OTTAWA — Conservative leader Erin O’Toole unveiled the party’s election platform Monday, promising a major overhaul of federal business funding programs, policy to take on Big Tech’s economic might, and measures that could open sectors like telecoms and banking up to more competition.

The 164-page document is chock full of promises and proposals—many aimed at businesses— but with varying degrees of detail. The party didn’t include a full accounting of what the platform will cost to implement should it form government after the Sept. 20 election, though a spokesperson told reporters the party has submitted its policies to the parliamentary budget officer to assess. 

Here’s what’s in there for the innovation economy:

Financing innovation

IP considerations: The Conservatives are proposing another big review of federal innovation programs, including the blockbuster but much-critiqued scientific research and experimental development tax credit. Companies seeking government funding would need to show that IP and profits are “likely” to stay in Canada, and pay it back if they sell out to foreign firms. 

A Conservative government would also exclude “large foreign tech companies” from innovation programs. The Liberal government’s flagship Strategic Innovation Fund has awarded just over half of the $4.8 billion allocated to date to domestic subsidiaries of foreign firms, according to The Logic’s ongoing analysis; none are large technology companies. 

The platform’s innovation plank heavily emphasizes IP. In addition to favourable tax treatment for resulting profits, announced last week, the Conservatives are proposing an up to $10,000 subsidy for small and medium firms for the legal and other filing costs of each of their first five patents. The Council of Canadian Innovators (CCI), a scale-up lobby group, called for the funding clawback provision and “patent box” tax measure. The Tories are also promising that economic benefits reviews under the law governing foreign takeovers and investments would consider any deal’s potential to remove IP from Canada; in March, the Liberal government updated the national security guidelines under the same legislation to focus more on data and emerging technologies.

“We are pleased to see quite a few specific proposals CCI has championed for years incorporated into the Conservative platform related to privacy, talent, intellectual property, and policies affecting the digital economy,” said executive director Benjamin Bergen, welcoming the party’s proposals for “incentives to keep intellectual property in Canada, and ending subsidies to companies that are not headquartered in Canada.”

Our very own DARPA: The platform proposes a new Calgary-headquartered Canada Advanced Research Agency that would manage $5 billion worth of programs for the hydrogen, small modular nuclear, space, electric vehicle and pharmaceutical sectors. The incumbent Liberals have awarded or promised significant funding for each. The Business Council of Canada, a lobby group representing the CEOs of some of the country’s largest companies, has pushed for a federal entity modelled on the U.S. Defense Advanced Research Projects Agency to issue challenges in areas like cleantech and biosciences, as well as advanced manufacturing, digital services and others.

The best of the rest: Tech groups want government procurement of innovative products and services to be an issue in this election. The Conservatives say they’ll make the government “finally start buying” from domestic startups—the Liberals launched a $100-million program to do that in December 2017—and create a tax credit for customers that do the same.  

The Conservatives are also re-upping a promise to review the tax code—a longstanding demand from business groups—and proposing to establish “industry councils” in sectors like biotech and retail to recommend regulatory changes. The Liberal government-appointed economic-strategy tables cited regulatory reform as a key priority in their September 2018 report.

The platform promises a raft of other entrepreneur- and startup-focused programs and boutique tax incentives. Among them:

• Companies would be able to claim up to 50 per cent of the wages of net-new hires for six months once the current pandemic subsidy program ends 
• Firms would be able to get partially forgivable loans of up to $200,000, to replace the $60,000 Canada Emergency Business Account
• Individual investors would get a 25 per cent tax credit up to $100,000 for putting money into a small business over two years
• Companies would get a five per cent tax credit on capital investments in 2022 and 2023. The Liberals’ accelerated write-off for equipment, announced in the 2018 fall economic statement, will be phased out between 2024 and 2027.
• Employees at “Canadian-controlled start-ups” who have at least two-thirds of their workforce in the country won’t be subject to the new stock-options cap. Staff of Canadian-controlled private corporations are already exempt under the Liberal government’s plan. 
• The Business Development Bank of Canada would be ordered to guarantee part of the loans small businesses take out from commercial banks.

Regulating Big Tech

After its early attempts to court tech giants to invest and hire in Canada, the Liberal government has taken an increasingly adversarial tone with Silicon Valley’s largest firms. The Conservatives are promising to match that tone, with policy proposals that tweak or build on existing plans.

