First BC Liberal promises of the campaign
Posted April 7, 2009 by Sacha Peter - Link
Category: BC Liberals, Economy
Comments (4)
Premier Gordon Campbell today announced three tax measures. These measures cannot be enacted by the government without legislation, so this is clearly the first BC Liberal promise of the election campaign:
1. The government will increase the training tax credit from $2,000 to $4,000 of wages paid for apprentices in training. How this program works is described here, but essentially it means that a company hiring an apprentice will receive 10% of the salaries/benefits paid to that worker back in the form of a tax refund. So if you hired somebody and they were paid $15,000 then the company would receive a $1,500 refundable tax credit. This promise will increase the salary that can be paid for this credit from $20,000 to $40,000.
Note that the phraseology of “tax credit” is somewhat ambiguous – when the Federal government announced that they will give a “tax credit” for monthly transit pass purchases, when you pay $73 for a 1-zone bus pass, you do not receive $73 back from the CRA – instead you receive a $73 tax credit, which is worth $10.95 off your federal taxes (assuming you actually owe over $10.95 in federal taxes to offset the tax credit).
The tax credit for the training tax credit is for the full amount, plus it is refundable, so even if your company is losing money and not paying income taxes, you will still receive a refund for 10% of the salaries paid per apprentice, up to $2,000 (and $4,000 assuming the government can legislate this in).
The government says this will be effective July 1, 2009, but assuming they are re-elected, will likely have to retroactively set this date whenever the legislature goes back into session.
2. Promised that the small business income tax will be reduced to the “lowest in Canada” by April 1, 2012, to be paid for by carbon tax revenues – right now the small business income tax rate is 2.5%, and the lowest in Canada is currently in Manitoba at 1%.
I remember asking the provincial government in 2007 what a one percent reduction in the small business income tax rate was and got the following answer:
Gross tax revenue (gross of tax credits) from the small business rate (4.5 percent) is estimated at $268 million in 2005/06 and $297 million in 2006/07.
It is estimated that a one percent change in the small business rate would have a $72 million revenue impact.
It is interesting how they linked this tax decrease to “carbon tax revenues”, as they could have earmarked any revenue reduction measure to the carbon tax.
Assuming that the numbers from 2007 are relatively consistent today and assuming the targeted rate is 1.0%, this measure would reduce potential revenues by roughly $110 million per year, offset by the positive economic impact of people moving capital into BC to do business in BC.
3. Raising the small business income threshold from $400,000 to $500,000 on January 1, 2010. This harmonizes what the definition for tax purposes is of a “small business” with the Federal government, which increased the threshold from $400,000 to $500,000 in their 2009 budget.
Politically this is playing to the BC Liberal base and it will be tough to attack from the NDP perspective because it involves small businesses and not large businesses.
YOUR GAY
To GORDON CAMPBELL –
Why should we believe anything Campbell promises. He doesn’t keep his word. He sure knows how to put the province in debt though. Billions and billions in debt. Who’s going to pay for all this spending, hotshot.He’s not a leader, he’s a dictator. He’s an expensive joke. N.D.P. will get my vote this time. Sorry Gordo.
How can Gordon get into the States with a criminal record. I got picked up for drunk driving over 30 yrs.
ago, and they won’t let me accross the border. One law for the rich and one for the poor I guess. Discusting.
Tony,
The NDP spends more money, they are far bigger spenders than the BC Liberals. We would be in huge debt under Carole James. They have no one very outstanding with experience in Economics or Finance, and lack people from those areas but make up in union hacks from pretty much the same sectors. They have no diversified candidates or members, thus they are prone to horrible financial management. Additionally, it is the same old people who would get cabinet in a NDP government as last time, the same old people, the same old mistakes.
At least I can trust the economic record of the BC Liberals over the past eight years, and despite this WORLDWIDE ECONOMIC RECESSION, Canada is leading the world, and B.C. is one of the leading provinces in Canada right now. Sure we will get hit hard with numbers and such, but relative to other provinces we are overall doing good and were a bit behind them in getting hit from the recession. So we are being hit now, but overall we are doing quite well and better than most other provinces. This means on the world stage we are doing better than many other regions around the world.
ss have you been on mars for the last week, bc is leading the country in lost jobs, its right wing policies that got us in this mess, you probably think George bush’s tax cuts for the wealthy stimulated the economy. The bcliberals in 8 years created zero manufacturing jobs but slot of minimum wage jobs, now that’s an economic record we can take to the bank. I have a question ss who was better in the 90’s bc or Alberta have fun with the numbers