CCI Response to the 2024 Federal Budget

Following the budget delivered by Finance Minister and Deputy Prime Minister Chrystia Freeland in Ottawa today, CCI President Benjamin Bergen issued the following statement:

"In today’s budget we see the government raising taxes on capital gains. Nearly a decade ago, we saw the federal government take similar action raising taxes on employee stock options under the guise of going after the very wealthy, without fully understanding the immense damage they risked doing to fledgling Canadian technology companies. We hope that the Minister Freeland and the Liberal government will listen to innovators and adjust this proposed tax hike before they do irreparable harm to the Canadian innovation economy.The fact of the matter is that the best way to boost revenue for the government is to drive economic growth and productivity gains, and the best possible way to do that is by championing the success of Canada’s homegrown innovators.

"In today’s document from Minister Freeland, we see encouraging announcements from the federal government which suggest that they understand that innovation and productivity growth are necessary for building future prosperity. If higher taxation bites highly-skilled workers before these measures are implemented, we risk a flight of talent to more competitive jurisdictions — the United States in particular.

"CCI has been calling 2024 the Year of Procurement, because now is the critical moment when governments must overhaul and modernize their technology procurement to drive efficiency and growth. Proposed legislation with procurement targets would be a positive step in the right direction, and a review of Canada’s defence procurement is also extremely welcome news.

"However, we have seen this government announce good intentions before, and we have been disappointed by the pace of delivery. Further review of the Scientific Research and Experimental Development tax credit — the linchpin of Canada’s innovation funding system — should proceed swiftly, and we look forward to the government bringing this over the line with the new funding announced today. At some point before too long, Canadians will go to the polls and judge this government not on its good intentions and future announcements. We will judge this government on the actual results they have driven for the Canadian economy."

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Nick Schiavo, CCI Director of Federal Affairs, also said:

"Taking tangible steps forward on open banking is welcome news. Canada has incredible financial innovators, and with the appropriate regulatory framework in place, the sky's the limit for improved financial services for citizens. The devil is in the details, but in today’s announcement we see a government tangibly moving forward with open banking, and that’s good news.

"The government’s announcement that businesses can immediately write off the full cost of investments in patents, data network infrastructure and other technology is something our members have called for and could act as a transitional measure to incentivize investments in intellectual property until the government’s patent box tax policy is up and running.  Renewing the mandate of the Innovation Asset Collective with new funding is a positive development as well.

"One measure that we hope to see swift action on is the government’s proposed Council on Science and Innovation. In today’s budget we’re seeing big intentions to modernize federal policy, and potentially embrace smart industrial policy. A council of experts, with leading voices from the private sector CEOS who are leading the charge to make Canada a more innovative place, would meaningfully help ensure success."

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Media Contact:
James McLeod
Director of Communications and Content
jmcleod@canadianinnovators.org

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About the Council of Canadian Innovators

The Council of Canadian Innovators is a national member-based organization reshaping how governments across Canada think about innovation policy, and supporting homegrown scale-ups to drive prosperity. Established in 2015, CCI represents and works with over 150 of Canada’s fastest-growing technology companies. Our members are the CEOs, founders, and top senior executives behind some of Canada’s most successful ‘scale-up’ companies. All our members are job and wealth creators, investors, philanthropists, and experts in their fields of healthtech, cleantech, fintech, cybersecurity, AI and digital transformation. Companies in our portfolio are market leaders in their verticals, commercialize their technologies in over 190 countries, and generate between $10M-$750M in annual recurring revenue. We advocate on their behalf for government strategies that increase their access to skilled talent, strategic capital, and new customers, as well as expanded freedom to operate for their global pursuits of scale.

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