BC Business Matters:
Why Tax Competitiveness Matters
British Columbia is a small, open trading jurisdiction that relies heavily on natural resource exports to fuel the economy. While our economy continues to diversify (and that is a good thing) into more service oriented sectors, the core driver of the economy remains our exports, and natural-resource based products represent 70-75% of the province’s international merchandise export shipments. These exports, together with our strategic location and high quality of human capital, have combined to create a high standard of living.
In order to realize the theoretical benefits of these resources, there is also a need for sound public policies that enable development through effective planning, infrastructure development and tax/regulatory structures that attracts private sector investment. On this latter point, British Columbia’s historical track record is mixed, with significant improvements occurring in recent years that have helped to stimulate a lot of activity on the land base.
Five Things You Should Know about BC Budget 2013
1. The BC government’s operating deficit for this year is estimated at $1.2 billion, less than 3% of the pan-Canadian deficits from the national and all provincial jurisdictions
2. BC’s net debt equals 17% of GDP, the third lowest debt-to-GDP ratio in the country
3. According to Budget 2013, the BC government intends to limit the growth of program spending to just 1.5% per year over the next three years.
4. Capital spending is expected to fall from $6.8 billion this year to $6.2 billion in both 2013-14 and 2014-15.
5. Despite a one percent increase in the general corporate income tax rate (CIT), BC will continue to have a competitive CIT compared to other North American jurisdictions – however, the timing of this increase poses a risk for our overall competitiveness
Understanding the Limitations of Tax Increases – A Critique of CCPA’s Plea for Big Tax Increases on BC Businesses and Households
Recently, the Canadian Centre for Policy Alternatives (CCPA), a prominent union-backed Canadian think tank, released a study entitled “Progressive Tax Options for BC”. The basic premise of the study is that there is both a serious need and a significant desire among BC citizens for sizable tax increases to fund more services and re-distribute wealth to address inequality. In their words, BC has “plenty of room” to raise taxes. While this has been a common refrain from the CCPA for some time, this position is now backed with further research and the results of an on-line survey.
Metro Vancouver needs Regional Economic Development Strategy
In today’s global economy, the competition for talent, investment and high-value business activity increasingly is playing out at the metropolitan level. Indeed, urban regions are looming ever larger in the world economy. According to the Brooking Institution’s Global Metro Monitor, the 300 biggest cities and metro areas account for almost half of global gross domestic product, despite being home to only one-fifth of the world’s population.