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MOVERS AND SHAPERS OF BUSINESS AND TECHNOLOGY POLICY IN OTTAWA IN 2021.
Helping Canada recover from the COVID-19 pandemic is the federal government's main economic task this year, but the Liberals must also implement big promises they've made to support workers and cleantech firms, as well as pledges to regulate privacy, broadcasting and telecoms. Along with Innovation Minister Navdeep Bains — who's entering his sixth year with the portfolio — here are the cabinet members, public servants and regulators who will shape key business and technology programs and policy this year.
Chrystia Freeland Minister of Finance, Michael Sabia Deputy Minister of Finance
The top two at the finance department are easy picks in any year, but they face a particularly busy 2021. In November, the Liberals' Fall Economic Statement (FES) set aside up to $100 billion for stimulus spending over the next three fiscal years; Freeland and Sabia, appointed in August and December, respectively, must now draft a plan to spend it.
With a $381.6-billion deficit projected for the current fiscal year, the Liberals have stressed that their expenditures are economically necessary and well designed. “Targeted, carefully thoughtout investment — on a meaningful scale — is how we will climb out of the coronavirus recession most quickly, and most effectively,” Freeland said in a speech at the Toronto Global Forum in October 2020.
By bringing her deputy in from outside official Ottawa — Sabia, former CEO of the Caisse de dépôt et placement du Québec and BCE, left his first stint in the federal government in 1993 — the Liberals hope to get the department to more closely align with its priorities, sources recently told The Logic. Finance is also set to implement major tax changes this year that will impact the tech sector. Ottawa's new cap on employee stock options won't apply to staff at most Canadian startups and scale-ups, but a few publicly traded tech firms are affected. Ceridian CEO David Ossip recently told The Logic the measure will hurt the ability of companies like his HR software maker to hire executive talent; the government withdrew previous attempts to impose an options cap after opposition from innovation-economy firms.
The finance department must also design Canada's version of a digital services tax (DST). The FES promised a detailed proposal in the 2021 federal budget — traditionally tabled in the first quarter of the year — and a launch date of Jan. 1, 2022, if an OECD-led process does not first reach a new global deal on taxing multinational companies. During the 2019 election campaign, the Liberals proposed a levy mirroring France's — three per cent on sales of online advertising and user data by firms with domestic and worldwide revenue of at least $40 million and $1 billion, respectively. But neither Freeland nor predecessor Bill Morneau have since said whether they plan to stick to that version of the DST.
Ehren Cory, CEO, Canada Infrastructure Bank
The Crown corporation's new head took over in November 2020 after eight years at Infrastructure Ontario, which manages the province's major projects. His immediate task is to implement the bank's $10-billion Growth Plan, developed under Sabia's leadership.
The short-term strategy calls for $2 billion in spending on broadband, as well as $2.5 billion for clean power and $1.5 billion for zero-emission buses and charging infrastructure. While the infrastructure bank is meant to operate at arm's length, each of those is a major fiscal and policy priority for the Liberal government.
The agency must also show that it can fulfil its original promise of attracting institutional investors to Canadian megaprojects. The 2016 FES announcing the infrastructure bank projected a four-to-one ratio of private to government capital, and in October, Sabia said the Crown corp could “stretch $1 of taxpayer investment into $2 or $3 of total project investment.”
But international investors haven't exactly piled into Canadian infrastructure as planned. Asked in October 2020 for examples of projects securing global financing following infrastructure bank involvement, the agency cited the Caisse's participation in Montreal's Réseau express métropolitain rail project. At Infrastructure Ontario, Cory developed projects with private-sector partners.
While it receives less attention than its money-deployment role, the infrastructure bank also has a mandate to advise governments on their building plans. Cory brings experience in the field. In May 2019, the provincial government allowed Infrastructure Ontario to sell its expertise abroad, a move its thenCEO said followed requests over the years from other jurisdictions. And before his public-service roles, Cory was a consultant at McKinsey, advising government and business clients “mostly on the delivery of big capital projects,” he told a provincial legislative committee in April 2017.
Carla Qualtrough, Minister of Employment, Workforce Development and Disability Inclusion
Nearly three million people lost their jobs in the first two months of the pandemic, and while employment has recovered significantly, economists say permanent business closures and accelerated automation due to COVID-19 will eliminate some positions for good. It's the British Columbia MP's job to implement programs and benefits that will help those displaced workers retrain or improve their skills to find new ones.
The Liberals' September 2020 throne speech promised “the largest investment in Canadian history in training for workers,” including funding for skills development targeting “growing sectors,” education and accreditation assistance, and job-matching. Ottawa is transferring an extra $1.5 billion to the provinces via its workforce-development agreements to pay for training. The federal government will itself spend $274 million over the next two years on expanding programs for Indigenous workers, people with disabilities, women and foreign credential holders, most of which are delivered by Qualtrough's Employment and Social Development Canada.
Qualtrough is also tasked with implementing the new Canada Training Benefit, promised in the 2019 federal budget, which includes a tax credit, leave rights and the ability to access Employment Insurance (EI) while learning. And the federal government plans to expand EI itself to people who didn't previously qualify, including self-employed and gig workers.
