In this regard, it is important not to walk away from a focus on the technologies and solutions that has enabled Canada to become a dominate natural resource nation. Exporting commodities will be one of the keys to our economic success, including the innovative and exportable technologies that make us a resource leader.
We can devote infrastructure funds to pay our citizens to build and repair our infrastructure. Direct government spending on roads, bridges, mass transit, green technologies, information and communications technologies, and an infrastructure for the future, is the most effective way to apply a stimulus package. This kind of direct spending keeps money in Canada.
Alternatives like tax cuts won’t work as effectively because they tend to be one-time shots that people use to pay off debts, rather than buy goods and services. Even when the rebates are spent on goods and services, they cannot come close to generating as many jobs as government spending on infrastructure.
Big deficit now or enormous deficit later
If we don’t spend now, we will in fact have huge budget deficits in the future, as our economy keeps running down. If we do nothing, taxation will not keep up with spending, and we bleed away our future a year at a time over decades.
If the economy keeps shrinking, fiscal conservatism will drive us into a total tailspin. The new Liberal government has understood this dynamic. Government spending will push the economy to fuller capacity and will in fact eliminate future deficits.
We can’t save our way to a solution. If we don’t have a meaningful stimulus package of at least four percent of national product, we will be in a deficit position for generations.
Canada should be prepared for a bold increase in operating and capital expenditures. We need to anticipate; to skate to where the puck will be, instead of where it is now.
And we need to spend on and for the future!
The spending needs to be on the assets that will have the most to do with our global competitiveness five to ten years down the line. We can demonstrate that putting the infrastructure investment into our innovation industries will help Canada most, by driving job creation, exports and long term sustainable competitiveness for Canada, the high tech sector is the best place to invest.
While we need to support our provinces and municipalities, we need to give direction about what to spend on. A city could spend billions on a mass transit system, for example, when the problem can be solved quite environmentally by having more knowledge workers work at home -- where they are 20% more productive.
Ten reasons why spending on our innovation industries is Canada’s best bet:
More than two-thirds of a high tech company’s cash flow is devoted to payroll. Few other sectors can show that ratio of money going to job creation.
Some 35% of that payroll amount goes straight back to the government on an operating basis in the form of source deductions such as PST, GST, HST, “so they will get most of it back anyway!”
Half of the revenue for the innovation sectors comes from outside Canada and represents net new money being pumped into the Canadian economy, “the best kind!”
Both our manufacturing sector and our resources sector are overly dependent on the ebbs and flows of the US
The tech sector has an extremely low carbon footprint – modern software companies are probably some of the best in the world - with no manufacturing, no shipping, no packaging, and very few physical resources required. It is a sustainable industry, relatively more dependent on human brainpower than natural resources.
High tech employs a high ratio of immigrant workers: “A huge problem for Canada is putting new Canadians to work because legal, medical, accounting designations are often not recognized here. Tech skills are almost 100% transferable, so companies are able to hire people from all over the world.
High tech is also a safe industry, with very few work-related and health hazards.
It's an industry that rewards creativity, analytic capabilities, and innovation in general, “admirable human qualities that should be fostered.”
The industry supports University and College grads, thus supporting higher ed. in general.
It is transformative in nature, whereby the innovations of today are the foundations of the future.
There are five areas of innovation infrastructure spending that would put Canada into the foremost ranks of the “ Competitive Innovation Nations” -- a consistent CATA drive outlined in its mission and mandate as Canada’s One Voice for Innovation Lobby Group.
The Service Sector
- Support the continuing transformation of our economy from a manufacturing focus to a service sector focus, which has grown to encompass 75% of our economy -- a fact known to everyone but the government
- In sectors like automotive concentrate on making Canada the leader in the ‘next big thing’: developing the services and technologies for the “last frontier of ICT” -- plugging the vehicle into the global communications network, to integrate them into our digital lifestyle. This will spread the opportunity for participation in the automotive sector across the nation, to software firms in every city.
- ICT should be used to promote Canadian super-clusters of expertise, the new “silos” of industrial power. Globalization has made the development of specialty business “silo clusters” very difficult. Support for specific companies such as RIM and Nortel, the core of our telecom cluster, would help sustain a jewel. You can trace the lineage of hundreds of companies to Nortel/BNR; when that kind of a base is lost, the country’s ability to develop supply chains and other “surround” industries is gone for good.
- Tax Measures should be adjusted to the needs of the service economy. In addition to continuing refinement our Canada’s research tax credits, a “Go To Market” tax credit should be issued to any company that has formally filed SRED and has proof of a finished commercial project: “We finance R&D in this country, but we ignore marketing, which is our number one issue. What we can’t do is paint the house and patch the foundation so we all feel better. That would waste what could otherwise be an opportunity.”
- Projects like pervasive and cheap high speed internet should be a major priority.
- Canada should become the number one country in the world in theadoption of broadband technology. This is consistent with U.S. policies on broadband leadership and net neutrality to help support the industries of the future.
- Aerospace is a proving ground for communications technologies. In addition to continuing to support the large projects that are on the drawing-boards, support should be given to public-private funding for “micro-projects”.
Public Safety and Cybersecurity
the Cyber Security Market alone is projected at more than $170 Billion by 2020; we should invest in, develop and showcase Canadian innovation, expertise and thought leadership in this key global sector
equally important are investments in the technologies and the showcasing solutions that support Canada’s public safety providers, including first responders, emergency management offices, public safety agencies, hospitals, port and border services, utilities, and many others who play a crucial role in keeping Canada safe.
- Canada can take a lead in the adoption of energy-saving practices, using ICT to monitor, control and optimize the use of energy.
- Canada can also lead in the drive to save energy in the ICT environment itself, through projects that concentrate on “Green Data Centres’ and ‘Green Computing’.
- Use ICT to make all public buildings more efficient, and use public-private partners to spread proven practices into the marketplace.
– Concentrate especially on services and technologies that provide preventative measures instead of dealing with a response to illness, plus basic wellness;
– Provide electronic records that connect communicate between doctors, hospitals and health care organizations.
All five areas require additional spending on education and human resources transformation, to end the mismatching of job skills and the requirements of the marketplace.
We urgently need to do two things. First, get measures underway now, today to set aside a very big, 4 percent of GDP infrastructure fund. Second, use leadership to set out the national priorities for spending -- spending that goes to productivity-enhancing,future-oriented infrastructure. We don’t need a national debate, or the usual Canadian handwringing. The trends are obvious about where we should be spending. Let’s get on with the job.