Today the Government of Canada proposed a budget for the 2009-10 fiscal
year, and it doesn’t provide great news for the tech industry.
Minister Stephen Harper’s Conservatives only hold a minority of seats
in the House of Commons, and if the other parties vote against the
budget, then the government falls.
nutshell, the government plans to borrow money from your future to
stimulate the old economy. In the old economy, generally speaking,
people drive cars to a workplace and work an eight-hour shift. So this
makes cars, six-lane city roads, expressways and multiple overpasses a
Action plan, which includes a two-year $12 billion
infrastructure program (much of which would be on construction) is
perfectly understandable, given the pressure from union-dominated
opposition parties. Bridges need to be repaired and universities need
new buildings anyway, so, the line of thinking goes, why not get it
done as soon as we can and forget about balancing the budget?
not entirely bad news for the telecom and IT sectors. After all, it
does include $500 million to Canada Health Infoway to “encourage” more
use of electronic health records, and $225 million over three years to
“develop and implement a strategy on extending broadband coverage to
unserved communities.” It also budgets $50 million for the Institute
for Quantum Computing.
In addition, the construction projects
would have some spinoff effects. For example, work crews need a way of
communicating, and ruggedized two-way wireless handsets beat whistling
and yelling over the noise of heavy equipment.
government said today it is projected to spend some $80 billion more
than it collects over the next four years, which could bring the debt
to $542.4 billion, or about $16,000 for every man, woman and child.
This means down the road, the government will have to spend more on
interest, giving it less room to cut taxes and spend on other items.
best thing the federal government could do to help the telecom and IT
sectors would be to encourage companies to employ educated technology
workers in Canada and to reduce travel by having people work from home
and do video conferencing where possible.
But with an accumulated
debt of this year of $457 billion (not including unfunded
Canada Pension Plan and Old Age Security liabilities), the single
largest federal spending program is (and for more than a generation has
been) interest payments on the debt. Increasing the debt by $60
billion, while providing short-term relief, will tie one hand behind
all future finance ministers’ backs and leave little room for corporate
tax relief for the new economy.