IT professionals say deep tax cuts needed to stimulate ICT sector

The Canadian Information Processing Society (CIPS) is calling on Ottawa to eliminate income tax for information and communication technologies (ICT) workers as well as taxes on technology sold in Canada in an effort to stimulate the ICT sector and kick-start a national ICT strategy. Greg Lane says there’s need for an ICT strategy that marries the talents of academia, industry, and government. The federal government therefore needs to come up with incentives, such as freeing ICT workers from income tax burdens and removing taxes on technology, he notes. “I think what’s missing from my perspective at least, is an intelligent thoughtful ICT strategy for all three of the constituents—a comprehensive holistic ICT strategy, one that says ‘we have been a leader and then we lost our way, and in order to be successful, we have to do complementary and intelligent things together,’” says Lane in an interview with Tech Media Reports. In terms of eliminating income tax for ICT professionals, Lane says the move makes sense because there’s a mass exodus of experienced workers to greener pastures in the U.S. and elsewhere with detrimental effects on the sector in the long run. Lane acknowledges that luring back workers who have left the country won’t be easy, hence the need for incentives. “All countries are competing for talent and I don’t think Canada is doing enough to compete for home talent, let alone other people’s talent, in terms of bringing them into the country.” While income tax elimination may sound unrealistic, Lane says other countries have taken this approach and seen success. “Part of the reason that Ireland became the Celtic Tiger, was they eliminated taxes on jobs they wanted to see there,” he said. As well, Lane says eliminating tax on technology will encourage buying. The more people buy technology, the more it will get into people’s hands, resulting in more jobs in the sector. The jobs, he says, are engines of economic growth in the economy, resulting in a multiplier effect. That growth will also spur interest in young people to view ICT as a career option, something which is currently not happening because of the downturn in the ICT sector. Lane says he’s not made a formal proposal to the federal government about eliminating income tax for ICT workers and removing taxes on technology. Rather, he says his aim is to stimulate debate on what he describes as a deplorable situation in Canada’s ICT industry. Lane also says he’s appalled by the lack of commitment to a coherent strategy among the political parties. During the elections last year, the Mississauga-based CIPS, which represents ICT professionals, asked all the major federal political parties about their plans for an ICT strategy. Only the Green Party responded. Calls for a national ICT/digital strategy have of late been on the rise and CIPS is the latest organization to join the fray. In June, industry players came together to brainstorm on a possible strategy at the Stratford Institute in Waterloo Region. On June 22, Industry minister Tony Clement held a major conference in Ottawa that brought together key leaders in the industry. Clement promised that Canadians will start to see portions of a national strategy in the fall. Lane insists action can be taken even sooner, stressing that the government has several levers at its disposal—such as previous frameworks for spurring growth in the ICT sector—to make things happen. “There are a number of associations that for some time have said there are real challenges here. You don’t need to have another meeting to discuss what the issues are. I mean, read the newspapers, Nortel is gone. What are you doing about it?” he asked.

IT professionals say deep tax cuts needed to stimulate ICT sector

Broadcast | August 5, 2009

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