Taxing Big Tech: The party says a Conservative government would make “foreign tech companies pay their fair share of taxes,” including sales tax and a three per cent digital-services tax (DST) on Canadian gross revenue. Netflix, Facebook and other firms that sell online services already began collecting and remitting GST/HST in July, after the Liberal government legislated the requirement last year. And a federal three per cent DST is scheduled to take effect in January 2022. Notably, the Conservatives say they oppose the Liberals “signing onto a global minimum tax rate at the G-7,” but don’t say whether they’ll withdraw from the G20 and OECD-led negotiations on updating the taxation of multinationals, which encompass both the provision the party opposes and a redistribution of taxing rights designed to deter DSTs.

Data and content rules: On the regulatory front, the Tories are promising legislation they say would protect consumer privacy better than the Liberals’ stalled Bill C-11, although the platform doesn’t explain how. Bergen said CCI welcomed “the ideas to address the shortcomings of Bill C-11 and undertake a meaningful reform of Canada’s privacy laws.’

O’Toole’s party would also set up a “technology task force” within the federal Competition Bureau to investigate “whether dominance and anti-competitive behaviour of big tech is damaging to Canadian industry,” with a focus on algorithms and data. Policy experts such as McMaster University’s Vass Bednar and Vivic Research’s Robin Shaban have called for Canada’s antitrust legislation and regulator to be modernized to reflect the growing importance of data collection in establishing corporate power. 

The Conservatives have previously said they’re “deeply concerned” about the Liberals’ proposal for a new regulator to police “online harms,” including hate speech. The platform does promise to criminalize “statements that encourage acts of violence” and give $25 million to law enforcement to investigate such threats, as well as hate speech, human trafficking and “disinformation campaigns by foreign governments or extremist groups.” And while they don’t go as far as the Liberals’ 24-hour takedown proposal, the Conservatives would institute “a stronger legal duty for social media platforms to remove illegal content.” 

Funding entertainment and the news: The Conservatives would make streaming services like Netflix, Disney Plus and Amazon pay to make Canadian content, and those that don’t voluntarily meet a currently undetermined spending threshold would have to pay into a federal media fund. But social media platforms would be explicitly exempt. The Liberals’ Bill C-10 floundered over concerns about its effect on user-generated content.  

The Tories also plan to do away with the Liberals’ $595-million package of job subsidies and subscription tax-credits for media outlets, but like the Liberals they say they would bring in rules to govern the relationship between publishers and the tech platforms like Facebook where links to their content are posted. The Conservatives are proposing a “digital media royalty framework” modelled on those recently introduced in Australia and France, including a “robust arbitration process” and new IP rights. News Media Canada, a newspaper lobby group, has called for such measures.

Environment and cleantech

The Conservatives’ long opposition to carbon taxes—a “permanent tax on everything,” they called it, in a slogan that went a long way to sinking Stéphane Dion’s prime ministerial ambitions in 2008—has been an albatross for a party seeking voters who care about climate-change policy.

This time, they’re proposing a carbon price that would feed “personal low-carbon savings accounts” that could be used for green purchases, such as bikes and bus passes. They would repeal the Liberals’ carbon-price backstop, which applies a federal levy on fossil-fuel purchases in provinces that don’t have equivalent policies of their own.

But for industry, the hammer remains: “We will assess progress after two years and be prepared to set industrial carbon prices on a path to $170/tonne by 2030,” the platform says, “but only if the combination of adopting a price based on that of our major trading partners and working with the U.S. on North American standards has not assured us that we are on a path to our Paris commitment.”

Nic Rivers, a University of Ottawa associate professor specializing in environmental policy, is quoted in the platform calling this “a serious plan.” In an interview with The Logic, he said that took him by surprise—he’d tweeted those words about a version of the Tory environmental policy released in April, but his view isn’t wholly complimentary.

Rivers said he liked how much of the existing Liberal climate-change plan the Tories are adopting. And going further, in some instances, such as by promising to require that 15 per cent of natural gas delivered to consumers come from sources such as landfills and sewage.

“That should deliver real emissions reductions from natural gas, which is important,” he said. A tougher low-carbon standard for fuels, meant to cut emissions from transportation, is also welcome.

On the other hand, the policy on industrial carbon pricing—only raising the price if necessary for deeper emissions cuts and not defining what “necessary” means—is a real concern, he said.

