VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 26, 2012) - The new set of recommendations announced earlier this month by the government-appointed Expert Panel on Business Taxation would, if implemented, boost British Columbia to a level playing field with other jurisdictions across the country, but fall short of establishing the province as a world-class destination for manufacturing investment, according to Canadian Manufacturers & Exporters (CME).
While CME welcomes several of the proposals outlined in the report, including policies relating to the collection of the provincial sales tax and the introduction of a refundable investment tax credit for machinery and equipment, it maintains the panel did not go far enough to attract large research and development (R&D) mandates.
"This is definitely a step in the right direction to improve what has historically been one of the most uncertain and uncompetitive tax climates in Canada," explains CME BC Vice President, Peter Jeffrey. "But it's no longer enough to be good; we have to be the best. Economic growth in BC relies heavily of the health of its manufacturers, and we need a system that reflects how important of a sector it is."
In particular, CME is disappointed the panel failed to recommend instituting a larger R&D tax credit. Because the BC tax credit is administered by the Canada Revenue Agency, proposed changes to the federal program will reduce R&D incentives offered by the BC government by more than $11 million, starting in 2016.
CME is now calling on policymakers to raise the tax credit to a minimum 15 per cent.
"We congratulate the panel on its efforts, and now it's up to the provincial government to review and build upon the recommendations," says Jeffrey. "The government needs to work with its partners in industry to ensure the development of a tax regime that helps nurture a prosperous future for both manufacturers and the next generation of British Columbians."