On February 19, 2014, Industry Canada announced it will modify obligations on spectrum licencees that require them to invest in research and development (R&D) and learning initiatives.
The R&D obligation was first put in place in 1983 and soon became part of most long-term spectrum licences. It required licencees to invest two percent of the adjusted gross revenue they derived from using the spectrum in eligible R&D activities.
R&D is a fundamental part of the telecommunications industry. For large wireless companies, extensive investment in R&D is important to remaining competitive.
For smaller companies, the R&D requirement may represent a significant administrative and financial burden. The Government has removed this requirement for companies with less than $1 billion in wireless annual gross revenue to reduce this burden and provide additional flexibility to make investment decisions in line with their business plans.
The learning plan requirement was introduced in 1999 and applies to a few spectrum licences in lieu of the R&D requirement. This requirement was inconsistent with other spectrum licences, and it is noted that many companies invest on their own in local educational initiatives. Smaller providers found the paperwork to be burdensome. Where applicable, the Learning Plan condition will be replaced by the R&D requirement. All of the existing obligations that were undertaken as part of the Learning Plan condition will be honoured.
These decisions are consistent with the objectives of the Government's Red Tape Reduction Action Plan, which was launched in 2012 and aims to reduce the impact of paperwork from the federal regulatory system on entrepreneurs and small and medium-sized businesses.
For more information on the changes to R&D and learning plan obligations, see the Decision.
