Overall, Budget 2020 lacks a clearly defined competitiveness strategy that would ultimately support affordability measures long-term
VICTORIA, BC, February 20, 2020–The Provincial government unveiled a balanced budget today with affordability at its core—but the business community is left wondering about the absence of a clear ‘competitiveness strategy’ in the budget—and the impact this will have on BC’s economy in a world of rising costs and global economic uncertainty.
The BC Chamber is pleased with the financial prudence of the budget, and its continued focus on the government’s commitment to improving infrastructure and health care facilities, as well as improved childcare access. However, the BC Chamber notes that this comes with a shift in the tax burden onto business—to the tune of $1.9 billion with just the Employer’s Health Tax alone.
Meaningful line items for BC businesses:
- The new BC Access Grant complements the federal Canada Access Grant and gives up to $4,000 to students to help with education costs for programs that lead to a degree, diploma or certificate. “Our members are telling us skilled labour is a choke point,” Litwin says, so this is a welcome addition.”
- PST will be removed on machinery and equipment that is used for pollution control and waste management. Specifically, this exemption will remove location restrictions.
- A new exemption from additional property transfer tax for certain Canadian-controlled limited partnerships will help ensure adequate land is available for development.
- The province committed an additional $419 million over three years under CleanBC, including $155 million for a program that will help industries move toward low-carbon solutions.
“Our members have asked for affordability measures, but four out of five BC businesses also say the cost of doing business has worsened in the past year. Considering the current headwinds we’re facing—both within Canada and globally— without a plan for competitiveness, some of these important affordability measures, like the BC Child Opportunity Benefit, could lead us into deficit in the years ahead. Today we didn’t see a plan to help us compete and this is deeply concerning,” Litwin says.
Several competitiveness measures of note—proposed as part The BC Chamber’s 2020 Budget Submission—were absent from Budget 2020:
- While the carbon tax increased to $40 per tonne, and will reach $50 per tonne by 2022/23, the budget saw no direct relief for energy intensive, trade exposed businesses.
- Budget 2020 still lacks targeted action to make market housing more affordable by addressing supply issues.
- While Budget 2020 provides new funding to develop opportunities within the forest sector, there is a disconnect between the funds committed (13 million over three years) and the significant – and multi-faceted – issues facing the sector.
“We were hoping to see relief on the taxes that are holding small businesses back, like adjusting the threshold with the Employers Health Tax, or a prudent approach for big business that will help them compete globally. Our biggest producers and commodity exporters are paying one of the highest carbon taxes in the world— this isn’t an environment that encourages investment,” Litwin says.
The BC Chamber is the largest and most broadly-based business organization in the province. Representing more than 125 Chambers of Commerce and 36,000 businesses of every size, sector and region of the province, the BC Chamber of Commerce is “To Know What’s on BC’s Mind.”
For more information, contact:
Director, Communications BC Chamber of Commerce
E: [email protected]