Tech industry calls for $60-billion stimulus
December 12, 2008

Canada's tech sector is calling on Ottawa to create a $60-billion infrastructure stimulus package to kick-start the economy and create jobs.

Thursday morning the Canadian Advanced Technology Alliance (CATA) – an industry group representing about 33,000 technology companies – announced they were lobbying the federal government to create an infrastructure stimulus fund that mirrors the $500-billion (U.S.) plan laid out by the incoming administration of U.S. president-elect Barack Obama.

“Our view is that ... the government's legitimate role in this cycle we're in is to try and offset the downturn through expenditures,” CATA president John Reid said in an interview.

“We do accept the fact that we will have to go into deficit in order to do this. That's just a position we have. Our belief is that, not only in Canada but across the world, there will have to be these ... expenditures to balance the cycle a bit.”

In this 2002 file photo, Darren Sherrington of Cygnal Technologies rolls out a fiber-optic cable for Telecom Ottawa Ltd.'s network expansion. (Dave Chan for The Globe and Mail)

The group argues that the $60-billion (Canadian) price tag is consistent with suggestions from some economists who encourage the United States to spend up to 4 per cent of the gross national product – about $600-billion (U.S.) – on infrastructure projects.

“In proportion, Canada should be prepared to spend $60-billion,” Mr. Reid said. “There comes a time when Canadian professionals should acknowledge the blindingly obvious: Our neighbour's ship is sinking and we're tied alongside.”

CATA wants the government to spend the money on roads, bridges, mass transit, green technologies and information and communication technologies, arguing that an “infrastructure for the future” is the best way to apply a stimulus package, boost spending and create jobs.

But it's not a bailout, Mr. Reid said. Rather, the government should take this opportunity to invest in new industries such as green energy and other technology-based infrastructure.

“I can understand some of this will be seen as a bailout, but I like to see it more as buffering a transition,” he said.

“Canadians think of infrastructure in terms of roads and highways and traditional upgrades. That also has to take place, but what we wanted to put forward is ... building new industries in Canada ... if we improve our broadband networks, if we encourage more companies to create energy-saving technologies, then when we get through the cycle we'll be left with an economic structure that really is more advanced and you get a better return on investments.”

CATA spoke with both the governing Conservatives as well as members of the opposition Liberals in Ottawa before drafting the release, which MPs received a copy of this morning.

“There's been so much political mish mash in Canada that we wanted to be very clear on a statement of where we think we should be going and show some leadership and focusing on keeping the economy working and keeping people employed,” Mr. Reid said.

Earlier this week, Mr. Obama announced an ambitious government spending planned to help rescue the flagging American economy, even if it means pushing the nation further into debt.

"We've got to provide a blood infusion to the patient right now to make sure that the patient is stabilized," Mr. Obama said on NBC's Meet the Press over the weekend. "And that means that we can't worry short term about the deficit. We've got to make sure that the economic stimulus plan is large enough to get the economy moving."