Thank you, Mr. Chairman, and thank you, ladies and gentlemen, for inviting me to appear today.
As stated, my name is Robert Watson. I'm the CEO of Canada's national Information communications technology business association, the Information Technology Association of Canada, ITAC. ITAC has over 330 member companies that represent a full spectrum of the ICT industry. We have large, medium-sized, and small companies that do everything from cloud and computing applications, to hardware and cybersecurity. The ICT sector generates over one million jobs directly and indirectly, and it invests over $4.9 billion annually in R and D.
Today, I will be briefly setting out our seven recommendations for the 2017 budget. They are categorized under the four themes of digital government, digital economy, talent and skills development, and trade and competitiveness.
Under the theme of digital government, ITAC has long been an advocate for improving Canada's procurement policies in order to deliver the best services to Canadians through cutting-edge digital solutions. We also know that a sound procurement policy allows successful access to companies of all sizes, and it presents the most innovative solutions to the government's challenges.
Our first recommendation to this committee is to create digital services Canada. The governments of the United States, the United Kingdom, South Australia, and others have realized the benefits that a central authority over digital service delivery can afford to their citizens. These governments have created digital services to maximize efficiency, save taxpayer dollars, and reduce wasteful duplication. By contrast, Canada continues to use a decentralized approach to delivering digital services to Canadians. A decentralized approach makes it difficult for industry to present fresh ideas and offer improved ways of delivering services digitally to Canadians. This in turn leads to less choice and higher prices for everybody.
Creating digital services Canada would be a legacy item for the Prime Minster and his government, while echoing his message from the World Economic Forum that Canada has a knowledge-based economy built on the foundation of a digital revolution.
Forging successful digital services in Canada will require gaining insight from those who have experience with digital services in other countries. This isn't a standard consultation, but rather a collaborative process whereby the government can seek assistance from people who have built digital services for President Obama and others. This is why ITAC recommends a creation of a digital leadership advisory council composed of academic, government, and industry experts. This council would discuss the mandate priorities for digital services Canada, identify major projects, and set a clear path forward.
Under the theme of digital economy, it is important to recognize that Canada has some of the most challenging geography on the planet in which to deploy digital infrastructure. As a former CEO of SaskTel, I know this all too well. As a result of these challenges, Canada has fostered some of the most innovative telecommunications companies in the world. This network infrastructure is the interactive backbone that supports and connects all sectors of the economy while delivering social benefits such as e-leaning and telehealth. Without this infrastructure, this would simply mean no modern economy in Canada.
The second recommendation we have is to change the capital cost allowance rate to incent companies to deploy digital infrastructure. The government clearly understands the linkage between technology investment and productivity growth. This idea underpins the 2007 introduction of an accelerated capital cost allowance to encourage investment in machinery and equipment to use in manufacturing.
Our second recommendation uses the same logic that applies to all participants in the economy seeking to boost productivity and spur innovation growth through the broader adoption of technology. Capital cost allowance generally favours adoption of information and communications technology. ICT is spread across a broad swath of investment classes, and understanding allowance for a full package of ICT tools from service to applications can be challenging, particularly for small businesses. Rationalization in the standardization of a CCA for ICT classes of assets would help encourage technology adaptation.
ITAC recommends that the government standardize and increase its CCA from the current rate to 50% for ICT classes of assets, including those that relate to communication, networks, equipment, and broadband networks. This will accelerate the rate at which the private sectors invest in digital delivery structure and fuel the Canadian economy.
Next is recommendation number three, develop partnerships, funding vehicles, and policy initiatives to enable 5G technology. The next generation of 5G technology offers transformational opportunities for Canada. And 5G will propel research, power smart cities, produce immense quantities of open data, and usher in a new wave of telecommunications expertise. As other countries begin testing technology to enable 5G, Canada has an opportunity to become a world leader and develop the best 5G company research assistant talent in the world. It is not often we can foresee a disruptive technology coming, but we do know 5G is coming, and the question is whether we will be prepared to seize on the opportunity.
Therefore, ITAC recommends that the government seek out industry and government partners in order to develop talent, funding vehicles, and policies necessary to enable 5G in Canada.
Next is recommendation number four, fund telehealth services in both urban and remote communities. One of the most transformative ways in which technology can impact our community is through telehealth. Telehealth benefits urban Canadians by offering a convenient and efficient alternative to traditional touch-points with medical practitioners. Telehealth is particularly important for Canadians who are using home care or have mobility challenges. For Canadians who live in rural or remote communities, including first nations and indigenous populations, telehealth bridges an important gap and brings medical practitioners into unserviced areas. Telehealth also presents a huge opportunity to the mental health area where many communities are critically underserved.
Therefore, ITAC recommends an investment of $30 million over three years to the Canada Health Infoway to ensure that telehealth delivers preventive and therapeutic benefits to Canadians in all communities.
Next is talent. Switching gears, I'm sure many of you are aware that Canada faces a significant rate of youth unemployment, which according to Statistics Canada has not yet rebounded from the 2008 recession levels. Shockingly, at the same time, the technology sector has a growing skills gap with over 200,000 vacancies expected by 2020.
ITAC would like to recommend some concrete measures that would see Canadian youth fill the skills gap and use their innovative ideas to power a modern economy.
Next is talent recommendation. Fund CareerMash and get more high school students ready for technology jobs. Digital skills are vital for everyone's lives. It is estimated that around 90% of all jobs over the next 20 years will require some level of digital skills so we need to make sure they are at the heart of our education system.