This is an unprecedented first in federal elections in Canadian history. This is the first mandated election since the passage of Bill C-16 by the 39th parliament mandating that a general election is to take place on the third Monday in October in the fourth calendar year of a government’s mandate. Of course, that doesn’t stop the government in power from calling an early election. That did not happen this time, so, when the Harper Government called the election on August 2, they called if for the October 19, 2015 (the third Monday in October).
In previous election years, it was not surprising to see new federal initiatives which included funding help to be placed on hold during the 5-7 week federal election campaign (note: the minimum time is 37 days). After all, in the old format, elections didn’t last a long enough period to effect business decisions or jeopardize business opportunity windows.
Not so for election 2015. With Parliament not sitting since the end of June, that will be over four months from the time the 41st Canadian Parliament stopped sitting until the 42nd Parliament might be convened. This represents the longest period of time that Parliament has not sat since 1948, when the 20th Canadian Parliament under Prime Minister William Lyon Mackenzie King did not sit for over six months between July, 1948 and January, 1949.
Further, since the end of the 41st Parliament, there have already been extraordinary changes in the economy and in the economic outlook for Canada. The crude oil price continues to weaken, the Canadian dollar continues to tumble, and the Bank of Canada once again decreased the prime lending rate with the hopes of stimulating the export sector.
Federal elections and the possible changes they can elicit, are obviously important to your business, as future corporate taxes, government spending direction, and government philosophy have both a real and a perceived effect on the business climate in which you operate. That being said, this year there appear to be many common denominators in the party “platforms” (this author’s words, not necessarily what each party calls it). Specifically, each party is emphasizing both job creation and the environment as top priorities.
What does each of these focuses mean to your business? On the jobs front, if we look at the current federal package of stimuli, which, assuming a re-elected Conservative government would not change dramatically, most of the emphasis is on youth employment, and subsidized training programs. There is a continued shift in emphasis from research and development funding after the work has begun, to pre-planned innovative projects, as delivered by the Industrial Research Assistance Program (IRAP), from the National Research Council. (Editors’ note: frequent readers of this column know that a large variety of funding help comes via this route).
The NDP, as point 1.1 of their NDP Policy indicates that their focus will be in “job creation by developing a green economy with appropriate support for transition programs and for research and development.” This author’s interpretation is that, projects and employment opportunities involving the new green economy will be where the money is going to be targeted.
The Liberals, in their Real Change Plan highlight creating clean jobs and investment. They indicate that their strategy will be to generate more clean technology investments, and to “work with the provinces and territories in order to make Canada the world’s most competitive tax jurisdiction for investment in research, development and manufacturing of clean technology.” Again, this author’s interpretation is that it is similar to the NDP position, but with the objective of returning Canada to the world’s most competitive R&D jurisdiction, with new or increased IRAP or SR&ED funding support, albeit specifically for clean technology manufacturing, not all R&D.
Obviously all three Parties will have a different way to achieve their stated goals, but it is fairly clear that it’s all about jobs and innovative clean technology projects. Even in the case of a minority government, considering the current economic environment, there will be initiatives aimed at funding support for the business sector to incentivize growth.
In next months’ column we will look at how you can position yourself to take advantage of the upcoming election results and the new funding initiatives that might be introduced later this year.