Richard Truscott is the Vice-President, B.C. and Alberta, Canadian Federation of Independent Business (Submitted).

COLUMN: Does the B.C. government really want to help the tech industry?

BC needs to be wary of challengers within Canada who are increasing their share of the tech sector

Everyone knows the weight that promises made by politicians hold. Despite saying all the right things, when in office, their actions often do not reflect their words.

A good example is all the talk about bringing well-paying tech jobs to BC’s communities. While the provincial government has talked a big game, their actions to date strike a very different reality. Although Premier Horgan has stated the government “want[s] to grow globally competitive industry clusters and help B.C., companies scale-up” the policies they have pursued do not reflect this goal at all. Rather than spur major tech industry growth in the province, the government’s policies are more likely to repel it.

One example of this disconnect between the words of the government and their actions is the Employers Health Tax (EHT), which came into effect this year. The EHT is a brand new tax on employers in the province, pegged at nearly $2 billion per year in perpetuity. Meanwhile, the government has promised to invest a measly $100 million into the tech industry by 2020.

At the same time the EHT is coming into effect, the Canada Pension Plan (CPP) rates on employers are increasing, a policy move the BC government supported. Together, these two taxes represent a significant rise in the tax burden shouldered by employers.

What will all of this new tax mean for actual tech firms?

Take a tech firm in BC which has 15 employees who earn the average salary of $1,690 per week in the industry. That firm will now face over $40,000 in brand new payroll taxes from the EHT and the CPP when fully phased in. If that firm wanted to hire a new employee, the new taxes will increase the cost by about $3,700 a year on top of all the other existing payroll taxes already in place. This does not sound like a recipe to help a tech firm to grow.

For BC to be competitive in attracting tech firms into the province, the taxes paid in the province cannot be higher than what the same firms would pay in comparable jurisdictions.

BC needs to be wary of challengers within Canada who are increasing their share of the tech sector. While BC is increasing the tax load for businesses in the province, Alberta and Ontario are both going the other way and are reducing taxes. If the BC government really wants to attract tech companies from outside or help those inside the province grow, they need to take a hard look at some of these punitive payroll policies being put in place.

This is something insiders in the tech industry are also noticing. In April, when the provincial government refused to work with the federal government to continue funding “Cube”, a tech firm incubator in Vancouver, the incubator was forced to shut its doors to the firms who relied on it. This led industry insiders to call out the provincial government for making it harder for new firms to bring their ideas to fruition.

Unless we start seeing changes, these policies will be a driving force for some firms to choose to locate their businesses elsewhere. Clearly, someone needs to tell the BC government that their policy actions speak louder than their words.

Richard Truscott is the B.C. and Alberta vice-president at the Canadian Federation of Independent Business

signature

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

City of Campbell River opening more public washrooms

It’s also turning on water for community gardens

ICET emergency business relief coming

Two programs will be offered for businesses starting in April

Strathcona Regional District initiative helps get food to the vulnerable

Initiative will help fund set up and operations of services

New transit operations and maintenance facility opens in Campbell River

The Campbell River Transit System is now operating out of its new… Continue reading

Trudeau rejects mandatory stay-at-home order for now; COVID deaths up

The virus has now infected more than 10,000 Canadians and cost 130 their lives

Campbell River community COVID-19 agencies, services and resources list

The list outlines status of social agencies in the community

B.C. health care workers gain access to virtual health care options

During COVID-19 many clinics have closed, leaving health care workers with nowhere to turn

Tax collectors, auditors to help field ‘historic’ numbers of benefit-seeking callers

‘If you work for CRA, people think we are just there to take money from your pockets.’

Family uses social media to help truckers find places to eat during pandemic

Restaurants Serving Drivers in Western Canada seeks to provide a list of places open for drivers

Advocates sound alarm over COVID-19 limiting access to contraceptives, abortion

The COVID-19 outbreak has hit sexual-health services from almost every angle

Cowichan couple won’t self-isolate after returning from overseas

New law requires 14 days of self-isolation when returning to Canada

B.C. health officer says homemade masks may prevent spread of COVID-19 to others

Practising physical distancing, frequent hand washing and resisting touching your face are proven methods

Most Read