NEW AND INCREASED PROVINCIAL TAXES HURTING BUSINESS AND ECONOMIC GROWTH, INTRODUCTION OF CLEAR TAXATION AND IMPLEMENTATION POLICY (2023)

Issue

Over the past few years, the provincial government has increased existing taxes, or added new taxes, with little or no notification with the business community, or general public. This is causing serious harm to business competitiveness, as well as reducing economic growth and productivity due to less dollars going back into the economy as opposed to provincial general revenue.

Background

At the time of writing, there are 29 new or increased taxes imposed since 2017. (see Table 1 below). The estimated combined cost to the general public, or direct additional cost of doing business, is approximately 18 billion dollars.

While the chamber recognises the need for government to provide services, there is also a need for clear and transparent taxation policy.

The concept of random tax implementation or increase tax implementation creates an unmanageable corporate and personal fiscal planning process. More importantly, the idea of uninformed tax increases are similar to undisclosed implementation of fees in business, which in many industries is illegal.

Examples of illegal non-government fee implementation are fees like additional credit card or debit card fees. By law, the merchant has to disclose the additional fees, before a transaction occurs. In many provinces, these fees have actually been illegal. The B.C. government, at this point, does not have to disclose additional fees or taxes prior to a transaction. In fact, the government implementation of taxes cleverly focuses on taxing situations that the consumer, or business, has no option but to pay, collect and submit the new or increased taxes due to normal consumption, and business activity.

Some examples of new and increased taxes that target business and consumers are: Increase of the property Transfer Tax with an increase of 2% on top of the 3% rate, 2.1% increase on Income tax for income over $150,000, Increase of the Corporate Income Tax to 12%, Netflix Tax expected to generate 11M in extra revenue, Fuel Equalization Tax adding an additional $0.25 cents per litre on fuel imported from Alberta, Increase on PST from 7% to 12% on Fossil-fuel home heating fuel, Used car tax paying the greater of sale vs average price, contributing an additional 30 million and the Online Marketplace Tax which will generate an addition 120M in tax revenue.

It is understood that government will do a “consultation” roadshow to receive short, structured, submissions but there is no evidence on how, or if at all, these submissions are considered in creating fiscal policy.

In an effort to properly come to a solution that benefits all, it would make sense to work with professionals, and experts in all sectors, as well as non-profits, like Chambers of Commerce, and NGO’s that are immediately impacted by tax change policy. It goes without saying that related government agencies, and experts also be at the table. This advisory group should be of manageable size and selected by a nomination of peers. The concept that is unique to this strategy goes beyond mere consultation. In order to be effective, it must also require agreed upon solutions by all parties to ensure the amendments are fair and equitable.

Table 1 - New and Increased Taxes Imposed by the B.C. Government since 2017

THE CHAMBER RECOMMENDS 

That the Provincial Government:

1. Create a template prior to budget announcement and implementation illustrating the surplus or deficit results of forward fiscal years.
2. Consult with the predetermined taxation advisory group, based on business, not for profit and NGO’s as to the current best and most efficient ways to arrive at solutions for shortfall, or abundances.
3. Establish a clear and transparent method of communication for accountability regarding tax changes to the public and business.