Canada: Federal Budget Contains Initiatives For The Information And Communications Technologies (ICT) Sector

Last Updated: July 20 2009
Article by Hank Intven, Michèle Lefaivre, Patrick McCay and Lorne P. Salzman

Most Read Contributor in Canada, September 2018

In recognition of the role that ICT can play in improving Canada's productivity, the Conservative Government's 2009 federal budget (Budget 2009) includes several investment initiatives geared to the ICT sector. These include commitments to modernize electronic health records and develop broadband infrastructure in unserved Canadian communities. Budget 2009 also provides additional funding for innovation and Canadian media content, permits faster depreciation of hardware and software and decreases the general federal corporate income tax rate.

Enhanced Write-Off For Computer Hardware And System Software

Budget 2009 will increase the capital cost allowance (CCA) rate for computer hardware and systems software acquired between January 27, 2009 and February 1, 2011 from 50 per cent to 100 per cent. To be eligible for the accelerated CCA, the computer equipment and systems software must:

  • be situated in Canada;
  • be acquired for use in a business carried on in Canada or to earn income from property situated in Canada or for lease to a lessee who so uses the equipment or software; and
  • not have been used, or acquired for use, for any purpose before it is acquired by the taxpayer.

Geared toward stimulating investment in computers and enhancing Canadian productivity, this measure will temporarily allow companies to depreciate 100 per cent of the value of their eligible hardware and software purchases against their taxable income in one year.

While there is a significant cost to this tax incentive, the Information Technology Association of Canada (ITAC) predicts that the measure will have a nearly $700-million impact on the ICT marketplace over the next two years.

Additional Funding For Electronic Health Records

The government has earmarked $500 million in Budget 2009 for Canada Health Infoway toward its goal of providing 50 per cent of Canadians with an electronic health record by 2010. The funding will also be used to expedite the implementation of an electronic medical system for physicians, hospitals, community healthcare facilities, pharmacies and patients. The government predicts that this investment should help reduce waste and duplication within the health system.

Support For Innovation

Budget 2009 provides $200 million over two years to the Industrial Research Assistance Program (IRAP), which provides technical and business-oriented advice along with potential financial support to growth-oriented Canadian small and medium-sized enterprises. According to ITAC, IRAP funding for 2008 had been virtually exhausted by mid-year. Budget 2009's funding will allow the program to double its contributions to emerging knowledge-based companies.

The government has also committed an additional $750 million to the Canada Foundation for Innovation (CFI) for research infrastructure and $110 million to the Canada Space Agency to support the development of space robotics and other technologies.

Expansion Of Canada's Broadband Networks To Rural Communities

With a view to closing the gap in broadband access between urban and rural areas, the government has pledged $225 million to Industry Canada over three years to develop and implement a strategy on extending broadband infrastructure in unserved Canadian communities. Budget 2009 described this funding as an example of the government's commitment to encouraging the private development of rural broadband infrastructure.

Industry Canada has in the past been involved with similar programs. The National Satellite Initiative (NSI), launched in 2003 and delivered jointly with Infrastructure Canada and the Canadian Space Agency, made satellite capacity available for broadband services in northern and remote communities. The Broadband for Rural and Northern Development (BRAND) pilot program, launched in 2002, funded business plan development and implementation of community-based, private-sector-led initiatives to deploy broadband networks in communities unlikely to be served by market forces alone. Applicants were required to meet a number of guidelines, including open access requirements. In 2006, the Final Report of the Telecommunications Policy Review Panel recommended a program called U-CAN, which would employ least-cost subsidy auctions in areas where commercial operators are unlikely to provide service in order to complete the job begun by BRAND of providing ubiquitous broadband in Canada by 2010.

More Canadian Content

Budget 2009 commits $200 million over the next two years to the Canadian Television Fund. It also confirms funding of $28.6 million over the next two years to the Canada New Media Fund and $14.3 million thereafter. Administered by Telefilm Canada, the New Media Fund supports the creation and the distribution of interactive digital cultural content products.

After Budget 2009 came down, the Minister of Canadian Heritage announced plans to combine, reform and rebrand the Canadian Television Fund and Canada New Media Fund as the Canadian Media Fund, adding a further annual allocation of $20.4 million. The reformed and integrated fund is to be in place by April 1, 2010.

Reduction in the Corporate Income Tax Rate

Budget 2009 reaffirms the government's prior commitment to reduce the general federal corporate income tax rate from 22.12 per cent to 15 per cent by 2012. At that rate, Canada will have the lowest rate in the Group of Seven (G-7). The government expects this change will encourage new investment in Canada.

McCarthy Tétrault Notes:

Some critics contend that the measures implemented by Budget 2009 are insufficient in today's economic context. The Canadian Advanced Technology Alliance (CATA), composed of 33,000 industry members, estimates that at least $60 billion — almost double the $34 billion to be invested in Budget 2009 — needs to be spent on the ICT sector to match the intensity of the American response to the economic downturn, put forward by President Obama's new administration.

According to CATA, spending on job sectors employing high tech delivers fast growth, immediate employment, recession-resistance and improved productivity. Putting the infrastructure investment into knowledge-intensive services sector jobs will help Canada most, by driving job creation, exports and long term sustainable competitiveness. For these reasons, it is important that the government invest the necessary amounts in order to ensure the survival of the ICT sector and the strength of the Canadian economy.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions