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Provincial Government

BC’s provincial government has a key role to play in shaping the province’s economy. Taxation, access to natural resources, transportation, education and skills development, environmental regulation, labour rules and many other social programs all fall under the provincial government’s jurisdiction. The Council conducts research and analysis on all these topics and regularly contributes to public-policy development at the provincial level.

 

BC Budget 2014 - Balanced and Uneventful

Operating within a very tight fiscal framework, Finance Minister Mike de Jong tabled a budget on Tuesday that projects a small surplus for fiscal 2014-15, followed by larger surpluses in the two subsequent planning years. Given the limited fiscal maneuvering room, the Budget contained only a handful of modest spending measures and a few small tax initiatives. Notably, there was nothing major in the area of skills training.

While some commentators will be critical of the limited spending increases, we recognize the accomplishment of keeping the budget in the black without imposing significant tax increases – something few other provinces are managing to do. Running surpluses puts BC in a strong fiscal position, especially at this juncture of the business cycle.  The Business Council believes BC’s competitive position has eroded in recent years. Although fiscal circumstances prevented the government from cutting or restructuring taxes, this is an area the province will have to address in the future as some BC industries face challenges linked to the province’s move back to the antiquated Provincial Sales Tax (PST), while others are grappling with the steepest carbon tax in North America, skilled labour shortages, onerous municipal property taxes on industry, and steadily escalating electricity costs. 

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News Release: Business Council applauds budget for providing sound fiscal framework - Global competitiveness requires greater focus on skills training, efficient regulatory processes and effective tax structures

February 18, 2014 (Victoria, BC) – The Business Council of British Columbia applauds today’s provincial budget in which the government delivered on the commitment to keep the operating budget balanced and to manage the overall provincial debt, preserving BC’s Triple A credit rating. 

“As the province moves into surplus and focuses on realizing new economic opportunities, there will need to be definitive action taken to ensure both new development opportunities and ongoing business operations are more competitive,” said Greg D’Avignon, President and CEO of the Business Council of British Columbia. “This focus on competitiveness will need to encompass infrastructure, human resources, regulatory systems and taxation policies that enable success in a highly competitive world.” 

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Submission: Water Sustainability Act for British Columbia Legislative Proposal

The Business Council's comments on the Ministry of Environment’s Water Sustainability Act for British Columbia: Legislative Proposal.

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D'Avignon: Why we should keep an eye on BC's core services review
(Vancouver Sun)

There is nothing easy about governing in tough economic times, but it can provide the impetus to assess priorities, focus resources and think more innovatively about the provision of public services.

While governments typically have internal checks and balances to ensure new budget expenditures are done in a systematic manner through the Treasury Board, cabinet and a variety of budget development processes, in Canada more comprehensive reviews of existing expenditures have tended to be done on a more ad hoc basis.

Frequently, these ad hoc reviews have been linked to changes in government and a desire for new approaches that meld political and policy directions to re-shape government. However, in recent times many of these reviews have been driven less by ideology and more by fiscal and technological imperatives.

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Update on the BC Government's Financial Health

This week’s release of the 2012-13 Public Accounts provides a timely opportunity to review the provincial government’s financial position and the underlying trends in the public finances. Produced by the Office of the Comptroller General, the Public Accounts cover the financial activities of all provincial Ministries and Crown agencies on a consolidated basis. It is the best available source to follow what is happening with the government’s activities in the area of spending, revenues, borrowing and debt management.

What does the new document show?

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D'Avignon: Collaboration will address BC's competitive challenges so that we realize BC's full potential

Congratulations to Premier Christy Clark and the BC Liberals – British Columbians have voted for a strong, stable economy and have given Premier Clark and her team a solid mandate to govern.  The Business Council also extends our appreciation to all of the candidates who put their names forward and to all of the outgoing MLAs for their years of service to British Columbia.

Voters have delivered a clear message that their collective economic future, and that of their children, remains top concerns.  Despite the opportunity to opt for change, voters chose to continue with a party that represents policy stability and that has pledged to pursue the goals of job creation and sound fiscal management.   

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News Release: Business Council Calls for Renewed Focus on Competitiveness as BC Returns to PST

The province’s leading business organization today called for a renewed focus on competitiveness, as British Columbia re-establishes the Provincial Sales Tax (PST) following the decision to eliminate the Harmonized Sales Tax (HST) regime.
“We accept the decision made to restore the PST,” said Greg D’Avignon, President and CEO of the Business Council of British Columbia. “But policymakers and legislators need to understand that returning to the PST represents the single biggest tax increase on business in the province’s history – and will be a significant blow to BC’s competitiveness across a wide range of industry sectors in an increasingly competitive world.”

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The Different Faces of Government Debt in British Columbia

Last month’s provincial budget provides updated projections of the government debt that has built up over time in British Columbia. Some media reports on the budget referred to the “accumulated government deficits,” while other reports mentioned the “tax-supported debt” or the “total provincial debt.” What do these different debt-related terms actually mean?

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Understanding Economic Development and Reconciliation with First Nations in BC: The Case for Accelerating Economic Engagement

Jurisdictions around the world have engaged in a wide variety of initiatives to reconcile the rights of indigenous peoples within post-colonial government and market economies.

As a province largely without ratified treaties, British Columbia has, by practical and legal necessity, developed a relatively unique set of public and private sector tools to facilitate natural resource development activity on the land base.

In this issue of Policy Perspectives, we highlight the diversity of initiatives underway in British Columbia to advance economic development on the land base. The paper makes the case that there is a promising, albeit challenging, opportunity to move progressively down a path of economic and social reconciliation that will provide tangible benefits to both First Nations and the province as a whole.

