st century infrastructure and will deliver
profound benefits to all Canadians. They will improve patient outcomes and
deliver efficiencies into the healthcare systems and they will save lives.
This funding is a significant step toward getting this task completed."
Another key component of 21st century infrastructure is broadband
networks - the electronic highways that carry commerce, culture and social
interaction to even the most remote locations. The Budget contains $225
million allocation over three years to develop and implement a strategy on
extending broadband coverage to un-served communities. This initiative will
engage additional funding from other levels of government and the private
sector to continue to expand Canada's broadband network.
ITAC also called upon Government to increase funding for the National
Research Council's Industrial Research Assistance Program, noting that IRAP
funding for 2008 had been virtually depleted by mid year. This Budget provides
$200 million over two years and will allow the program to double its
contributions to emerging knowledge-based companies. The Budget also renews
commitments to public investment in research by expanding the Canada Graduate
Scholarships Program and funding for the national granting councils.
Waterloo's Institute for Quantum Computing received a $50 million allocation
for the construction of its new facility.
The Government will also continue in efforts to reduce the general level
of corporate income tax. It aims to drop the current rate of 22.12 percent to
15 percent by 2012. At that time, Canada will boast the lowest rate in the
Group of Seven.
"This was not a simple Budget," Mr. Courtois said. "The Government faced
the urgent requirements of many distressed sectors. Our concern was that they
keep their eyes on the future while addressing pressing present need. They
have done this in a commendable way that helps to ensure that we have some key
tools at our disposal - 21st century infrastructure, a well-educated
workforce, a competitive tax structure and a more productive economy - to
recover quickly from the economic downturn we face."
"This is a very good Budget," he said. "However, we continue to be deeply
concerned about the virtual drought of venture capital in Canada for early
stage technology ventures. This Budget contains measures to increase access to
funding for EDC and BDC and there is the increase to the IRAP program that
will help very early ventures. But we still need to address the needs of
companies who rely on venture capital for growth. If we don't figure out a way
to get venture capital flowing again in Canada we could lose a whole
generation of promising technology ventures. We plan to continue to work with
our stakeholders and with Government to address this urgent matter."
About Information Technology Association of Canada (ITAC)
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 572,000 jobs, $140.5 billion in revenue, $6.0 billion in R&D
investment, $31.4 billion in exports and $11.4 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
Senior Vice President
(613) 238-2250 ext. 223
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