In the same year that the business community expects to absorb a $1.7-billion hit from the return to the provincial sales tax, the B.C. Liberal government is piling on with $290-million in additional corporate taxes.
“It’s disappointing,” said John Winter, president of the B.C. Chamber of Commerce.
The corporate tax rate is set to rise by one percentage point on April 1, to 11 per cent, which is expected to bring in an additional $205-million in the coming year. It’s the first time the B.C. Liberals have asked the business community to pay a higher rate since taking power a dozen years ago, but Mr. Winter said this comes at a difficult time.
“Coming back to the PST is going to be the single largest tax increase we’ve ever had on business and it’s disappointing there is nothing here to mitigate against that,” he said. “There is nothing in here to address the competitive nature of our economy that will create the kind of growth that is needed to pay the bills.”
British Columbia will still have one of the lowest corporate tax rates in the country, after Alberta and New Brunswick.
And the government is adjusting the royalties on deep-well natural gas “so that revenues flow into provincial coffers sooner.” That measure is expected to raise $53-million each year.
Although the small business tax rate does not change, some measures could capture smaller corporate entities. Light industry will see part of an existing tax break on property taxes clawed back, for a total increase of $32-million. As well, medical service premiums are rising on January 1, and business pays a large share of that tab.