Erin O’Toole, Leader of the Official Opposition and the Conservative Party of Canada
The new Conservative leader has spent his first four months in the role of chief government critic focused on the Liberals' pandemic response, particularly the rollout of COVID-19 vaccines. He's said he's not looking for a federal election until the country is “through the health and economic crisis,” but political pundits are once again predicting a campaign this year. And while the government's handling of the pandemic will be front and centre, policies for stimulating growth and jobs will likely play a big role.
O'Toole's leadership platform included proposals for new incentives for broadband build out and cleantech innovation, implementing open banking and a largescale tax-code review. While policy planks from interparty contests don't always translate to general election promises, many of his ideas are in line with past Conservative campaigns, as well as the Liberal government's current programs.
More novel may be O'Toole's approach to workers displaced by digitization and automation. The Conservative leader's Labour Day message criticized big business for outsourcing to cut costs and an October speech to Canadian Club Toronto expressed concern about the decline of private-sector union membership attracted attention.
Colette Kaminsky, Associate Assistant Deputy Minister, Strategic Innovation Fund, Innovation, Science and Economic Development Canada
The Liberal government's flagship business-support program continues to grow, as it adds new money to support R&D activity and company growth in priority policy areas. At its July 2017 launch, the Strategic Innovation Fund (SIF), which rolled up four existing auto, aerospace and defence programs, had a $1.26-billion budget. It's now nearly $6 billion, with $2.7 billion allocated to 74 projects thus far, according to Innovation, Science and Economic Development Canada (ISED).
Longtime SIF head Kaminsky was recently promoted, and leads the program's team of over 90 that assess applications from scale-ups, multinationals and industry-academia consortia. The group within ISED then administers the contribution agreements that dictate how recipients can spend their grants or repayable contributions and the goals they must meet to keep the funding flowing. The SIF received 158 preliminary statements of interest in the 2019-20 fiscal year, said department spokesperson Yara El Helou.
The Liberal government launched the SIF as a sector-neutral program, but it's frequently tacked on industry-specific carve-outs governed by market conditions and political priorities. In late 2018, it added $250 million for steel and aluminum producers hit by U.S. tariffs, and $100 million each for the struggling forestry and oil and gas industries. During the pandemic, Ottawa has put in another $792 million in new money for companies working on medical R&D and bio-manufacturing projects.
Kaminsky and her team will likely receive a flood of new cleantech applications this year. In December 2020, the Liberal government promised a new $3-billion Net Zero Accelerator stream for the SIF as part of its $15-billion climate plan. The program is for projects that reduce industrial, aerospace and auto-manufacturing emissions or build a domestic electric-battery supply chain.
Getting allocated funds out the door remains a challenge. As The Logic reported in May 2020, the SIF paid out just $313 million over its first three fiscal years, a period over which it allocated $2.06 billion.
Daniel Therrien, Privacy Commissioner of Canada
Therrien has pushed for expanded authority for several years, and has criticized the Liberal government for moving too slowly to update privacy laws. Bains's overhaul, proposed in November 2020, would finally give the watchdog stronger powers to investigate and punish companies that misuse personal information. Under the new Consumer Privacy Protection Act (CPPA), the commissioner will be able to order firms to change their practices and stop collecting or using data, as well as recommend fines of up to $25 million, or five per cent of global revenues.
But the legislation expanding his powers also creates a new tribunal that will rule on financial penalties and appeals of the watchdog's decisions.
Therrien's original seven-year term expires in June. The privacy commissioner reports to Parliament, but is appointed by the government and can be renewed; predecessor Jennifer Stoddart got a second, three-year stint.
Ian Scott, Chair, Canadian Radio-television and Telecommunications Commission
The regulator is set this year to make some big wireless decisions and gain substantial new powers over digital content.
Topping the CRTC's list of to-dos: declaring whether Bell, Roger and Telus should be required to sell access to their networks under fixed conditions to mobile virtual network operators (MVNOs), which don't typically build their own infrastructure. The topic was one of the main subjects of two weeks of closely watched regulatory hearings in February 2020 that included all the key players in the telecom industry. The Competition Bureau, as well as existing and would-be MVNOs like Ice Wireless and TekSavvy, have called for mandated access. The CEOs of the Big Three have suggested they would cut investment if the CRTC does so.
The CRTC is also one of several federal departments and agencies with budgets to improve the quality of internet access in rural and remote areas. In August 2020, it announced the first projects from its $750-million broadband fund, allocating a combined $72 million to one in Northern Manitoba, two in Yukon and two in the Northwest Territories. Scott told the committee the agency received nearly 600 applications totalling $1.5 billion for the program. The updated law would give the CRTC the power to require that online undertakings — streaming services — pay to make Canadian content. A December 1999 order from the regulator currently exempts internet broadcasters from its rules. Early last year, Scott said it's inevitable that foreign streaming services will be subject to Cancon contribution requirements.