Tax changes would spur telecom investment: industry groups

OTTAWA — Changing the tax system could increase the level of investment in wireless network infrastructure, the House of Commons standing committee on finance heard Wednesday night as part of the 2016 pre-budget consultations. Submissions from two industry groups asked lawmakers to consider increasing the capital cost allowance (CCA) — which businesses can claim for depreciable expenses — for classes of machinery and equipment used to build and operate network infrastructure. Kurt Eby, director of regulatory affairs and government relations for the Canadian Wireless Telecommunications Association (CWTA), told the committee that a change like this would "return significant benefits to Canadians and the national economy." Currently, expenses that fall under class 46 — data network infrastructure equipment and systems software acquired after the spring of 2004 — have a CCA of 30 per cent. Increasing that rate to 50 per cent "would increase telecom investment by $122 million per year in the near term," said Eby. "If the rate is increased permanently to 50 per cent, the increased investment would total as much as $225 million per year, would create an additional 1,660 full-time jobs and would add $163 million to the GDP." When asked by Liberal committee member Raj Grewal if any component of the additional revenue could be transferred to customers, Eby said that "the request is that this change would free up more capital to invest, and that's what we're here pursuing." A call to make that increase was echoed by a written submission to the committee by the Information Technology Association of Canada, which did not appear in front of the committee Wednesday. In a brief published on the committee's website, the association made a series of recommendations for lawmakers to consider. In addition to the CCA increase, the association called for more focus on the Internet of Things (IoT) and recommended the creation of an IoT Secretariat "in order to have a comprehensive national discourse," that's comparable to previous initiatives on the information highway and e-commerce, the brief said. The secretariat would also serve to "identify opportunities and public policy gaps in order to ensure Canada is positioned for leadership in the next stage in the evolution of the digital world." The association also said ensuring all Canadians have access to broadband Internet is imperative. The brief recommended the government consider "aggressive investment" to push broadband expansion in rural and remote areas. The group also recommended the government look at a new public-private partnership model for building 5G network corridors "to drive research, innovation and attracting (small and medium-sized enterprises) in developing globally competitive products and services." The Agence Interrégionale de développement des technologies de l'information et des télécommunications (AIDE-TEC)— a Quebec-based non-profit group focused on access for rural users — also recommended a CCA rate of 55 per cent, but for "all new costs created by continuous coverage on roads." In their written submission to the committee, AIDE-TEC also pushed for investments that would bolster the deployment of cellular service and mobile Internet. AIDE-TEC, whose co-ordinator André Nepton appeared before the committee via videoconference, made two recommendations to the committee, including expanding the infrastructure eligible for the Building Canada Fund so that it wasn't restricted to fixed broadband projects and could include a "component accepting cellular technology as strategic infrastructure for mobile and voice Internet." Increasing the federal share of funding to 50 per cent and reducing the municipal contribution was also recommended. "This expansion would respect the choice of technology by communities and promote the balance between supply and consumer demand for mobile services," the brief said. — With reporting by Charelle Evelyn at cevelyn@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Tax changes would spur telecom investment: industry groups

News | February 18, 2016

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us

Tax changes would spur telecom investment: industry groups

News | February 18, 2016

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Related Stories

CRTC announces changes to Broadband Fund

CRTC launches consult on providing more info to consumers shopping for internet services

Champagne announces launch of Canadian AI Safety Institute

Satellite is ‘here to stay’ as connectivity solution, industry players say

Reuse & Permissions

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us