Thank you very much, Mr. Chair.
Welcome to Prince Edward Island. It's a pleasure to be representing the Canadian Wireless Telecommunications Association today, which I'll refer to as the CWTA. The CWTA is the authority on wireless issues, developments and trends in Canada. We represent service providers, as well as companies that develop products and services for the wireless industry.
As the Government of Canada has highlighted in its national digital and data strategy consultations, the world is undergoing a digital and data-driven transformation. Digital technologies and the innovative use of data will drive national economies, increase the quality of their citizens' lives, and create well-paying jobs. The advanced wireless networks our members have built in each province and territory are key to delivering this future for Canadians. Our wireless networks offer fast and reliable mobile wireless connectivity. With the current generation of wireless technology, known as LTE or 4G, being available to approximately 99% of all Canadians, and offering the fastest average download speeds in the G7, and twice as fast as those in the U.S., Canada is truly a world leader in wireless.
This leadership cannot be taken for granted. We are at the cusp of the next mobile wireless revolution, the introduction of the next generation of wireless networks, referred to as 5G. It is revolutionary. It will not only enhance current uses of mobile communications but also pave the way for new digital and data-driven businesses and services. There are very few sectors of the Canadian economy that will not be transformed by the introduction of 5G wireless networks.
We recently partnered with Accenture to take a closer look at what 5G networks could mean for Canada's economy. In a report released this summer, Accenture estimated that the deployment of 5G networks will result in an incremental annual GDP contribution to the Canadian economy of $40 billion by the year 2026. By the same time, it will add close to 250,000 permanent jobs. These benefits are possible, but they are not guaranteed. The same Accenture study estimates that $26 billion in investment, primarily from Canada's facilities-based carriers, will be required between 2020 and 2026. This number does not include the amount that must be spent on spectrum necessary to deploy 5G. This is why our recommendations focus on driving and supporting investment.
While we have made a number of recommendations in the brief submitted to the committee in August, I would like to highlight two that will help Canada succeed amid a changing economic landscape. The first recommendation deals with the capital cost allowances. We recommend that the Government of Canada increase the capital cost allowance rates for classes of depreciable assets that relate to telecommunications equipment from 30% to 100%, a policy that has been successfully implemented in the United States already. This would stimulate new capital investment by service providers. In particular, we think it would help stimulate the massive investment needed to deploy 5G networks in Canada.
Studies by the Conference Board of Canada have shown that increasing the capital cost allowance would have a positive impact on telecommunications investments in our country. We would also respectfully point out that the House of Commons finance committee made a similar recommendation in its December 2016 report.
The second and final recommendation I'd like to highlight today deals with R and D tax credits, which we think would help sustain capital investments. Recent changes to the scientific research and experimental development program reduced the relevant tax credit rate from 20% to 15%. While there were some offsets to these reductions, with an increased emphasis on direct funding for R and D activities, we think that neutral tax credits are a better approach. Therefore, we recommend that these tax credits be reviewed, with an eye to restoring them.
We believe that implementing these two recommendations will further support the investments on which Canada's leadership in wireless networks depends. Our members are also at the forefront of this data and digital revolution. They are the architects of the basic infrastructure that will support Canada's innovation strategy and ensure that Canadians can adapt to a changing economic landscape and remain competitive across the country and the world.
Thank you very much for your time today.