BCBC In The News
Vancouver Sun: Tax breaks that target small business hurt the economy more than they help
The big tax breaks that the feds and the provinces give to small business retard economic growth more than they foster it, says a new study from C.D. Howe Institute.
The study cites previous research suggesting that if small businesses are able to duck taxes, the cost of adding this amount to the load carried by other businesses or citizens could create a net loss to the economy. And the total amount of tax revenue lost to the federal provincial treasuries because some businesses choose slower growth over much higher tax rates was estimated to be $375 million a year — not huge, but significant.
This amount is made more significant, however, in the light of an analysis done last year by Jock Finlayson of the B.C. Business Council. He nailed down what ought to be obvious to policy-makers — that not all businesses are created equal.
For example, 55 per cent of B.C.’s businesses — all of which get major tax breaks — employ only their owners. The real job creators are the companies that grow to at least medium-size, if not large. Indeed, fewer than 10,000 businesses out of the nearly 400,000 in B.C. create 36 per cent of all jobs.
This reinforces the Howe analysts’ point that it’s better for the economy to spread business tax breaks among companies of all sizes.
BC Business: The #BCBiz Daily B.C.'s billion-dollar underground economy
B.C.’s underground economy is the third largest in Canada according to a recent Statistics Canada report. While this $5.9-billion industry may seem substantial when compared to other provinces, these figures may in fact be low. "The underground economy (UE) is a complex subject," writes Jock Finlayson of the Business Council of B.C. "Unsurprisingly, it is hard to measure transactions that are unreported, deliberately hidden, and/or undertaken in the 'shadows.'" As for the latter, the report explains: "For the purpose of this study, some illegal activities, such as those related to drugs and prostitution, have been excluded."
Vancouver Sun Editorial: Population changes pose policy challenges
Demographic projections for B.C. indicate that policy-makers need to start preparing now for several inevitable population shifts.
According to a new Business Council of B.C. report, a number of potentially problematic trends will soon become apparent.
B.C.’s population growth will be moderating in years to come, making economic growth tougher to achieve in the absence of significant, and alas unlikely, productivity gains.
The province also is poised to grow older and more urbanized, with smaller centres outside four key communities — Victoria, Vancouver, Abbotsford and Kelowna — finding it increasingly difficult to find workers.
By 2035, B.C. will be home to one senior for every two working-aged people.
The business council describes this stunning age shift as “an extraordinary and unprecedented development” which will have serious implications for government tax revenues and for the labour force. Seniors retire. They tend to pay less tax and consume more health care resources.
Troy Media: Vancouver needs to add head offices
[Excerpt] The Business Council of British Columbia (BCBC) is taking positive steps to attract Asian corporations to locate their head offices in the Vancouver area. The Council is providing funding and in-kind support valued at $1,221,000 - the Federal Government, through Western Economic Diversification Canada, is providing funding of $1,951,750 and the Provincial Ministry of International Trade is providing both funding and in-kind support valued at $3,385,250 - into its HQ Vancouver campaign, which was launched last February. This initiative puts Vancouver in competition with other cities around the world that are competing to get these and other firms and the benefits that come with them.
Business in Vancouver: India's sleeping economic tiger will take time to awaken
[Excerpt] But while B.C. business leaders and economists say India’s economic growth potential is impressive, it’s no China, and the growth of business opportunities in India will grow at a much slower pace.
“India is more about the future than the present,” said Jock Finlayson, executive vice-president and chief policy officer for the Business Council of British Columbia. “I think there is a potential and it’s a huge market. I think commerce with India will grow, but it’s going to grow slowly.
Kamloops This Week: Seniors set to dominate population
The city and region need to gear up for a decline in population growth, as well as a future in which the area has one adult over 65 for every two adults in the workforce.
A report from B.C. Business Council released this week found the province’s population increase is slowing from robust growth of the 1980s and 1990s. The report details a slowing in population growth that reached 2.6 per cent a year in the early 1990s to less than one per cent today.
Author Ken Peacock said Kamloops shares some urban aspects with those core areas and can expect to attract northerners looking for warmer climes, as well as Greater Vancouver residents seeking lower housing prices and an end to gridlock commutes.
Vancouver Sun, Editorial: Strong Alberta remains crucial to Western Canada
[Excerpt] An NDP government is bound to create a degree of uncertainty for business in Alberta, with a watering down anticipated of the so-called “Alberta Advantage.” Notley has pledged to raise provincial corporate taxes to 12 per cent, the same level as in B.C., and introduce a more progressive system of income taxes that would increase the revenue take from top earners.
