What the Federal Spring Legislative Session Meant for Innovators

By: Nick Schiavo, CCI Director of Federal Affairs, and
‍Michelle Ehinlaiye, CCI Federal Affairs Coordinator

After six months of sitting, the House of Commons has wrapped for the summer recess. Leading up to June 19, the government was racing against time to pass critical legislation before the break. But with significant developments possible in July, and a lot of files left hanging, it doesn’t feel much like the beginning of summer vacation.

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Capital Gains

The changes to the capital gains inclusion rate announced in Budget 2024 were by far the most significant item for innovators in the spring legislative session. Just before Parliament recessed for the summer, Finance Minister Chrystia Freeland introduced a significant motion to move forward with the changes.

Full details of the legislation and the new Canadian Entrepreneurs' Incentive are anticipated in the coming months, as early as July. There is potential for MPs to be recalled for debate over the summer, so we’re staying close to keep you updated on any new developments. Even though the legislation is still being drafted, the proposed changes will come into effect on June 25. You can read our statement from CCI President Benjamin Bergen on the latest developments.

Notably, the Conservative Party voted against the government’s motion, ruling out any chance of an expedited legislative process through all-party unanimous consent. This ensures that the proposed changes will undergo thorough scrutiny through the traditional legislative process, including a dedicated study on capital gains that has already begun at the Finance Committee.

While capital gains has pulled focus since April, there were a number of announcements in Budget 2024 that could be great for innovators, including on artificial intelligence, IP and the Innovation Asset Collective, procurement, SR&ED and more. You can review our full statement on the federal budget here to learn more.

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Other Items for Innovators

Bill C-26, which deals with cybersecurity and telecommunications issues, made some progress earlier this month, finally getting passed on the last sitting day of the House of Commons. The bill introduces a new law called Critical Cyber Systems Protection Act, that is meant to help secure Canada’s critical infrastructure. The Senate will still need to pass the bill before it becomes law.

Bill C-27, which deals with data privacy and artificial intelligence regulation, wasn’t quite so lucky. Aversion of this bill has been kicking around parliament since 2020 but died on the order paper when the 2021 budget was called. It was re-introduced in 2022 and has occupied 31 committee meetings so far in 2023 and 2024. Despite being a cornerstone of the government’s innovation strategy, C-27 doesn’t appear to be going anywhere anytime soon.

‍Bill C-63, the government’s online harms bill was designed to create a baseline standard for online platforms to keep Canadians safe, namely by holding online platforms accountable for their content. The Online Harms Act places a particular focus on protecting kids, removing violent and sexually-explicit material and further combatting terrorism online. The bill remains stuck in the House at second reading.

‍Bill C-69, the Budget Implementation Act 2024 has now cleared Parliament and received Royal Assent. Capital gains has eaten up much of the focus in the past few months, but when the budget was delivered in April, we were impressed by a number of encouraging items, including proposed legislation for procurement targets, renewed funding for the Innovation Asset Collective, and a new Council on Science and Innovation. We’ll need to track implementation after the budget is finally passed.

Bill C-72 was a late addition, introduced in early June and still awaiting second reading in the House of Commons. If passed, the Connected Care for Canadians Act will compel healthtech providers to ensure that information tech they license, sell or supply as a service is interoperable. This means that patients and health-care providers would be able to securely access the data and exchange it with other systems — for example, those being used in another hospital or jurisdiction. I’d love to hear from you if you have any concerns or ideas on how the government should execute healthcare modernization.

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Winners, Losers and Other Legislative Priorities

The government was also keen to see Bill C-59, which fully implements the Fall Economic Statement and Budget 2023, finally pass the Senate and become law on the last sitting day of the spring session. This is undoubtedly a win for the consumer-driven banking framework and much needed reforms to Canada’s competition laws. Despite passing, the delayed nature of the bill does not bode well for the Liberal government’s reputation for being unable to get things done. 

In recent weeks, Parliament has been intensely focused on the recent findings of foreign election interference reported by the National Security and Intelligence Committee of Parliamentarians. In response, MPs united to pass Bill C-70, An Act Respecting Countering Foreign Interference, at the last possible moment earlier this week. This bill introduces new criminal charges and requirements for parties engaging in elections and grants additional powers to Canadian security agencies to curb foreign meddling.

While the Liberal government did squeak out some wins by passing Bill C-50, their Sustainable Jobs Act, and C-58, a bill aimed at banning replacement workers, elsewhere they haven’t been as lucky. The fate of legislation like Bill C-71, the government’s "lost citizenship" legislation, and Bill C-49 which focuses on regulating offshore wind energy on the East Coast, remain uncertain.

To learn more about CCI's federal work, get in touch with Nicholas Schiavo at nschiavo@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 health tech, 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.