CCI’s Federal Priorities for Fall 2024

By: Nick Schiavo, CCI Director of Federal Affairs

After a busy summer of government consultations and political pre-electioneering, the next four months are shaping up to be critical for Canada’s innovators. The political dynamics in Parliament are anything but stable right now, and now that the Liberal government has lost the reliable support of the NDP, an election could be triggered by any major vote in the House of Commons.

From our vantage point, the federal government still has time to make meaningful progress on several key issues for Canada’s innovation sector, and all parliamentarians have a role in ensuring our economy is strong and resilient.

Here’s what CCI is watching this fall in Ottawa:

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‍SR&ED Reform

The government has been promising to reform the Scientific Research and Experimental Development (SR&ED) tax credit for years, and earlier in 2024 the government concluded a second round of consultation on ways to improve this vital innovation funding mechanism.

Earlier this year, CCI released three reports to advise the government on their next steps regarding SR&ED reform. The first was on cost-neutral changes to SR&ED to ensure it better supports homegrown companies, with a second response to phase 2 of the SR&ED incentive consultation, the third report was on an innovation box regime.

CCI is closely monitoring the Fall Economic Statement for concrete steps on implementation. Given the importance of SR&ED to the innovation ecosystem, we expect action, not more delays.

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Procurement Reform

One of the highlights of the federal budget in April was a commitment to a legislated procurement target for small- and medium-sized enterprises. This is a good step, and in line with CCI’s own advocacy for how the government should reform procurement. Our detailed feedback this summer underscored the need for swift implementation.

This fall, CCI is hosting discussions about our latest policy report, Building Winners, which was released earlier this month. It is a follow-up report to Buying Ideas, which was released this spring.

Both reports underscore how domestic procurement is the most powerful tool for economic development at the government’s disposal, and Ottawa should move quickly to implement this legislation. Let’s hope we see some action on this file in the fall.

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Gains en capital

Over the summer, CCI’s pulse check of Canada’s tech sector found that 90% of tech leaders were concerned the governments changes to capital gains will have a negative impact on access to capital in Canada, with 67% of respondents saying that access to capital was their number one challenge and priority this year. This echoed what CCI heard in our multiple town halls in Toronto, Ottawa, Halifax, and virtually throughout the spring, as signatures climbed on our open letter, Prosperity For Every Generation.

The federal government made some minor tweaks to the Canadian Entrepreneurs Incentive (CEI) earlier this summer but we continue to find these changes insufficient in mitigating the damage of this innovation tax. A full repeal of the capital gains changes is necessary to ensure much-needed economic growth.
This fall, we’re tracking a study on the capital gains changes underway at the Finance Committee.

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Legislative Gridlock: AI, Cybersecurity, and Online Harms

Bill C-27 has had a long and winding road through Parliament. A version of the Artificial Intelligence and Data Act bill has been in Parliament since 2020 but was paused when Budget 2021 was introduced. It was reintroduced in 2022, and the legislative initiative has been the subject of 31 committee meetings throughout 2023 and 2024. Despite being a key part of the government's innovation strategy, without the support of the NDP, the fate of C-27 is uncertain.

We’re also uncertain about the future of Bill C-63, the government’s online harms legislation, as well as Bill C-26, which deals with cybersecurity and telecommunications. Bill C-72, introduced in June, is awaiting its second reading in the House; the Connected Care for Canadians Act would require health tech providers to ensure that the technology they license, sell, or provide as a service is interoperable.

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The Clock is Ticking

The leaders of Canada’s fastest-growing technology companies can’t afford legislative delays and half-measures. With an election potentially looming, the window for action is closing fast. CCI will continue to press for meaningful policy changes that support the growth of Canada’s innovation sector, but we need swift action from Parliament.

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To learn more about our vision for the months ahead regarding the federal budget, check out our 2025 Pre-Budget Submission.

Pour en savoir plus sur les activités fédérales de l'ICC, contactez Nicholas Schiavo à l'adresse suivante nschiavo@canadianinnovators.org.

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À propos du Conseil des innovateurs canadiens

Le Conseil des innovateurs canadiens est une organisation nationale basée sur ses membres qui remodèle la façon dont les gouvernements à travers le Canada pensent à la politique d'innovation, et qui soutient les entreprises d'envergure nationale pour stimuler la prospérité. Fondé en 2015, le CCI représente et travaille avec plus de 150 entreprises technologiques canadiennes à la croissance la plus rapide. Nos membres sont les chefs de la direction, les fondateurs et les cadres supérieurs qui sont à l'origine de certaines des entreprises à grande échelle les plus prospères du Canada. Tous nos membres sont des créateurs d'emplois et de richesses, des investisseurs, des philanthropes et des experts dans leurs domaines de la technologie de la santé, des technologies propres, de la fintech, de la cybersécurité, de l'IA et de la transformation numérique. Les entreprises de notre portefeuille sont leaders sur leur marché vertical, commercialisent leurs technologies dans plus de 190 pays et génèrent entre 10 et 750 millions de dollars de revenus annuels récurrents. Nous plaidons en leur nom pour des stratégies gouvernementales qui augmentent leur accès aux talents qualifiés, au capital stratégique et aux nouveaux clients, ainsi qu'à une liberté d'exploitation élargie pour leurs poursuites d'échelle à l'échelle mondiale.