Bookmark and ShareNews

Throne Speech: Canada is open for business

Wednesday, March 3rd, 2010 | 1:11 pm

GD Star Rating
loading...

Canwest News Service

OTTAWA — The federal government has pledged to open its doors to foreign ownership in the satellite and telecommunications sector, and keep taxes “competitive and low” in efforts to prepare Canada for the global economy in the post-crisis world, it said Wednesday in its Speech from the Throne.

There are also promises of launching a digital economy strategy, providing “enhanced support” for skills training, removing unnecessary regulation, and taking “further steps” to support the competitiveness of the country’s manufacturing sector.

This may signal the federal government is unlikely to pare corporate subsidies despite calls from some economists that it should instead rely on lower corporate taxes to support growth.

And in a sign that it’s serious about fiscal restraint, the Conservative government signalled it will introduce legislation that would freeze legislators’ salaries, while also freezing the budgets of government departments and ministers’ offices.

Roughly half of the speech, which kicks off the latest session of the economy, is dedicated to the economy. Even though a recovery is well under way, the government said, “It would be a mistake to declare the recession is completely behind us.”

Hence, “jobs and growth remain the top priority,” and the speech outlines some of the steps, in general terms, it is prepared to take to ensure the Canadian economy remains on solid ground in the face of growing global competition.

The Throne Speech often outlines in vague terms what the government would like to do in the current session, but does not indicate how or when it might fulfill the promise. It is read by the Governor-General, Michaëlle Jean.

Among the key measures, and perhaps its most controversial, is to “open Canada’s doors further to venture capital and to foreign investment in key sectors, including the satellite and telecommunications industries, giving Canadian firms access to the funds and expertise they need.”

Steps like that must be taken because “determined” new global competitors, especially emerging economies, have emerged. “To succeed in the global economy, Canada must keep step as the world races forward.”

How it plans to do this is unclear. But the government ignited a controversy late last year when it overruled the federal telecom regulator and allowed Globalive Wireless Management Corp. to enter Canada’s cellphone market. The Canadian Radio-television and Telecommunications Commission had ruled previously that it could not permit Globalive because an Egyptian company had too much control through debt and equity financing. The rules indicate that foreigners cannot control more than 46.7% of voting rights in a telecom concern.

A blue-chip panel recommended back in June of 2008 to liberalize the country’s foreign ownership rules as they govern the $30-billion-plus telecom sector. However, last week the opposition parties called for a debate on telecom ownership rules, arguing the Conservatives were trying to bypass the law.

Meanwhile, the speech hits on other economic themes it wants to tackle, with an eye on boosting the country’s abysmal productivity levels. They include:

• Provide enhanced support for skills, apprenticeships and training for Canadian workers.

• Launching a digital economy strategy to drive adoption of new technology.

• Keeping taxes low and competitive, while taking “aggressive steps” to close loopholes – such as aggressive tax-planning taking place in recent months by income trusts to avoid taxes once 2011 rolls around.

• And taking further steps to supportive the “competitiveness” of Canadian manufacturers, which could signal a further extension of a tax measure allowing for the quick writeoff of capital equipment. The Canadian Manufacturers and Exporters have called on the measure to be extended by another five years, to 2016.

More details about the government’s plans, as outlined in the throne speech, could be unveiled in Thursday’s budget.

Further, the government has committed to implementing its stimulus package through to March 31 of next year. But part of the path to balanced budget will mean allowing the stimulus measures to expire on that date, the government said in its speech.

As chair of the Group of Eight and Group of 20 this year, the government said it would “lead the call” for a globally co-ordinated approach to withdrawing stimulus, in an effort to ensure as smooth a recovery as possible.

Bookmark and Share

One Response to “Throne Speech: Canada is open for business”

  1. Joe says:
    GD Star Rating
    loading...

    “The federal government has pledged to open its doors to foreign ownership in the satellite and telecommunications sector”.. This sounds more like a breach in national security to me. Let us allow very large US corporations that have very close ties to the US government, which is currently in hot water for illegal wiretaps, to control our communications networks. That’s a brilliant idea.

    The NSA has access to all data that is passed through american owned networks and they actively monitor all of it. Let us take those network providers and allow them into our country so a foreign super power can have more access to us than our very own government.

    Way to go Harper!

    Please continue discussion on the forum: link