Broadband gets left out of federal budget, unforeseen events cause headaches

The Information Technology Association of Canada (ITAC) has both praise and criticism for this year’s federal budget. While ITAC recognizes that unforeseen events made it difficult on the government to put the right foot forward and usher in a new era in the Canadian communications transformation, it still reserves some criticism for the budget. The following is a statement released by ITAC on Dec. 11 that it titled, "Vendors win, visionaries lose in Budget 2002". The 2002 Federal Budget contains good news for the vendors of technology solutions, but very little to encourage advocates of a more innovative Canadian economy. The biggest surprise, from what has been described as the most-leaked budget in history, was a commitment to fund Government On-Line (GOL) initiatives by $600 million over the next four years. This is a welcome reaffirmation of the government’s commitment to GOL, which was first expressed in 1999 but never formally reiterated in a budget until today. ITAC was concerned that GOL might be sacrificed to other priorities, and lobbied extensively for a clear budget line. This commitment is in addition to a $1.2 billion initiative to enhance security and the free flow of goods across the Canada U.S. border, and a further $2.2 billion to enhance air security. The budget acknowledges that the acquisition of new advanced technology will be essential to these initiatives. Beyond this, there was very little to suggest a link between February’s Throne Speech and December’s Budget. The Throne Speech stressed the urgent priority to expand Canada’s capacity for innovation. The word innovation barely appears in Budget 2002. The anticipated $110 million investment in broadband will go entirely to fund CA*net 4 (the option least favoured by the Broadband Task Force). This, coupled with renewed funding of SchoolNet and the Community Access program will do little to actually expand the reach of the broadband network into unserved communities. It is particularly ironic that a new $2 billion Strategic Infrastructure Foundation is designed to support community road, sewer and convention centre projects. But connectivity projects are precluded. The budget boasts "$1 billion of targeted investments over three years to promote leading edge research." But in effect, this investment isn’t targeted at all. NSERC will receive a 7 percent raise in annual funding and an additional $110 million will go to expand the NRC’s regional innovation initiatives. ITAC has argued that the IT industry, particularly disciplines such as microelectronics, photonics and opto-electronics, receive a small share of this funding that is vastly out of proportion with its ability to create employment and wealth. We have also argued that our old funding instruments are unaccountable for delivering any return on the public investment they receive. We have argued along with our colleagues in the eMPOWR campaign, that simply pouring more money into granting institutions will not advance our capacity for commercializable R&D. It looks like we will continue that argument into 2002. While it was short on vision, the 2002 Budget was strong on solid financial management. It does not deviate from previous commitments to personal and corporate tax reform. For example, corporate taxes for the service sector will drop a further 2 per cent as scheduled on January 1, 2002. And there is also a commitment to maintain Minister Martin’s record of fiscal integrity by balancing the budget for the next two years. Like the Brooklyn Dodgers, we came so close. After years of advocating for the transformational change necessary to move Canada into the knowledge economy, unforeseen events and changing priorities have postponed the realization of this vision once again.

Broadband gets left out of federal budget, unforeseen events cause headaches

News | December 11, 2001

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