VANCOUVER, B.C. – The Commission on Tax Competitiveness has released a report called: “Improving B.C.’s tax competitiveness” which outlines the effect of B.C.’s PST as well as corporate income tax and non-residential property taxation on competitiveness and economic performance.
The report makes short and long-term recommendations for business tax reform.
Commission chair Bev Dahlby says B.C. businesses have been held back.
“B.C. businesses have historically underinvested in machinery and equipment, holding them back from competing effectively and reducing provincial growth and living standards. Changes to the way we tax machinery, equipment, and key business inputs would help ensure businesses are more competitive, enhance the province’s economic performance, and most importantly, improve incomes and the standard of living.”
The report makes 4 recommendations:
- Exempt business capital expenditure, including machinery and equipment, from PST in the short-term
- Exempt business use of electricity and other energy, software and telecommunications services from PST when there is fiscal capacity to do so
- In the long-term, engage the public in a process to consider and design a made-in-B.C. Value Added Tax
- Introduce a framework within which major investors and municipalities can negotiate long-term property tax arrangements to increase certainty in the short-term
When Energeticcity.ca asked Dahlby about out of province workers from Alberta that come into the province of B.C. and do work but not charge PST, Dahlby says it was addressed in the report.
“It was expressed to us. We had a meeting with an organization that represents municipalities in Northeastern B.C. and they have brought this issue to our attention. So in our report, we do discuss this and mention it as an issue.
We suggest that B.C. might consider adopting the measures that Saskatchewan uses to deal with the same sort of issue with Alberta companies operating in Saskatchewan and not paying the retail sales tax. So it is a bit technical, but there is a part of the report that does deal with that and it suggests Saskatchewan has a mechanism for collecting sales tax, making the contractor liable for the tax.”
The commission was established by the B.C. government in July, to review B.C.’s corporate tax structure, including consulting with organizations, individuals and businesses.
A final report was presented to B.C. Finance Minister Michael de Jong on November 15, 2016. It provided the commission’s analysis, the results of public engagement and the commission’s conclusions and recommendations. The commission received 27 submissions, 59 website responses and held 12 meetings with stakeholder groups.