News Releases and Op-Eds
Latest Releases >>
NEWS RELEASE: Budget 2017 Moves Toward Improved Business Competitiveness While Still Balancing the Books
Victoria - The Business Council of British Columbia welcomes today’s provincial budget, which managed to find room for tax relief while maintaining the government’s commitment to balance the budget. This is a noteworthy accomplishment at a time of global uncertainty and when most other provinces continue to face budgetary shortfalls. Keeping the books balanced reaffirms the government’s commitment to prudent fiscal management, and provides BC with some policy flexibility going forward.
“Delivering a balanced budget within a climate of modest economic growth and a mixed outlook for commodities sets BC apart and signals that the province is a stable place to invest and do business,” said Greg D’Avignon, President and Chief Executive Officer of the Business Council of British Columbia. “We congratulate Minister de Jong and his cabinet colleagues for their continued focus on disciplined expenditure management.”
The benefits of past spending discipline were evident today as the government announced a number of tax relief measures. Following on the recommendation from the Business Council and the Commission on Tax Competitiveness, the province will eliminate the PST on electricity used by business over the next two years – an important step that will bolster overall business competitiveness. This move is particularly helpful for the province’s energy-intensive export sectors, such as forestry, mining and manufacturing, who sell their products into international markets.
“Today’s budget offers a series of tax measures which, together, will help to keep BC on a path towards a more productive and competitive economy, chief among them being the elimination of PST on electricity,” said Jock Finlayson, Executive Vice President and Chief Policy Officer .
The extension of the scientific research and experimental development tax credits, as well as the mining flow-through share tax credit, is also good news as BC seeks to attract investment and develop a more innovative economy.
Government’s decision to expand the interactive digital media tax credit to cover augmented and virtual reality products supports the expansion of BC’s technology sector, which has become a growing niche area of expertise in the province. Growth in the technology sector will position BC to effectively leverage opportunities emerging from the Cascadia Innovation Corridor and the associated Memorandum of Understanding signed between Washington State and the Province of British Columbia in September 2016.
Changes announced today to the Medical Services Plan premiums (MSP) will provide relief for British Columbians and employers, a significant portion of whom pay the MSP premiums for their employees; this effectively provides a reduction in payroll costs to BC’s businesses. “BC also needs to be working to leverage our strengths in health research as well as related technologies to nurture the growth of a commercially focused health innovation cluster and also to improve the performance of the health care system,” noted Mr. D’Avignon.
The Council continues to believe the province must do more to strengthen the foundations for a competitive and productive BC economy. “We support all of the recommendations in the 2016 report by the Commission on Tax Competitiveness, and we will be urging the province to act on these recommendations in future budgets,” stated Mr. Finlayson.
The Council also supports the additional capital spending outlined in today’s budget. The government has earmarked additional funds to build infrastructure and refurbish critical infrastructure in the province. This too helps bolster BC’s competitiveness and also improves the quality of life for our residents. “With today’s low interest rates and attractive borrowing costs, now is the time to accelerate investments in infrastructure development and refurbishment,” noted Mr. Finlayson.
While today’s Budget means BC will be better positioned to compete in the future, looking beyond Budget 2017 the Business Council believes the government, working with business and post-secondary partners, will need to develop a longer-term strategy aimed at supporting innovation and improving productivity. Earlier this week, the Business Council released report entitled: BC2035: A Vision for Economic Growth and Prosperity (bcbc.com/bc2035). It is a forward looking document offering numerous recommendations and ideas in support of building a stronger and more resilient BC economy in the years and decades ahead.
About the Business Council of British Columbia
The Business Council of British Columbia, now in its 50th year as the premier business organization in British Columbia, is a non-partisan organization made up of 250 leading companies, post-secondary institutions and organizations from across BC’s diverse economy which support hundreds of thousands of jobs across the province. The Council provides timely and exceptional public-policy research and advice on issues to enhance BC’s competitiveness and prosperity.
Cheryl Maitland Muir