OTTAWA — Renewed fears about productivity growth, soft economic figures coming out of last year and an electorate consumed with cost-of-living pressures all leave the Liberal government with plenty to do in this month’s federal budget.  

Even as some economists and business groups urge restraint, firms and industry lobby groups are lining up with asks of Finance Minister Chrystia Freeland. Their recommendations range from the regulatory (finally implement open banking and approve new drugs faster!) to the financial (roll out green tax credits and spend big on research and semiconductors!).

Ahead of each budget, the House of Commons Standing Committee on Finance takes proposals from companies, sector groups and the public on what they’d like to see in the final document. The Logic reviewed more than 850 submissions to see what business wants this year. Here’s what they’re seeking:

Fintech

The players

• Canadian Bankers Association
• Electronic Transactions Association
• FDATA North America
• Fintechs Canada
• Insurance Brokers Association of Canada
• Interac
• Konsentus Group
• Payments Canada
• Questrade
• Shakepay
• Square
• Wealthsimple

After many delays and much uncertainty, Freeland announced in the fall economic statement that the government will introduce open banking in this budget, with all the rules in place by the end of 2024 and a government unit in charge of the system. Customers will be able to give certain fintech firms permission to access their financial data, which large banks will be required to hand over. Services that want to receive that information will need to meet security and privacy standards.

Budget submissions on the rollout reflect historical tensions between fintechs and big banks over how to implement what the government calls “consumer-driven banking.” The Electronic Transactions Association and the Financial Data and Technology Association (FDATA), both industry lobbying groups, want the government to hurry up already.

The Insurance Brokers Association of Canada, meanwhile, wants the government to take it slow. It urged Ottawa to conduct “extensive consultations,” saying consumer data should not be used for insurance purposes and “consumer protection must be paramount.”

Canada’s big six banks have expressed concerns in the past about open banking, but the submission from the Canadian Bankers Association doesn’t mention it. It does, however, call on the government to tighten up standards for “un- and under-regulated financial service providers” like e-commerce platforms, saying the growing number of consumers who use such services “​​are largely unprotected.”

Wealthsimple, meanwhile, focused on another long-delayed proposal to modernize Canada’s financial system: Real-Time Rail, which would support instant payments. Wealthsimple called on the feds to implement the system, mandate uniform pricing for participants and engage with other levels of government to ensure they’re prepared for it.

FDATA, the Electronic Transactions Association and Montreal-based Shakepay, which operates a crypto platform, called on Ottawa to expand membership eligibility in Payments Canada, the non-profit organization that maintains the country’s payments infrastructure. Payments Canada concurred, proposing that membership be open to credit unions, payment service providers and financial market infrastructure entities. – Claire

Artificial intelligence

The players:

• Alliance of Canadian Cinema Television and Radio Artists
• Association des professionnels de l’édition musicale
• Chegg
• Council of Canadian Innovators
• MaRS Discovery District
• Professional Institute of the Public Service of Canada

With AI dominating headlines and conference-circuit conversations, businesses and workers groups had plenty of suggestions as to how Ottawa should handle the technology’s benefits and impacts.

The Council of Canadian Innovators called for a specific commercialization and intellectual property strategy for AI. The scale-up lobby group argues that foreign firms are currently capturing too many of the patents derived from work funded by the $568.8-million Pan-Canadian AI Strategy (PCAIS). 

Santa Clara, Calif-based Chegg wants the government to fund R&D on AI that can “ensure accuracy and veracity” for use in educational settings. The publicly-traded firm is building its own generative tools, but its stock took a hit last year after it acknowledged that ChatGPT was hurting its growth.

Once firms turn AI ideas into products, Ottawa should create financial incentives for Canadian businesses to buy them, Krista Jones, chief delivery officer at ecosystem organization MaRS Discovery District said in testimony at the committee. 

Unions and artists’ associations are pushing Ottawa to introduce new protections for workers whose jobs or creative output may be impacted by artificial intelligence. 

The Alliance of Canadian Cinema Television and Radio Artists wants legislation to safeguard actors “images, likeness, voices and performance” from AI replication without authorization or licence. The Association des professionnels de l’édition musicale, which represents francophone music publishers, wants provisions to require AI developers to compensate rights holders for use of their work. Innovation, Science and Economic Development Canada (ISED) has been considering changes to the country’s copyright regime in response to the rise of generative AI; consultations closed in January.