“I’m all for evidence-based policymaking and thinking about policy as you go and seeing what the evidence delivers,” Rivers said. “But I’m also skeptical because this is a party that has been not that serious about climate change in the past, and leaving a lot of discretion makes me worried that it will get elected [on] a serious climate plan and then not deliver that serious climate plan.”

Rivers said the plan for carbon-tax savings accounts is “​​a real gimmick. I think that it’s not a serious part of their plan, it’s going to undermine the greenhouse-gas reductions with that part of the plan.”

That promise was so widely panned—as inadequate from climate activists and as a needless burden from anti-tax hawks—that “I’m surprised they stuck with it after the reveal.”

Cleaner industry: The Tories pledge a tax credit for investments in carbon capture and storage in the energy sector and others that generate a lot of carbon dioxide, and to put government money into direct air capture, which filters carbon dioxide from the atmosphere.

Before the election campaign, the Liberal-led government began a public consultation on a carbon-border adjustment, which could include an import tariff on goods from countries with weaker climate-change policies or subsidies for exports so Canadian producers would be more competitive. The Tories’ platform includes a similar promise to “study the imposition of a carbon border tariff which would reflect the amount of carbon emissions attributed to goods imported into Canada.”

It also has a pledge to spend $1 billion to promote small modular nuclear reactors—power generators meant for industries that need a lot of electricity, for which they’ve generally relied on fossil fuels. CCI’s Bergen cited as a positive the Tories’ plan for “strategic investments in targeted growth sectors, including clean technology and biotechnology.”

Zero-emissions vehicles: To promote transportation that doesn’t burn gasoline or diesel, the Conservatives say they would require 30 per cent of new light-duty vehicles to emit no greenhouse gases by 2030 (the Liberals said in June they would ban sales of internal-combustion-engine vehicles in 2035), seek agreement with the United States on a charging standard for electric cars, beef up electricity grids to handle the load, and put $1 billion each into promoting electric-vehicle manufacturing and encouraging hydrogen-powered vehicles.

Numerous minerals found in Canada are components in zero-emissions vehicles, especially lithium, and the Tories say they would adopt policies “to facilitate the responsible exploitation and mining of lithium” as part of a broader critical-minerals strategy.

Foresight Canada, a cleantech accelerator, has said it’s looking to the parties to help de-risk investments in green technology, which can be intimidating for the first companies to take it up. The Conservatives say they would “provide tax relief to the first five facilities that use new technology that provides meaningful emissions reductions and has a high cost to build.”

And more: The Conservatives say they would:

• Promote liquefied natural gas as an alternative to coal and “subsistence fuels” like wood and dung, promoting exports abroad (climate hawks generally say that getting off fossil fuels entirely is what’s needed, though, and the Tories say they would repeal a restriction on tanker traffic in B.C. ports)
• Encourage building retrofits for energy efficiency
• Speed up environmental assessments for projects aimed at cutting greenhouse-gas emissions
• Set standards for carbon credits, “​​with the eventual goal of establishing a national carbon offset market.”

Infrastructure

New and repaired infrastructure is a mainstay of party platforms in both good times and bad: building new highways and transit lines, connecting more households to broadband internet and updating water systems funds a lot of jobs and produces ribbon cuttings for concrete results of government action.

Funding it the old-fashioned way: The Liberals have invested political capital, and $35 billion in public dollars, in the Canada Infrastructure Bank, which is meant to attract private money to public projects that have eventual financial payoffs. After a slow start and a turnover in its board and top management, the bank has pledged hundreds of millions of dollars to cities like Ottawa and Brampton for zero-emissions buses, and to steelmaker Algoma for new electric smelters. Catherine McKenna, the minister responsible, has said the bank’s mission is to back “infrastructure in the public interest,” not just public infrastructure.

Conservatives have called the bank a boondoggle. They say they would “scrap the [bank] and commit the money sitting unused on its books to infrastructure projects that can strengthen the economy,” though they’d continue funding projects the bank is already committed to backing. To keep trying to entice private investment, though, they would encourage public-private partnerships using “the successful model used in the last Conservative government of working in partnership with provinces, municipalities, and First Nations.”

The Liberals have also promised over $180 billion in direct federal funding for infrastructure over 12 years, through what they call their Investing in Canada Plan. The Conservative platform does not talk about changing the number, but the party would “target projects that strengthen transit and trade, reduce congestion and gridlock, and advance economic reconciliation with First Nations.”

