CPABC in Focus November/December 2016 | Page 7

NOTES & NEWS CPABC Makes Recommendations to BC Government O Increasing the number of head offices in BC According to research conducted for the latest BC Check-Up report, head offices contribute to the growth of local small businesses and to the creation of industry clusters (see summary on pages 18-21). Currently, there is an emergence of high-tech corporate offices in Metro Vancouver, which is home to three of Canada’s most notable tech companies: Slack, Hootsuite, and Avigilon. Vancouver is also home to international companies such as Microsoft, Sony Pictures Imageworks, and Amazon. This is a good start, but BC is still home to only 7.5% of all head offices in Canada.3 CPABC recommendation: • Continue to support initiatives like HQ Vancouver (see page 20) to promote Metro Vancouver as an urban head-office city, and consider expanding HQ Vancouver into BC’s other major urban centres and/or industrial hubs. n September 19, Richard Rees, FCPA, FCA, president & CEO of CPABC, and Heather Banham, FCPA, FCGA, first vicechair of the CPABC board, presented recommendations to the province’s Select Standing Committee on Finance and Government Services on behalf of the profession. CPABC’s recommendations, which are designed to encourage business productivity in BC, focused on four policy areas: implementing input tax credits, increasing the skilled talent pool, increasing the number of head offices in BC, and encouraging small businesses to grow. Implementing input tax credits The reintroduction of the Provincial Sales Tax (PST) in 2013 has put BC at risk of falling further behind other western provinces and US states in terms of business productivity. According to a recent paper commissioned by the Business Council of British Columbia, the application of the PST at all points along the supply chain and in the final sales price has had a cascading effect—one that has led to a cost increase of approximately 10% compared to when the Harmonized Sales Tax was in place.1 CPABC recommendation: • Implement input tax credits to stimulate business capital investment. Encouraging small businesses to grow Small businesses made up 98% of all businesses in BC in 2014.4 The government has long recognized the importance of small businesses to the economy and has introduced various measures to support them, including a low corporate tax rate. However, while this low corporate tax rate minimizes the tax burden, i