Annual ranking lists B.C. as least tax competitive province
CALGARY, Sept. 12, 2012 /CNW/ - British Columbia has been named the least tax competitive Canadian province in the Annual Tax Competitiveness Ranking by The School of Public Policy. Report authors Jack Mintz and Duanjie Chen analyzed the business tax regimes of the 10 provinces and ranked them based on their Marginal Effective Tax Rate (METR) on capital investment.
The authors argue that B.C.'s decision to renege on the HST is having a dramatic impact on the province's ability to attract investment and grow the economy. While de-harmonization will not take place until 2014, Mintz and Chen account for the legislated change in their report.
"For 2012, the harmonized sales tax in British Columbia is still in the form of a VAT that has no impact on the cost of capital, and the associated METR is 17.4 percent," they write. "For 2014, when the reversal of HST to the retail sales tax is implemented, the METR in British Columbia will be 27.7 percent — an increase of more than 10 percentage points!"
As a comparison, neighbouring Alberta has a METR of 17.9 percent and New Brunswick has the lowest METR at 4.6 percent. Canada's national average is 19.9 percent.
The report also compares each province against all OECD countries and finds that B.C. trails only the U.S., France, Japan and Korea in terms of tax competitiveness.
The report can be found at www.policyschool.ucalgary.ca/publications
SOURCE: The School of Public Policy - University of CalgaryFor further information: