The Chartered Accountants of BC recently made recommendations to the provincial government’s Select Standing Committee on Finance and Government Services that focused on reducing the regulatory burden on business, restoring clarity to B.C.’s tax regime, and supporting economic diversification throughout the province. If implemented, these initiatives will help businesses manage costs and stay competitive, two things that are vitally important in the face of on-going global economic uncertainty.
Competing layers of red tape weaken the Canadian economy and result in lost investment opportunities and weakened productivity. To that end, BC’s CAs recommend that the government continue their efforts in creating a streamlined, provincial regulatory regime that focuses on eliminating redundant processes overseen by multiple levels of government.
For example, B.C.’s Mobile Business Licence program makes inter-jurisdictional business easier—which is crucial in our province where many communities, in both rural and urban areas, exists in tight clusters and are economically linked. Expansion of this program, especially into the lower mainland where the majority of the province’s businesses are registered, should be a priority for government.
On the issue of taxation, with the reinstatement of the PST, it is imperative that the government works to ensure clarity in B.C.’s tax policies, while concurrently maintaining the province’s competitive advantage. While the consolidated plain-language PST legislation that was introduced in May made several important changes that will make administration of the tax easier for businesses, it is the still unreleased PST regulations that will spell out exactly how this tax will impact the economy.
Further, the government should consider expanding tax exemptions for the manufacturing, mining, and forestry sectors. These industries are vital to B.C.’s economic health and are a major driver of growth in the province. Not doing so will make capital investment more expensive and will dampen innovation and productivity.
Finally, a provincial economic diversification strategy would benefits B.C.’s resource-based communities and help cushion them from the boom bust cycles of resource markets. This in turn will result in greater overall economic stability for the entire province.
Provincial initiatives such as the Local Government Act, Official Community Plans, RuralBC, and the Northern Development Initiative Trust are already in place, providing smaller towns and local governments with the flexibility and resources to respond to the different needs and changing circumstances of their communities. Looking forward, the province should continue to support these and other diversification projects.
In this time of economic volatility, it is crucial that our provincial government ensure B.C.’s businesses have a strong regulatory regime that is transparent, competitive, and efficient, and better positions the province to continue attracting investment. Maintaining a competitive tax structure will strengthen B.C.’s economy, and in turn support vital public services, while initiatives that provide for a stable, diverse economy will allow our business community to thrive and keep our citizens gainfully employed.
* Richard Rees is the Chief Executive Officer of the Institute of Chartered Accountants of British Columbia.