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Mental Disorder Claims Under the Workers' Compensation Act
- A Human Resources/Labour Relations Perspective

Section 5.1 of the Workers’ Compensation Act (the WCA) was enacted effective July 1, 2012. The intent of the revision was to expand the scope of mental disorder claims arising out of and in the course of employment which would be accepted as compensable under the WCA. One aspect of this expanded coverage involves a mental disorder claim by a worker that “is predominantly caused by a significant work-related stressor, including bullying or harassment, or a cumulative series of significant work-related stressors, arising out of and in the course of the worker’s employment.”

An immediate concern for employers from the implementation of Section 5.1 was an anticipated significant increase in mental disorder claims that would be filed by workers with WorkSafe BC. For those employer representatives responsible for administering compensation claims, it is expected that dealing with mental disorder claims may well evolve into a significant component of their work responsibilities.

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A 'Balanced' but "Challenging' Provincial Budget

In his inaugural budget, BC Finance Minister Mike de Jong delivered on the government’s long-standing promise to balance the operating budget by fiscal 2013-14. While some additional funding is provided for health care and a smattering of small-scale initiatives in support of the government’s Families First agenda, meeting the balanced budget target overshadowed all other aspects of the budget. Eliminating the fiscal shortfall of more than $1 billion on schedule required a combination of tax increases, provincial asset sales, and a hefty dose of spending restraint.

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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

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News Release:

BCBC Acknowledges Government’s Commitment to Fiscal Prudence in 2013 Budget
-Province must renew focus on competitiveness to attract investment and create jobs as priority in post-HST context-

The Business Council acknowledges the province’s disciplined management of expenditures in the years leading up to the 2013 Budget and as projected in the new three year plan, and endorses the government’s efforts to maintain fiscal responsibility through challenging economic times.

“BC’s current fiscal situation is comparatively good – better than most other provinces like Alberta and Ontario, where governments have been less successful in controlling spending growth,” said Jock Finlayson, Executive Vice President and Chief Policy Officer, Business Council of British Columbia. “However, our support for this Budget is tempered by the government’s decision to hike taxes and fees in a number of areas. This is an inopportune time to be adding to the tax burden facing business and industry in British Columbia. We are concerned that this negative signal could become a trend. Further erosion of the province’s overall competiveness will have negative longer-term implications for jobs and the economy.”

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Submission: Land Based Spill Preparedness and Response in BC

The Business Council's response to the Ministry of Environment's request for comments on the Land Based Spill Preparedness and Response in British Columbia, Policy Intentions Paper for Consultation (2012).

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Submission: 2013 Provincial Pre-Budget Submission

The Business Council of British Columbia submits preliminary advice on the 2013 provincial budget to the legislature's Select Standing Committee on Finance and Government Services.

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Boomtown or Ghost Town? The Need to Secure BC's LNG Opportunity

By Greg D'Avignon, President and CEO, Business Council of British Columbia
Even in the best of times, it is extremely rare that a province is presented with an opportunity to develop a new industry with the potential for $50 billion in capital investment over the next five years. Over the longer-term there may be as much as 1.2 million person years of employment, a six-fold increase in annual government royalties and a cumulative total upwards of $1 trillion in additional GDP over the next 30 years. Such are the magnitudes of the economic and social benefits that BC could realize by developing a new liquefied natural gas (LNG) export industry, serving the rapidly expanding Asian markets.

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Submission: Provincial Government's Expert Panel on Business Taxation

In response to the provincial government's request for input, the Business Council of British Columbia is pleased to share our views with the Expert Panel on tax measures that could be implemented to strengthen BC’s economy and competitive position as the province shifts from the HST back to the dual PST/GST system. The Panel is familiar with the benefits of the HST, and the many reasons why economists and public finance scholars almost universally see value-added taxes like the HST as an important and useful element in the revenue mix for governments.

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Public Sector pensions are sure to be reviewed

By Jock Finlayson, Executive Vice President and Chief Policy Officer, Business Council of British Columbia
With governments across the country addressing budget deficits pushed higher by the 2008-09 recession, attention is turning to the pay levels of employees in the public sec-tor and how these compare with private-sector practices.

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2012 BC Budget: Fiscal Caution Amid Economic Turbulence

Business Alert
Against an unsettled external economic backdrop, this week’s provincial budget saw Finance Minister Kevin Falcon reaffirm the government’s commitment to balance the operating budget by fiscal 2013-2014. Meeting this objective – which is mandated by current law – will require downshifting spending growth to about half the pace set during the years preceding the 2008-09 recession. While it featured a few new measures, the dominant theme of Budget 2012 is spending discipline while seeking to maintain core government services. To help address funding pressures across the provincial public sector, resources continue to be reallocated to higher priority areas such as health and education, and efforts to find efficiencies within existing budgets are accelerated.

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Submission: Special Legislative Committee on Cosmetic Pesticides

On June 2, 2011, the Legislative Assembly agreed to appoint a Special Committee to examine the use of Cosmetic Pesticides and to make recommendations that potentially could lead to new restrictions on the use of these products in British Columbia. The Business Council of British Columbia is pleased to provide these comments on the policy and regulatory framework concerning the cosmetic use of pesticides in British Columbia. The Business Council also has some concern about the prospect of a spreading patchwork of regulation in this domain. We strongly support the implementation of a coherent set of rules across the province, recognizing that urban and rural settings may warrant somewhat different treatment. As we understand it, around 20 municipalities in BC have already taken steps to restrict pesticide use, with some prohibiting all pesticides in their jurisdictions while others allow some applications with a municipally‐issued permit. Having an array of diverse or conflicting rules in different communities can create unnecessary confusion for industry as well as consumers and leads to higher compliance costs. The Ministry of Environment should ensure that any changes touching on the cosmetic use of pesticides will supersede municipal regulations in order to establish a coherent provincial regulatory framework for the use of pesticide products.

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