Tie tax change to rural broadband: finance committee

A House of Commons committee has recommended that if changes to the tax structure for telecom expenses are implemented in next year’s budget, they be tied to rural broadband investment. In a report tabled in Parliament Dec. 7, the standing committee on finance set out 81 recommendations stemming from its pre-budget consultations. Included in that list was that government “prioritize measures in relation to strategic green, social and core infrastructure that have a direct and measurable impact on the Canadian economy, and that attract or facilitate foreign investment and trade.” Those measures include “working with telecommunication companies that agree to participate in a rural broadband program that would be funded through changes to the capital cost allowance rates for classes 8, 42 and 46, which address communications networks equipment, including broadband networks,” as well as “working to develop a support program for cellular coverage (mobile Internet) for regions that are not served or are underserved.” Accelerating the rate of depreciation for equipment was a common thread for companies, associations and groups that participated in the consultation, including the Canadian Wireless Telecommunications Association (CWTA). CWTA regulatory affairs and government relations director Kurt Eby, who appeared before the committee in October, said in a phone interview he was excited to see the committee’s consideration of the capital cost allowance change, but expressed concern over how equitably it would apply. “All companies are investing in rural, but we have companies as members like Videotron, like Eastlink, like Freedom Mobile, they’re still trying to build out their network and their LTE network in urban areas as well, and to make sure they can compete in all areas,” Eby said. “They would really benefit from an accelerated capital cost allowance across the board, as would all companies because the explosion of mobile data use is in urban areas.” He also noted that the committee is referring to the change as a way to generate revenue. “It’s a change in the tax code that incents investment,” Eby said. “It doesn’t really create funding.”

Tie tax change to rural broadband: finance committee

Brief | December 14, 2016

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Tie tax change to rural broadband: finance committee

Brief | December 14, 2016

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