An NDP government also is expected to review royalty rates for energy companies, strengthen environmental protections and encourage more refinery capacity in the province.
All this, says Business Council of B.C. president and CEO Greg D’Avignon, will probably result in more capital investment and workers coming to B.C. which would increase this province’s labour pool, reducing labour costs.
Business in Vancouver: What does Alberta's orange crush mean for BC?
[Excerpt] Greg D’Avignon, president and CEO of the Business Council of British Columbia, is concerned that Notley’s promise to raise corporate income tax as well as taxes on high income earners will dampen Alberta’s already-shaky economy.
"Companies, when they make investment decisions, look at a myriad of things and corporate tax is one of them,” he said.
“When you’re bringing in top talent and their job is to create wealth, [higher income taxes] can be a headwind against attracting that talent.”
Vancouver Sun: Get ready for an older population: report
If you’re a senior looking for a great place to play endless rounds of golf or games of bridge through your golden years, then the Okanagan Valley’s the place to be.
But if you’re a young parent and want a place where your kids will have plenty of friends and outdoor pursuits, you may choose to head up the Sea to Sky Highway to Squamish.
Those are two of the conclusions in a Business Council of B.C. report that found, among other things, that B.C.’s population growth has not only slowed, averaging 0.9 per cent annually, but that the number of people aged 65 and over is growing at four times the rate of the number of working-aged people (25 to 64), “an extraordinary and unprecedented development,” the study said.
Business in Vancouver: Role reversal? China's F-Pacific expands manufacturing, headquarters to Vancouver
[Excerpt] HQ Vancouver — a joint initiative between Ottawa, Victoria and the Business Council of B.C. (BCBC) aimed at luring Asian companies to Vancouver — worked with CFONSG to bring F-Pacific’s new regional office to the West Coast.
This marks the first time since HQ Vancouver’s creation in February that the organization has drawn a company from Asia to Vancouver.
Conservative MP for Richmond Alice Wong, Minister of State for Seniors, said at the announcement that F-Pacific’s decision to move to Vancouver reflects the strengths of the HQ Vancouver initiative.
Over the next three years, Victoria is contributing $3.4 million to HQ Vancouver, while Ottawa is contributing $1.9 million and the BCBC is providing $1.2 million in funding and in-kind support.
Vancouver Sun: Chinese fibre-optic firm to open North American head office in Vancouver
[Excerpt] Yuen Pau Woo, president of HQ Vancouver, called securing the F-Pacific investment a major win, which gives the province a manufacturing foothold in an emerging sector as China Fiber Optic seeks to expand its sales in North America.
HQ Vancouver is a public-private effort funded by the Canadian and B.C. Governments, along with the Business Council of B.C., to encourage medium-to-large sized Asian corporations to establish North American head offices in B.C.
Vancouver Sun: Chinese Manufacturer sets up BC plant for fibre-optic components
[Excerpt] The deal to bring F-Pacific to B.C. was two years in the making, and for the recently formed HQ Vancouver initiative aimed at attracting more Asia-based businesses to the province it represents an early success.
“The short-term significance is the establishment of a real facility that will employ hundreds of people and produce hundreds of millions of dollars of exports,” said Vancouver HQ president Yuen Pau Woo, formerly CEO of the Asia Pacific Foundation of Canada.
“That’s not trivial at all in a time when global economic conditions are tough,” Woo said, but the longer term significance is in F-Pacific’s ambitions to expand in North America.
While North America has a lot of fibre-optic trunk networks, Woo said the continent remains relatively under-served when it comes to fibre-optic connections directly to households.
“If (F-Pacific) can penetrate the North American market working with Telus, Rogers, Bell and Sprint, and all the other suppliers, imagine the kind of expansion we could see in North America.”
For Woo, who heads an initiative funded by Canada, B.C. and the Business Council of B.C., F-Pacific is something of a beacon for other Asian companies evaluating this province as a viable beachhead for North American operations.
“Location, business environment, IP protection, political stability, skilled labour force — we’ve got it all,” Woo said. “And if it’s true for F-Pacific, it’s true for other companies that want to locate here.”
Journal of Commerce: Experts predict growth at inaugural outlook seminar
[Excerpt] Ken Peacock, the chief economist and vice president of the Business Council of British Columbia, began by calling the world economy a "serial disappointment."
He said the U.S. is gaining momentum, which will help Canada and British Columbia, but questioned if this would continue.
