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Provincial Government Introduces Legislation to Implement Premiers 10 point economic plan

As the Provincial Legislature reconvened yesterday the province tabled Bill 45 – Economic Incentive and Stabilization Statutes Amendment Act, 2008.

This substantive bill contained a range of legislative amendments that will implement the Premier’s economic plan, unveiled on October 22, 2008. These amendments are:

1. Accelerated tax relief for small business – Income Tax Act – Reduce the small business income tax rate to 2.5 per cent, effective Dec. 1, 2008. Combined with the reduction in July from 4.5 per cent to 3.5 per cent, these tax cuts will inject an additional $146 million into B.C. small businesses over three years.
2. Industrial property tax credit – School Act – Introduce a 50 per cent provincial industrial property tax credit for major industrial and light industrial properties (Class 4 and 5) for the 2009 and subsequent tax years, helping B.C.’s crucial industries remain competitive, while maintaining revenue to local governments.
3. Unlimited deposit insurance for credit unions – Financial Institutions Act – Extend the current $100,000 coverage to unlimited deposit protection for all depositors in B.C. credit unions and enhance supervisory powers, bringing B.C. in line with other western provinces.
4. Accelerated, retroactive personal income tax cut – Income Tax Act – Reduce personal income tax by five per cent, retroactive to Jan. 1, 2008. This includes the two per cent tax cut that took effect July 1 of this year, as well as the planned three per cent reduction that was to take effect Jan. 1, 2009. This amendment will put an additional $144 million in the pockets of British Columbians.
5. Property assessment roll adjustments – Assessment Act – For roughly 90 per cent of properties, 2009 property assessments will automatically reflect a property’s market value as of July 1, 2007 or July 1, 2008, whichever is lower.  This will include residential properties. Changes in a property’s physical condition or use will be taken into account.
6. Financial hardship property tax deferment program – Land Tax Deferment Act – Implement a program allowing British Columbians facing financial hardship related to current economic conditions and with at least 15 per cent equity in their homes to defer their 2009 and 2010 property taxes.
7. Protection of RRSPs from creditors – Court Order Enforcement Act, Pension Benefits Standards Act and Law and Equity Act – Protect registered retirement savings plans, other similar registered plans and additional voluntary contributions made to pensions from seizure by creditors. There are also amendments to the Law and Equity Act in anticipation of the new tax free savings account created by the federal government.

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BC Chamber Perspective

The Chamber believes that in these troubling economic times the approach taken by the Provincial Government is balanced, prudent and a responsible approach to ensuring BC is well positioned to weather the global economic situation that is impacting all open, trading economies.

With the passage of this Bill, BC will enjoy the lowest personal (on the first $111,000 of personal income), small business, and corporate tax rates in Canada by 2011. That is worth repeating, BC will have the lowest rates in Canada by 2011.

The Chamber further believes that this Bill, combined with a commitment to accelerate infrastructure spending and not to enter deficits sets a strong leadership role in these difficult times.  Allowing businesses to invest in their future by reducing their tax burden is the best long term investment in our economic prosperity.

When combined with the government’s commitment to an ongoing dialogue with British Columbians on how we can enhance our competitiveness and productivity, the Chamber believes government must be commended for these measures.

We will be urging all Members of the Legislative Assembly to support this Bill to ensure that business is provided the tools to invest in their future.