VICTORIA, Feb. 17 /CNW/ - British Columbia's economy has been hard hit by
the financial and economic crisis that has engulfed the global economy. The
unexpected swiftness and severity of the crisis has driven the economy into
recession. Last year, the economy grew by 1.0%, well below last year's
forecast rate of 2.4%. This year economic activity is expected to contract by
The stimulus of $25 billion in infrastructure spending and other projects
will provide good support for the economy. This additional spending and
reduced tax revenue will result in budget deficits this year and next.
However, the modest deficit of $495 million in 2009/10 and $245 in 2010/11 and
resulting small increase in the public debt burden will not put the province's
AAA credit rating at risk.
The expansion of the small and mid-sized business sector is critical to
future growth and employment opportunities in the province. The key is
investment spending, a significant challenge prior to the financial crisis,
and even more daunting now that the domestic and international economies have
fallen into recession and the profile of recovery is uncertain.
We are pleased the province has accelerated the reduction in the small
business tax rate, resulting in a 2.5% rate this year, and extension of the
mining flow through tax credit to the end of 2009. However, we are
disappointed the budget has not gone further, given fiscal maneuverability, to
introduce further incentives to promote capital investment, such as tax
credits for small companies, wider eligibility beyond mining companies for
flow-through shares, harmonization of the provincial sales tax with the
federal GST and legislative amendments to improve the effectiveness of the
International Financial Centre to attract foreign investment.
The Investment Industry Association of Canada (IIAC) advances the
position of the Canadian investment industry on regulatory and public policy
issues. As the professional association for the industry, IIAC 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, Cell (416) 312-7275, firstname.lastname@example.org