CALGARY – The long-term interests of British Columbians would have been better served if the provincial budget had focused more on the strategic investments needed to maintain and grow the BC economy, according to analysis from the Canada West Foundation.
“It’s a shame that budgets tend to be judged on superficial analysis of the immediate bottom line when it is the strategic decisions regarding how money is raised and spent that really matter,” argues Canada West Foundation CEO Dylan Jones. “The BC budget will help address skills training gaps in the province but it is going in the wrong direction with a tax mix that will undermine economic growth,” adds Jones.
On the positive side, the Foundation’s post-budget analysis points to several new investments to expand education and skills training capacity, many of which are clearly intended to develop the workforce necessary to build the province’s natural gas and LNG infrastructure.
On the negative side, increases to the corporate tax rate, the return of the PST and adjustments to natural gas royalties will affect business and could put resource development at risk. “In isolation, the tax measures in the budget do not threaten the long-term competitiveness of the BC economy. Together, however, the impact adds up,” notes the Foundation’s Senior Economist Michael Holden. “ In particular, the combination of the PST, the corporate tax rate increase and changes to the royalty regime all affect the natural gas industry, which is facing the additional challenge of trying to turn a profit in the face of near-historic low prices,” adds Holden.
More detailed analysis of the BC budget can be found here.
Canada West Foundation is the only think tank dedicated to being the objective, non-partisan voice for issues of vital concern to Western Canadians. For over 40 years, through its research and commentary, the Foundation has contributed to better government decisions and a stronger Canadian economy.