Recommended tax credit would help small
businesses invest in
technologies
By Bernard Courtois, President and CEO, ITAC (Information Technology
Association of Canada) Canada's economy is driven by small- and
medium-sized businesses. In fact, over 97 per cent of all Canadian
businesses are small. They are our economic engines, fuelling local
employment, investment and growth. And they are pillars on which our
future prosperity and well-being depends.
As important as small businesses are for Canada, information and
communications technologies, or ICTs, are important to them.
In October 2006, a study by IDC Canada found that most small- and
medium-sized business leaders believe that investing in ICTs is critical
to
their success. The problem is that most also feel compelled to focus their
investment dollars on other priorities.
There is a way forward. And an opportunity as federal Minister of Finance
Jim Flaherty prepares the Government of Canada's upcoming budget for 2007.
Last year, after consulting extensively with economists, industry experts,
entrepreneurs and citizens, the government-appointed Telecommunications
Policy Review Panel called for deregulation of Canada's competitive
telecom markets. The government is currently acting on those
recommendations.
The Panel also urged the federal government to take other measures to help
Canada's small- and medium-sized businesses. These include the
introduction of a special tax credit to encourage broader adoption of ICTs.
The tax credit would make it more affordable for small businesses to
invest in computers, communications equipment and software.
It would also apply to other related expenses, including training and
investments by small businesses to improve their networked capabilities,
from commercial web sites to advances in supply chain management,
procurement and online administration. And it would be fully refundable
when no tax is payable.
But it needs to be implemented.
As the Panel pointed out, Canadian businesses must increase their
investments in ICTs or the rising productivity gap between Canada and our
largest trading partner, the U.S., will only grow.
Boosting investments in ICTs would also help support the skills
development more and more small Canadian businesses need to succeed. And
it would improve overall competitiveness, both here at home and in the
global arena.
The federal government has seized on recommendations made by the
Telecommunications Policy Review Panel and is now moving forward with
important steps to deregulate the telecom industry.
By introducing a tax credit to encourage investment in ICTs, the
government would be acting on another recommendation by the Panel and
delivering further benefits to Canada's small businesses.
