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

Addition of a refrigerator and freezers warms the hearts of food bank volunteers

Harvest House the recipient of much-need appliances after grant application acceptance

We need more treatment placements for addicts

Harm reduction is an essential, stop gap measure

AAPs the best way to prevent defeat

Project in complete error and should be paid for by the Feds, Province

VIDEO: Internet famous Yukon-based bhangra dancer explores Vancouver Island

Gurdeep Pandher spreads joy through dance, forms cross-cultural connections amid pandemic

Five new handyDART buses serving Cowichan

Buses to replace older vehicles being removed from the fleet

QUIZ: Do you know the truth?

In what has been described as a post-truth era, how much do you know about truth and lies?

Simon Cowell breaks his back falling from electric bike

Incident happened at his home in California

Unofficial holidays: the weird and wonderful things people celebrate around the world

On any given day of the year, there are several strange, silly or serious holidays to observe

Missing teen visiting Courtenay found safe

She had last been seen going for a walk on Aug. 6

Moving on: Tanev scores 11 seconds into OT as Canucks oust Wild

Vancouver beats Minnesota 5-4 to move into first round of NHL playoffs

Fitness non-profit challenges citizens to invent a game to be physically active

The campaign was launched after a study showed only 4.8 per cent of children and youths in Canada met required standards of the 24-hour movement guidelines

Gene editing debate takes root with organic broccoli, new UBC research shows

Broccoli is one of the best-known vegetables with origins in this scientific haze

VIDEO: U.S. Air Force pilot does fly-by for B.C. son amid COVID border separation

Sky-high father-son visit plays out over White Rock Pier

3 Vancouver police officers test positive for COVID after responding to large party

Union president says other officers are self-isolating due to possible exposure

Most Read