VICTORIA, Feb. 19 /CNW/ - The B.C. Budget released today provides a
realistic assessment of the province's economic prospects in the near term and
is a judicious mix of fiscal and tax policies to maintain a growing economy
and address environmental challenges. Economic activity in the province has
been severely weakened by the slowdown in the North American economy, the
collapse in the U.S. housing sector and a continued strong Canadian dollar.
The economy faces sector challenges, particularly in the forestry industry.
Inflation-adjusted economic growth is forecast at 2.4% this year, the slowest
pace in five years, and will remain at a moderate pace for the next four
years. The difficult economic outlook demands a disciplined approach to policy
adjustment. The Investment Industry Association of Canada (IIAC) is encouraged
that the B.C. government has recognized the need to provide relief to
businesses facing difficult conditions and ensure continued growth as the
economic environment gradually improves.
"The small and mid-sized business sector in the province accounts for
one-quarter of all employment and a significant share of overall economic
activity. It is the expansion of these local businesses that holds the future
of the province, and will fill the 'head office' gap", said Ian Russell,
President and CEO, IIAC. The reduction in the general corporate tax rate to
10% from 12% in the next two years, and the small business rate cut to 2.5%
from 4.5% in the same period are positive steps. The proposed changes to the
International Financial Activity Act will promote international business
activity in the province through the International Financial Centre, and the
elimination of the capital tax on financial institutions is a positive
Since, the key constraints facing small and mid-sized business are access
to risk capital and the regulatory burden. IIAC would have liked further
incentives for capital-raising for small and mid-sized business - with the
B.C. government pushing Ottawa for lower capital gains tax relief, refundable
R&D tax credits and tax-related flow-through financing vehicles.
The Investment Industry Association of Canada (IIAC), formerly the
industry association arm of the Investment Dealers Association of Canada
(IDA), advances the position of the Canadian investment industry on regulatory
and public policy issues. As the professional association for the industry,
the Investment Industry Association has a mandate to promote efficient, fair
and competitive capital markets for Canada while helping its member firms
across the country succeed in the industry.
For further information:
For further information: Katie O'Dell, Public Affairs Consultant, Tel.
(416) 687-5478, firstname.lastname@example.org