|
Government amends xwave agreement, invests $2.4 million in IT industry The Department of Innovation, Trade and Rural Development and Treasury Board Secretariat today announced an amendment to the Industrial Benefits Agreement (IBA) with xwave. The amendment will result in a $2.4 million investment in the province�s information technology industry. Due to the global downturn in the IT sector, government has agreed to reduce xwave�s job requirements under the IBA. Through the negotiated amendment, government will receive a single, lump-sum payment of $2.4 million from xwave in lieu of the present and projected employment commitments. The payment will be placed in a fund and, through consultations with industry, will be used to help grow the local IT sector which is the overarching intent of the IBA. Xwave has met its other commitments under the current agreement, including its subcontracting commitment, and it has exceeded its new business commitments in each of the first three years. "Instead of waiting until the expiration of the contract in 2007, we are being proactive about growing the IT industry in Newfoundland and Labrador. The establishment of this fund and the amendment to the agreement with xwave are ways of doing just that," said Innovation, Trade and Rural Development Minister Kathy Dunderale. "The overall focus of the IBA is to grow our province�s IT sector. By working proactively with xwave and the local industry, and by creating this fund, we are taking the necessary steps to foster growth of our information technology sector," said Loyola Sullivan, Minister of Finance and President of Treasury Board. The amended IBA eliminates the requirement to create 100 new jobs over the term of the contract. In addition, the minimum annual employment commitment has been reduced to 490 professional and information technology positions in 2004-05, and further reduced to 460 positions in 2005-06 and 2006-07. The employment numbers may be higher than the minimum requirements, depending on the performance of the global IT industry. "While the job requirement has been reduced, xwave does remain committed to creating as many jobs as possible here in our province," added Minister Dunderdale. "As the IT industry regains a more solid footing and becomes more conducive to job creation, xwave will be in a better position to generate employment in Newfoundland and Labrador." "Nati is disappointed but also realizes the realities of the global IT market and xwave�s need to adjust to market changes," said Derek Sullivan, chair of Nati. "We need a vibrant xwave in this province to help stimulate industry growth. The $2.4 million fund provides a great opportunity for collaboration with the Government of Newfoundland and Labrador to strategically invest this money to create industrial benefits. We look forward to working with the new CIO and the Department of Innovation Trade and Rural Development to find ways of strengthening the capacity of the local IT industry and increasing competitiveness in international markets." Media contact: 2005 01 18 2:45 p.m. |
||
|
