With a mission to inform, empower, celebrate and advocate for British Columbia's current and aspiring business leaders, BCBusiness go behind the headlines and bring readers face to face with the key issues and people driving business in B.C.
Issue link: http://digital.canadawide.com/i/1071224
29% 7% 20% 43% 32 BCBUSINESS FEBRUARY 2019 49 percent and 36 percent, respectively, for those who saw it decline and stay the same. Asked what impacts their business, respondents put labour costs, access to labour, provincial regulations, housing costs and pro- vincial taxes at the top of the list. On the question of whether the provincial government generally supports business, only 46 percent said yes—a big drop from 78 percent in 2016. "There's a positive mood out there," says Val Litwin, president and CEO of the BC Chamber of Commerce. "But there's more stress and anxiety in these results in late 2018." Although B.C. is doing well, that could change swiftly, Litwin notes. "One of the indicators of how it can turn on a dime is when the business community is saying, Hey, you know what? It's getting harder to do business here." Dan Baxter, the BC Chamber's director of policy development, government and stakeholder relations, sees the survey results as an omen. "There are a lot of those positives that I think keep businesses right now feeling generally good about their overall ability to suc- ceed," he says. "But now you're starting to see some of the concerns creep in." TAXING QUESTIONS Mike Jacobs doesn't mince words about the new Employer Health Tax for businesses with payrolls over $500,000. "That's a very harsh transference of societal responsibility, in my mind," says the chair and CEO of Emil Anderson Construction. A road builder and civil contractor focused on the southern Interior, with an average of 300 to 400 staff, depending on the season, Kelowna-based Emil Anderson also does land and housing development. The company already pays Medical Services Plan premiums for its road maintenance employees and hourly contributions for its union construction workers, Jacobs says. The new tax replaces MSP in 2020, but until then Kelowna Chamber of Commerce member Emil Anderson will pay both, including EHT of about 2 percent based on payroll and taxable benefits. For the construction and road maintenance divi- sions, the EHT bill for 2019 will be roughly $360,000 and $170,000, respectively. The total MSP tab for those two divisions will be about $110,000. "It's big hit, and I think it's fundamentally wrong that a few businesses will be paying for this, particularly some of us who are going to end up paying twice, and certainly paying way more than what they were before," Jacobs says. Emil Anderson, which gets much of its road work from low-priced tenders with government, will have to factor EHT into those, Jacobs says. "We have to hope, then, that all our competitors add that 2 percent cost in as well." Jacobs dislikes the province's new speculation and vacant home tax, too. Over the past two decades, 20 to 25 percent of customers who bought homes from his company have been Albertans. But now that Canadian citizens and permanent residents purchasing a second home in the Kelowna area must pay a 0.5-percent tax on the assessed value of the property unless they live in it at least six months a year, some Albertans are taking their money to Arizona and elsewhere, Jacobs explains. (For foreign buyers, the speculation and vacant home tax is 2 percent.) "It's really a wealth tax, and that's what this govern- ment seems to be all about, is how do we tax wealth," he says. "It's just a tax grab that will put the brakes on economic growth." Still, Jacobs remains optimistic about his business. CLOUDY FORECAST In its 2018 member survey, the BC Chamber of Commerce asked almost 900 business leaders from through- out the province to describe their company's prospects over the next three to five years. The group expecting business to be in good shape shrank by almost 10 percentage points compared to the previous year 2016 2017 2018 27% 19% 5% 7% 18% 25% 50% 49% VERY GOOD SHAPE GOOD SHAPE ACCEPTABLE SHAPE POOR OR VERY POOR SHAPE ABACUS DATA AND THE BC CHAMBER OF COMMERCE. NUMBERS MAY NOT ADD UP TO 100 DUE TO ROUNDING