B.C. businesses are on the hook for billions associated with government-imposed costs, a report has found.
A Greater Vancouver Board of Trade report, Counting the Costs: Assessing Economic Challenges for Businesses in British Columbia, has identified a significant cost increase for businesses, amounting to nearly $6.5 billion between 2022 and 2024.
These cost increases include the corporate tax rate, the payroll tax imposed just prior to the pandemic, new paid sick leave, and the business portion of the escalating carbon tax.
“Small and medium-sized businesses (SMEs) are disproportionately impacted by higher interest rates and rising costs that are making it incredibly challenging for them to grow and thrive,” said Bridgitte Anderson, Greater Vancouver Board of Trade’s CEO and president.
“The report found that between 2022 and 2024, businesses in B.C. will shoulder an additional $6.5 billion in direct costs imposed by governments as they grapple with what is an already daunting economic outlook.”
The report broke down the cost total as follows:
- Net health taxes $4 billion
- Corporate income tax $1.6 billion
- Paid sick leave $1.2 billion
- Business share of carbon tax $515 million
Businesses are gaining around 873 million in savings related to SME tax rate and PST on non-residential electricity, the report said.
In addition to these costs, there has been a 17 per cent rise in the minimum wage rate from 2019 to 2023, a nearly 10 per cent increase in the top personal tax rate, as well as a new statutory holiday which costs $200 million, and the restoration of the HST, which has cost business $3.7 billion in 2022 alone, according to the report.
The board of trade offered four recommendations to the province to help businesses with these costs:
- Increase the Employer Health Tax threshold for SMEs
- Introduce PST exemptions on business inputs like software and equipment
- Recycle carbon-tax revenues into local tech and emissions-reduction efforts
- Actively seek opportunities to reduce costs for businesses, particularly SMEs
“To foster economic growth and stimulate investment in British Columbia, the provincial government must take action to alleviate the burden on businesses,” Anderson said.
“By implementing these recommended measures, we can create a more competitive and attractive business climate that encourages innovation, entrepreneurship and economic prosperity.”
Amid billions of dollars in increases for B.C. businesses, the Canadian Survey of Business Conditions has found that more than a third of businesses in Metro Vancouver are anticipating a decline in profits in the next quarter due to “economic conditions.”
British Columbians can read the full report online.
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