Although the federal government’s most recent budget called for spending on research, security and international aid, it offered little money for national high-speed Internet connections, and the feds’ move away from this promise made years before has at least one group concerned.
In response to the budget speech by the Minister of Finance Paul Martin on Dec. 10, the Canadian Advanced Technology Alliance’s (CATA) senior advocate of public policy, Barry Gander, said the group offers only “restrained applause” for the budget.
Martin called for spending on security in light of the so-called war on terrorism currently raging. Specifically, he announced $1.6 billion over the next five years for policing, $1 billion for screening entrants to the country and $2.2 billion for air security.
The budget ignored CATA’s request to connect Canada with a national high-speed, broadband network, essentially shoving the start date for this project back to 2004 – the date when it was supposed to be complete.
The federal government had promised it would build a national high-speed network during the election campaign of 2000.
Gander said the government was “going in the right direction,” but added: “we’re not there yet.”
Before the budget was released, CATA was looking forward to seeing the government put money where its mouth was. CATA said $10 billion should be spent on security, infrastructure and projects like the government’s own national broadband initiative, which is supposed to link every Canadian community via high-speed Internet by 2004.
CATA had hoped the government would purchase the telecommunications equipment required to make this initiative a reality. But the budget largely ignored the broadband promise.
Gander said CATA is “disappointed” that the government put no funds into this project, but the group is happy that the budget addresses spending needs in other areas like security and as far as CATA is concerned any kind of spending means spending on high-tech.
“There’s almost no job you can do today that’s not a high-technology, knowledge-economy kind of job,” Gander said. “Whether you’re spending it on putting GPS systems in fishing boats, or spending it on smart systems for pipeline drilling, it’s always in some way going to be a high-tech proposition.
“We’re not just talking about the advanced technology sector per se. We think it should be across the environment, across roads, across social infrastructures and so on.”
Nonetheless, Peter Sephton, a professor of economics at the Queens School of Business in Kingston, Ont., said “warning signals” should go off when groups representing particular sectors call for economic stimulation. He’s worried that CATA’s suggestion would direct the government to spend in the high-tech sector alone. And as far as Sephton is concerned, if the government plans to spend any money, it should be on tax incentives and other avenues for a thriving free market.
“The government isn’t always the best decision maker when it comes to pumping money into specific sectors. What they really should be doing is creating an environment that’s conducive to the private sector and private enterprise.”
That means cutting capital gains taxes and other barriers for businesses, he said.
Professor of economics Allan Warrack at the University of Alberta in Edmonton agreed that perhaps the government’s approach to stimulating economic growth should be altered. He suggested that the government should consider both the financial and social climate of the country when deciding where to spend.
“Short-term economic growth depends on financial investment. But longer-term growth depends on both financial investment and social infrastructure investment.”
To that end, the professor said the government should spend on simple infrastructure, like roadwork, public transit, even arts and culture before tackling high-tech projects.
The feds promised $2 billion for “strategic projects” such as roads, but made no mention of funds for arts and culture in a summary of the budget’s highlights.
As for Sephton’s concern for the free market, the government said it would defer corporate income tax payments for small businesses.
The budget did not completely ignore high-tech spending. If offered $1.1 billion for “skills, learning and research,” such as funds for the National Research Council, the Engineering Research Council, SchoolNet and CA*net 4, Canarie’s next-gen Internet infrastructure.
Gander said CATA is also pleased to know that the government will likely revisit the budget when the economy enters an upturn. Perhaps the feds will then spend money on telecommunications infrastructure to ensure the broadband initiative’s completion, he said.
As far as this group is concerned, it’s not a question of whether the government has the money to push this initiative forward. “It’s a matter of political will to put it into place,” Gander said.