Faster broadband deployment: Last week, the Conservatives pledged to make broadband internet access available to every household in Canada by 2025—five years faster than the Liberals say they can do it. (They’ve said they can get 98 per cent of households hooked up by 2026.) The Tory platform repeats the promise, blaming “a cumbersome process with five different agencies and departments working on this one critical priority” for the Liberals’ slower timeline.

The COVID-19 pandemic has made it very clear that the “digital divide” between people with high-speed access and people without is a big problem, the Conservatives say: workers and students in cities had an easier time shifting to working and studying at home, and have been better able to maintain social connections online. The divide “must be eliminated as quickly as possible,” their platform says.

Affordability

A recurring theme in the Conservatives’ promises is that they would increase consumers’ clout (by requiring banks to make it easy for customers to transfer their money and data to competitors like fintechs, for instance) and reduce the power of large market players (by forming a “technology task force within the Competition Bureau to examine whether dominance and anti-competitive behaviour of big tech is damaging to Canadian industry,” for example).

One eyebrow-raiser: The Tories say they would increase unions’ power to organize workers at multinational companies “with a history of anti-labour activity,” and would even force federally regulated employers with more than 1,000 workers or $100 million in revenue to put worker representatives on their boards.

And another: They say they would require gig-economy companies to fund tax-free savings accounts for the people who work for them, with contributions equivalent to the employment-insurance and Canada pension contributions they would have to make if the workers were on staff.

Child care: The Liberals’ solution to many affordability problems is government action, either by increasing the supply or by subsidizing the costs. That’s been their approach to child care, a signature promise in their April budget aimed at lightening the burden on families and making it easier for parents—especially women—to work outside the home.

Justin Trudeau and Chrystia Freeland have criss-crossed the country signing deals with seven of the 10 provinces—most recently in conservative-governed Saskatchewan. (Alberta, Ontario and New Brunswick do not have deals, though Alberta reportedly sought one.) The details vary, but the theme is that the federal government will sink billions of dollars into cutting average prices in regulated child-care centres to $10 a day for children under six, add spaces and increase wages.

The Conservatives say they would scrap those deals (though they wouldn’t claw back any money that’s already gone out) and use the roughly $30 billion in savings to increase a tax benefit for child-care expenses. They would turn the child-care expense deduction “into a refundable tax credit covering up to 75 per cent of the cost of child care for lower-income families.” (A sliding scale would see the benefits diminish to nothing for families making $150,000 a year or more.) They say because this tax credit would go to anyone who qualifies, it would be more widely available than $10-a-day spots that would still be limited.

The party also says it would increase supports for adoptive parents and those who suffer miscarriages, and allow people on parental leaves to earn some income toward the end, easing back into the workforce.

Making your cellphone cheaper: In 2019 the Liberals promised market reforms and regulations to reduce cellphone costs by 25 per cent, and the Canadian Radio-television and Telecommunications Commission ordered providers to make low-cost plans available by this past July. They did so, but critics say those plans are underpowered and inadequately advertised.

The Conservatives say they’d promote competition in the field by allowing foreign cellular providers to offer service in Canada—as long as Canadian providers could operate in those providers’ home countries.

Without indicating precisely how, the Tories also say they would “hold the big telecom service providers accountable for anti-competitive behaviour and practices that hurt consumers” and encourage investment by local providers, cutting the market power of national ones.

Food, too: A brief section in the platform promises to go after grocery chains for price-fixing, including applying criminal penalties to executives found colluding and raising maximum corporate penalties to $100 million. The Conservatives would institute a “tough code of conduct to protect suppliers and to promote grocery competition,” they say.

And housing: The biggest purchases many people will ever make get two pages of the Conservative platform, focused on increasing housing supply. They say they would sell federal land to builders, allowing investors to put off paying capital-gains taxes when they sell rental housing but put the proceeds into building more, and tie transit funding to municipal plans to increase density near stations.

Money launderers who funnel money through real estate would be targeted with tougher laws and more scrutiny, they say, and they would ban foreigners who don’t live in Canada (and aren’t imminently moving here) from buying homes for two years, with a review of the policy at that point. Foreign investors could still put money into purpose-built rental housing, though.

The bottom line

Platforms are sales pitches as much as they are policy proposals. This one says the Conservatives want to be seen to have detailed plans to attack a wide array of problems in Canada, and won’t be shy about using the power of the government to do it. The NDP published a less detailed but still substantial platform last week; the Liberals’ is still to come. With just one full day down in the campaign, though, predictions that this would be an election about nothing already look wrong.