[Flash Walken]

Originally Posted by Rerun

Seems to me we're not that far out of line with the rest of the provinces (except Quebec of course)

http://www.albertacanada.com/busines...ate-taxes.aspx

That's a result of the race to the bottom instituted by Alberta.

It's called Beggar thy Neighbour.

Alberta's artificially low corporate tax rate has forced neighbouring provinces to follow suit to attempt to attract corporate tax dollars. The impact of that has been substantial:

In fiscal 2000/01, the year prior to the BC Liberals' taking power, GAAP receipts stood at 22.6 per cent of B.C.'s nominal GDP.

Now, in the coming fiscal year -- as shown in the Budget and Fiscal Plan, 2012/13 - 2014/15, released by Falcon on Tuesday -- the comparable figure is expected to fall to just 19.6 per cent of GDP.

The revenue lost to the provincial treasury -- three per cent of nominal gross domestic product (22.6 per cent, minus 19.6 per cent) -- in 2012/13 alone is $6.6 billion.

By 2014/15, when Falcon expects GAAP receipts to drop to 19.2 per cent of GDP, the annual loss will be $8.1 billion.

Dearth of reinvestment in BC

Of course, the loss of that revenue would be acceptable -- even laudable -- if the foregone receipts were re-invested in British Columbia's economy. They have not, and are not.

Consider that the province's corporate-income tax rate, which stood at 16.5 per cent before the BC Liberals took power in 2001, today is just 10.0 per cent. Profitable corporations, however, pay even less than that.

Falcon's budget shows that corporate profits will surpass $24.7 billion in 2012, yet Victoria's corporate-income tax receipts will come in at less than $2.3 billion -- or a mere 9.1 per cent of profits.

Next year, in 2013, profits are expected to rise to $25.8 billion, but the province's take will drop to 7.9 per cent.

(And, of course, the corporation capital tax -- the means by which enormously profitable financial institutions paid modest sums to the provincial treasury -- was abolished by the BC Liberals in 2009.)

Have businesses re-invested their tax-savings in British Columbia?

No. In fact, capital investment in machinery and equipment -- a key indicator of business confidence -- has plunged over the last decade, dropping to just 5.3 per cent of nominal GDP in 2010 from almost seven per cent in 2001.