Labour groups are concerned about the technology’s impact in the workplace. The Professional Institute of the Public Service of Canada wants Ottawa to require that employers negotiate AI use as part of collective bargaining and offer displaced staff job guarantees or re-training. The government worker union also wants a new federal agency to “research, monitor and regulate AI.” The unit would supplement the commissioner position that would be created if the Liberals’ proposed Artificial Intelligence and Data Act becomes law. – Murad

Health and biotech

The players:

• Innovative Medicines Canada
• The Canadian Forum for Rare Disease Innovators
• AbbVie
• AstraZeneca
• Merck
• Novo Nordisk
• Pharmascience
• Medtech Canada
• BioteCanada

The industry association for companies that develop and sell new drugs, Innovative Medicines Canada (IMC), wants more streamlining of approvals for its members’ products. AI, digital health and better diagnostics are changing the market, the group argued in its submission, and Health Canada needs to keep pace. The department is working on being more agile, but IMC wants the government to consider accepting the reviews of other authorities—such as in the U.S., the EU or Japan—instead of replicating all their work here. It also wants to see revisions completed to the way the government regulates the prices of newer, patent-protected medicines, a years-long saga.

Several individual drug companies seek federal policies that would improve the markets for their products (though their submissions don’t explicitly say that). Novo Nordisk, which makes hot weight-loss drug Ozempic, wants obesity recognized as a chronic disease that causes other chronic illness, for instance. AstraZeneca, which makes a range of cancer drugs, wants federal health transfer payments to provinces to include requirements to improve cancer care. Merck, which makes the Gardasil vaccine against human papilloma virus (HPV), recommends federal funding for provinces to give more HPV shots.

Pharmascience, a Montreal-based maker of generic versions of drugs that are out of patent protection, seeks subsidies to expand drug factories; government support to stock up on ingredients and make excess medications just in case; and federal drug programs that would pay extra for Canadian-made products.

BioteCanada, which includes drug companies among its broader healthtech membership, wants more federal funding for innovation in its sector, including a $250-million matching program for privately raised capital, a $350-million venture-capital program and tax-credit reform to incentivize investment.

MedTech Canada, the association for companies that make things like hospital equipment, surgical tools and prosthetics, likewise wants programs tailored for its members to boost production in Canada and supports for provincial health systems to buy their products, especially newer, digital-oriented gear. – David R.

EVs and critical minerals

The players

• Accelerate
• Albany Graphite
• Alectra
• Canadian Camping and RV Council
• ChargePoint
• Équiterre
• Electricity Canada
• Flo
• Prospectors & Developers Association of Canada
• Recreation Vehicle Dealers Association
• Tahltan Central Government
• Teck
• TMX Group
• Vale

Like the rest of us, the electric vehicle and critical mineral sectors want to pare their tax bills, saying a slew of federal credits announced in Budget 2023 have been slow to come online. Accelerate, an industry group for companies in the EV battery supply chain, said Canadian firms “are being approached by foreign government investors to provide the capital” instead.

Electricity Canada wrote “we need to get moving” on clean power, recommending the government expand the Clean Electricity Investment Tax Credit to support intra-provincial transmission and upgrades. Utility Alectra wants the credits broadened to cover technology projects that help feed the electricity grid with small-scale sources such as EVs, rooftop solar panels and on-site batteries.

Streamlining the impact assessment process for new mines and aligning it with provincial permitting is top of mind for miners like Vale and Teck. And many in the critical mineral industry want to see more support for Indigenous communities. Albany Graphite suggested expanding tax credits for critical mineral projects where the nearest First Nation owns a stake over five per cent. A working group of industry and the Tahltan Central Government, based in northwestern B.C., is calling for more funding for emergency services, policing, health services, housing infrastructure and ecological protection in areas surrounding new mines. 

Flo suggests expanding the Canada Greener Homes Grant to cover electrical upgrades for EV charging, while ChargePoint suggests changing the Zero Emission Vehicle Infrastructure Program to cover more of the preparatory renovations needed to install EV chargers in multi-unit residential buildings. The RV industry wants to see more rural and campground chargers. 

Finally, environmental group Équiterre echoed a longstanding request of the EV industry: making used EVs eligible for zero-emissions vehicle purchasing incentives. – Anita

Crypto

The players

• Canadian Blockchain Consortium
• Canadian Web3 Council
• Crypto.com
• Shakepay

Canadian securities regulators are in the midst of a crackdown on stablecoins, or crypto tokens whose values are pegged to those of assets outside the crypto world, typically the U.S. dollar. By April 30, crypto platforms registered in Canada will have to stop offering stablecoins whose issuers haven’t submitted annual financial statements and other documents to regulators. The tokens, which have a collective market capitalization of US$151 billion, were the subject of budget submissions from the industry.

The Canadian Web3 Council reiterated its position that stablecoins should be regulated under the Retail Payments Activities Act, rather than as investment vehicles under securities laws. Crypto.com, a Singapore-based crypto platform that’s registered to operate in Canada, called on the government to put the compliance burden on stablecoin issuers rather than the platforms that offer them.

