CPABC in Focus November/December 2016 | Page 20
A supportive tax and regulatory environment
Government policy plays an important role in attracting and retaining
corporate head offices. For the high-tech sector, a desirable climate
would have fewer regulatory hurdles, a competitive tax system, increased
government spending on high-tech research and development, better
business support, and increased investment in an education system
that produces workers with the skills needed to meet the requirements
of a rapidly changing work environment.
One recent initiative designed to attract more head offices is HQ
Vancouver, an investment partnership created by the federal government, the provincial government, and the Business Council of British
Columbia. The partnership was established with a mandate to promote
Vancouver and BC as strategic locations for head offices. By June
2016, HQ Vancouver had successfully recruited seven companies, six
of which are high-tech.11
Unfortunately, however, our current tax structure may be a hindrance
to the positive efforts of HQ Vancouver. At 26.1%, Canada has one of
the highest corporate income tax rates in the world, ranking 15th
among all jurisdictions monitored by the Organisation for Economic
Co-opera tion and Development.12 And although the BC government
offers an array of investment tax credits, our province has the secondhighest marginal effective tax rate (METR) in Canada, making it
expensive for businesses to invest in inputs, such as equipment. At
27.5%, BC’s METR is lower than that of the US (35.4%), but it’s still
higher than those of most other countries, including high-tech jurisdictions like Germany and the United Kingdom.13
A good pool of talent
An ample supply of qualified talent is a requirement for any jurisdiction
that wants to attract head offices. This is especially true in the high-tech
sector, which relies on the creativity and unique skills of its workers.
The high-tech labour market is already experiencing a shortage of
workers in fields that require education in science, technology, engineering, and math, and that shortage is expected to worsen over the
next decade. It is expected that there will be 70,000 job openings in
technology and science by 2024,14 but research indicates that there
won’t be anywhere near enough graduates to fill these positions.15
HQ Vancouver, personal communication, June 23, 2016.
11
Tax Foundation, OECD Corporate Income Tax Rates, 1981-2013.
12
Kevin Milligan, Fiscal Options for Building a Prosperous British
13
Columbia, July 2016. Commissioned by the Business Council of
British Columbia.
The following areas are expected to account for almost half of these
14
70,000 job openings: computer systems design and related
services; architectural, engineering, and related services, and
telecommunications.
Work BC, British Columbia 2024 Labour Market Outlook, October
15
2015. The Labour Market Outlook report defines technology and
science occupations based on the definitions of Canada’s National
Occupational Classification and includes positions in the high-tech
and resource sectors.
Instantly thrilling.
The all-new C-Class Coupe. Total price starts at $51,160.*
CPABC members receive a fleet discount. For more information, call Randall DesBrisay at 604-351-5290 or email [email protected]
Mercedes-Benz Vancouver
550 Terminal Avenue, Vancouver | D#6276
Mercedes-Benz Boundary
3550 Lougheed Highway, Vancouver | D#6279
Mercedes-Benz North Vancouver
1375 Marine Drive, North Vancouver | D#6277
Mercedes-Benz Richmond
5691 Parkwood Way, Richmond | D#6278
©2016 Mercedes-Benz Canada Inc. Shown above is the 2017 C 300 4MATIC™ Coupe with optional Premium package and Sport package. MSRP of advertised 2017 C 300 4MATIC™ Coupe is $48,100. *Total price of $51,160,
includes freight/PDI of $2,295, dealer admin fee of $595, air-conditioning levy of $100, PPSA up to $45.48 and a $25.00 fee covering EHF tires, filters and batteries. Vehicle options, fees and taxes extra. Vehicle license,
insurance, and registration are extra. Dealer may lease or finance for less. Offer may change without notice. Visit a Mercedes-Benz Vancouver Retail Group dealer for details or call 1-855-544-6490.