Budget gets mixed reviews from IT associations

The new Ontario provincial budget came down Tuesday, and its contents have various IT associations weighing in on what it means for Canadian IT, innovation and that pesky skills shortage.

Information Technology Association of Canada president and CEO Bernard Courtois said that the budget was similar in content to many recent provincial budgets and the national budget. Said Courtois: “They’re being prudent, as there’s not as much money.” But when it comes to the IT industry, the budget wasn’t surprising for Courtois, due to the recent announcement of the $1.15-billion earmarked for the Next Generation of Jobs Fund geared toward green, biology, new media and ICT projects.

Greg Lane, vice-president of the Canadian Information Processing Society (CIPS), found that the tone of the budget was weighted toward more pessimism than optimism. It included, for example, $355-million over three years for a Second Career Strategy that, said the government release, is intended to “help 20,000 unemployed workers make the transition to new careers and well-paying jobs in growing areas of the economy.” The release then cites the example of a manufacturing worker moving to a skilled-trades job.

Said Lane: “Why not get people into the IT field? It’s a growth industry with lots of jobs and that pays well. It’s rather doom-and-gloom of them to concentrate on the manufacturing industry problems when there’s good news (about the IT industry). That way, people could see that and equip themselves.”

Federal budget coverage in ComputerWorld Canada

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Barry Gander, executive director with the Canadian Advanced Technology Alliance, said that attention should be moving more toward the service industry, which includes the IT sector. He said, “In the future, we would like to see special recognition given for the fact that we live in a services economy, which is dominated by the growth in our high-tech sector. Services are responsible for 70 per cent of our GDP and 76 per cent of our employment. By focusing our attention on the service sector, Ontario can once again join the competitive upper ranks of its North American competitors such as New York and Massachusetts.”

Getting people into the lucrative services market (and away from manufacturing) was a key theme in the budget. The $1.5-billion for a three-year Skills to Jobs Action Plan is designed , according to the government release, “get more Ontarians into well-paying jobs and into long-term training for new job opportunities.”

Here Lane was concerned with a lack of clarity, because the budget didn’t put forward, enough specifics about how to recruit people into these new careers—and possibly tech.

“We looked to see more focus, to build a profile for the individuals who might do this,” Lane said. “One challenge, for instance, is the lower participation of women in IT, so we’d want them to be more specific about the Jobs Action Plan,” he said.

And it might be easier said than done, especially when it comes to IT. “Trying to re-skill people is a good idea,” Lane said. “There’s going to be a significant shortage over the next few years of 15 to 20 per cent, so if there’s 600,000 IT professionals in Canada, that’s a shortage of 90,000 people.”

Re-training people, however, can only go so far. Lane said, “It depends where they come from. IT people need a balance of understanding the business drivers, and the technology.”

”If you’re retraining people in forestry, you’re not retraining them to become computer scientists,” Courtois said.“You just can’t. You can train them for management, logistics, or sales in ICT, but you can’t transform people to become a geek or an advanced technology person. But it will help with other jobs in the industry…In won’t make a big difference in the IT industry’s skills shortage, but it will help the economy around it.”

The budget also missed an opportunity by not backing more innovative ideas, said Lane. “They’re just responding to the challenges they’ve had in the manufacturing industry. They’re dealing with problems instead of finding real opportunities to really focus on innovation and being a world leader. The tone of the budget doesn’t reflect that,” he said.

More tax coverage from ComputerWorld Canada

Tax cuts might affect IT spending—or might not

Courtois, however, said that the offering of a 10-year Ontario income tax exemption for new corporations that commercialize intellectual property developed by qualifying Canadian universities, colleges, or research institutes was a positive step toward fostering innovation in Ontario. He said, “Technology start-ups take a while to be profitable, so a 10-year tax holiday (would definitely attract people to Ontario), especially as the ideas can be carried out at any of the qualified universities in Canada—they just have to be commercialized in Ontario.”

Gander said that there were some other taxes CATA would like to see for Ontario businesses.

“If we had one area where we think Ontario could be working harder, it would be in the field of business taxation,” Gander said. “We are disappointed that the new budget did not include corporate tax reduction, and a Value Added Tax (VAT) system. Ontario needs to work harder on lowering its tax regime, especially for new business investment, in order to stimulate business spending; this move could actually increase government revenues over the longer term.”

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