Shakepay, CW3 and the Canadian Blockchain Consortium all invited the government to try looking on the bright side when it comes to the crypto industry. Both of the industry groups suggested Ottawa recognize the economic and job-creation opportunities presented by the often-controversial sector. Montreal-based Shakepay specifically urged the government to implement recommendations on the blockchain sector from a Commons standing committee, which suggested the government recognize it as an emerging industry with significant economic potential. – Claire

Deep tech

The players:

• Canada’s Semiconductor Council
• CMC Microsystems
• D-Wave Systems
• VentureLab
• Xanadu

Chip and quantum firms are calling for Ottawa to establish incentives and programs like the ones on offer in the U.S. to grow their capital-intensive sectors.

Canada’s Semiconductor Council cites the US$52.7 billion U.S. CHIPS and Science Act, which aims to reshore production of components to North America. It’s seeking a “resiliency” fund of at least $3 billion to help build or expand production facilities that fit into new continental supply chains. The council is also asking Ottawa to put up $500 million over five years, to be matched by industry, for a public-private organization that would run a new national semiconductor strategy. The lobby group’s members include homegrown startups like Blumind and Spark Microsystems as well as multinationals like AMD and Marvell. 

CMC Microsystems, a Montreal-headquartered accelerator and producer for chip startups, is pushing the federal government to finance its FABrIC project, a $223-million, five-year effort to expand chip R&D funding and prototyping capacity. Elsewhere, VentureLab, a Markham, Ont.-based hardware accelerator, called for the federal government to set up a new fund that would back early-stage chip companies, and for it to prioritize microelectronics professionals in its fast-track temporary foreign tech worker program.

Quantum computing firms, meanwhile, want Ottawa to act as tester and buyer of their faster-calculating machines. Burnaby, B.C.-based D-Wave Systems is renewing its call for a “sandbox” program in which startups could propose quantum solutions to the problems of government departments and businesses. D-Wave also wants funding for a program to train workers for the sector. 

Toronto-headquartered Xanadu is calling on Ottawa to pay for universities to develop and run courses in quantum computing programming. And it wants the federal government to pitch in for a private-public partnership to set up a quantum data centre in Toronto, where researchers, businesses and government departments can test and develop applications on the computers of homegrown firms. – Murad

Energy

The players: 

• TC Energy
• Shell Canada
• Renewable Industries Canada
• Innergex Renewable Energy
• EDF Renewables Canada
• Ekona Power
• Canadian Renewable Energy Association
• Berkshire Hathaway Energy Canada
• AltaLink
• Air Products Canada

Tax policy is top of mind among Canada’s energy players. Companies are calling for more details on several key federal investment tax credits (ITCs) promised in earlier budgets—particularly ones that apply to hydrogen and carbon capture and storage (CCS) projects. Many are also pushing for an exemption from new tax rules that limit how much corporations can write off in expenses and interest costs.

Ottawa has promised a suite of ITCs as it looks to spur investment in decarbonization technologies. The tax credits let companies write off between 15 and 60 per cent of a project’s construction cost, depending on a range of factors. The federal government first promised a CCS tax credit in 2021. It later wrote rough guidelines for ITCs covering clean technology manufacturing, electricity and hydrogen. 

But the feds have been slow to specify how those credits will work, or how much companies might be eligible for. Shell Canada is calling for “timely engagement” on a number of ITCs, and proposed adjustments to a ranking system within the hydrogen tax credit that limits a company’s eligibility based on carbon intensity of the project. (Those recommendations echo earlier complaints by Air Products Canada, the company building a $1.6-billion hydrogen project in Alberta, which repeats the point in its 2024 budget submission). 

The Canadian Renewable Energy Association wants Ottawa to “accelerate” the hydrogen credit. Renewable Industries Canada wants it expanded to include biofuels. Berkshire Hathaway Energy Canada, which is building a 130-megawatt wind farm in southern Alberta and an Alberta-Montana transmission line, recommends several expansions to the clean electricity ITC.

Separately, many industry members are pushing for exemptions from Ottawa’s proposed excessive interest and financing expenses limitation (EIFEL) regime. EIFEL, part of Bill C-59 tabled late last year, essentially limits how much in tax deductions corporations can claim. Calgary pipeline giant TC Energy, Innergex Renewable Energy and the Canadian Renewable Energy Association are asking for an exemption for clean power builders. – Jesse

Research

The players:

• Universities Canada
• U15 Canada
• Individual universities from Athabasca to York.
• Colleges and Institutes Canada
• Polytechnics Canada
• Snolab
• Canadian Light Source
• Triumf
• Partnership Group for Science and Engineering

Overwhelmingly, Canadian research organizations and their associations want the federal government to invest massively in graduate-student scholarships, faculty posts for researchers and grants for individual projects—all per the recommendations of a report the federal government received before the 2023 budget but did not apply.