Peacock said the Eurozone is barely growing, Japan is faltering and China is decelerating, which may affect the province.
He noted that B.C. has huge potential with billions of dollars in proposed energy projects – the only catch is getting them past the finish line.
Vancouver Sun, Barbara Yaffe: BC's export base remains heavily dependent on resources
The value of B.C.’s merchandise exports is at an all-time high, but the province cannot keep counting on the meteoric growth it has recently experienced in its trade with China.
Since 2004, goods exports to China have grown by ”an astonishing 420 per cent,” notes Ken Peacock, chief economist at the Business Council of B.C.
As of last year, the province was shipping 40 per cent of its exports to Pacific Rim countries, up from 25 per cent a decade ago. But that party may be over.
In a new report on B.C. trade, Peacock is predicting that “strong growth in exports to China will not go on indefinitely and ... are more likely to expand at a more subdued pace as that economy transitions toward more domestic consumption rather than export-led growth.”
That does not mean, however, that trade volumes overall are about to stagnate in B.C.
Saanich News: Victoria MP sees little help for families in federal budget
[Excerpt] Business Council of B.C. president Greg D’Avignon said balancing the national budget, investing in transit and providing investment incentives for industries such as liquefied natural gas and forestry will help offset the effects of a slump in oil prices and weak commodity markets.
The Hill Times: Ministers, PM target Vancouver, Winnipeg, Kitchener in post-budget tour: all about holding seats, say strategists
[Excerpt] So far, the highest concentration of budget announcements has been in the greater Vancouver area. National Revenue Minister Kerry Lynne Findlay (Delta-Richmond East, B.C.) went to Vancouver, Surrey and Delta on Wednesday, Thursday and Friday to highlight the budget, and Industry Minister James Moore (Port Moody-Westwood-Port Coquitlam, B.C.) delivered a speech on Wednesday to the Business Council of British Columbia.
Vancouver Sun, Editorial: Fast-growing India offers opportunities for B.C.
Indian Prime Minister Narendra Modi’s visit to the Lower Mainland last week drew attention to potential benefits from stronger links between B.C. and the world’s fastest-growing major economy.
India’s GDP grew by 7.2 per cent last year. This year the developing democracy, with an expanding middle class and vast population of young people, is expected to expand 7.5 per cent, surpassing that of China.
Yet a new report from the Business Council of B.C. reveals only 1.6 per cent of this province’s merchandise exports go to India (mainly copper, coal, wood pulp and newsprint).
By comparison, the Chinese market accounts for 18 per cent of our goods exports, and Japan 10.2 per cent.
Journal of Commerce Blog: Ken Peacock of the Business Council of British Columbia at the ICBA Industry Outlook
Ken Peacock, the chief economist and vice president of the Business Council of British Columbia addressed an audience of industry leaders at the Independent Contractors and Businesses Association (ICBA) Industry Outlook held April 23 in Burnaby, British Columbia.
Peacock began by calling the world economy a "serial disappointment." The United States is gaining momentum, which will help Canada and British Columbia, but questioned if this would continue.
Peacock said the Eurozone is barely growing, Japan is faltering, and China is decelerating, which may affect British Columbia.
The big macro-economic variables are low interest rates and the exchange rate. The exchange rate is good for exports, but not great for consumers, who will feel the cross-border pinch.
But the depreciating exchange rate does improve Canada's competitiveness, though "it's not a long term strategy," Peacock said.
Vancouver Sun, Editorial: Tory budget disappoints on infrastructure
The Harper government’s budget, tabled on Tuesday, bypassed crucial infrastructure needs of cities like Vancouver in favour of putting cash quickly and directly into the hands of targeted groups of voters in an election year.
The government did not have much room to manoeuvre, balancing its budget with a relatively modest $1.4-billion surplus for contingencies.
The Canadian Press (News 1130): B.C. will get infrastructure cash despite vote outcome in Metro Vancouver: feds
Industry Minister James Moore says British Columbia will get its fair share of federal infrastructure funding regardless of the outcome of a Metro Vancouver transit tax vote.
Speaking to a gathering of business leaders, Moore said the federal government would provide the province with promised investment dollars whether or not voters approve the historic transit plebiscite.
A proposed $7.5-billion public transportation overhaul over 10 years would include projects such as an upgraded rapid-transit system, a new bridge and additional buses.
“We know that our cities are getting more dense and more congested,” said Moore, who was in Vancouver for a meeting with members of the B.C. Business Council.