A panel led by Université de Montréal dean Frédéric Bouchard warned that “current support for graduate students—the researchers of tomorrow—is at a breaking point” because scholarship values have barely budged in 20 years and Canada is ever less attractive to the best thinkers, even those born here. University after university has taken Bouchard report recommendations and presented them to the government as its own.

Three major research sites—the Canadian Light Source synchrotron in Saskatoon, the Snolab particle observatory deep under Sudbury, Ont., and the Triumf particle accelerator in Vancouver—all seek long-term funding commitments.

Several submissions also seek federal backing for student housing and campus construction, including by making schools eligible for federal infrastructure funding or rewards through the Housing Accelerator Fund, and by creating a new grant program to build student housing. – David R.

Infrastructure

The players:

• Prince Rupert Port Authority
• Global Container Terminals
• B.C. Marine Terminal Operators Association
• Ashcroft Terminal
• Canadian National Railway
• Canadian Airports Council
• Atlantic Canada Airports Association
• Greater Toronto Airports Authority
• Calgary Airport Authority
• Telus
• Nukik Corporation 
• Ikea

Collectively, freight-moving industries want more federal investment in freight moving, particularly through a beefed-up National Trade Corridors Fund. The current program was allocated $4.6 billion for upgrades to everything from border crossings to port capacity, but it expires in 2028.

Ikea, a major importer, filed a brief with a similar request, saying Canada should invest more to support “strong and stable trade corridors, including ports and rail, across Canada.” (Ikea also wants more EV infrastructure, rebates for “climate-positive” products and investments in a circular economy that reuses, repairs and recycles more goods.)

CN seeks federal funding for greener trains, faster and simpler approvals for complex projects and even higher immigration rates (to address labour shortages). It also wants railways to be designated essential services whose workers can’t strike or be locked out.

Airports, meanwhile, want either to pay lower rents or to have more of the rents they pay sent back to pay for improvements. Their national council would like a domestic trusted-traveller program and more digitalization of all the paperwork involved in passenger flights, as would the authority for Toronto’s airports.

Telus, the only big telco to make a budget submission, wants digital policy included in Canada’s national climate plan, arguing that wired-up businesses—from agriculture to building management to industry—are less wasteful. Telus also wants more federal funding to build redundant communications capacity in case of damaging weather, stiffer penalties for vandals who target critical infrastructure, and a $250-million commercialization fund for new 5G technologies.

Nukik, the vehicle for a proposed electricity and broadband link from Manitoba to Nunavut, is back to seek $1 billion in federal funding after last year’s budget didn’t deliver it. – David R.

Innovation industries

The players:

• Calgary Chamber of Commerce
• Canadian Manufactureres & Exporters
• Canadian Venture Capital and Private Equity Association
• Council of Canadian Innovators
• Mouvement des accélérateurs d’innovation du Québec

Innovation lobby groups are repeating long-standing calls for Ottawa to improve firms’ ability to find financing and win contracts. 

The Council of Canadian Innovators (CCI), which represents homegrown scale-ups, is trying to make this the “year of procurement,” focusing on encouraging governments to change the way they buy technology. The group wants Ottawa to launch a dedicated fund which departments can tap to buy novel products and services in areas like cleantech and cybersecurity. 

It’s also seeking reviews of major federal programs that finance firms and projects, including the Strategic Innovation Fund (SIF). CCI says such schemes should issue grants rather than loans, pay for more R&D and focus more on emerging technologies, but also require recipients to have plans for how to handle their IP.

The Canadian Venture Capital and Private Equity Association (CVCA), which represents fund managers, is seeking tax changes and new programs it says will encourage private investment in a challenging market. It says Ottawa should give founders and investors a break on capital gains tax if they recycle the proceeds of selling a company or stake into another startup. CVCA would also like the federal government to copy B.C.’s 30 per cent tax credit for investments in VC funds and small firms.

On the program side, the group wants Ottawa to launch a new stream of its Venture Capital Catalyst Initiative, which seeds privately-managed funds. It’s calling for $200 million to back emerging managers, firms with fewer than three funds who are currently finding it tough to raise from institutional investors. 

Both the CVCA and CCI endorsed the creation of a “patent box,” a special lower tax rate on income generated from IP held in the country. Ottawa is currently consulting on the idea as part of its review of the SR&ED incentive.  

Sectoral and regional associations have their own asks. Mouvement des accélérateurs d’innovation du Québec wants a new system for assessing the success of startup-support organizations. Canadian Manufacturers & Exporters wants SIF to allocate at least $2.5 billion annually to factory expansions and other production capital projects. And the Calgary Chamber of Commerce is pushing for Ottawa to fund more wet labs, where startups can develop and test chemicals, drugs and other materials that need careful handling; biotech firms face a particular space shortage. – Murad