Renew the COVID Tax Cuts Says Burnaby Board of Trade
As the COVID-19 pandemic persists and public health orders continue to restrict regular business activity, the Burnaby Board of Trade (BBOT) is calling for the provincial government to renew three tax cuts and deferrals it introduced last year and which are set to expire. In a letter to Finance Minister Selina Robinson and in a subsequent meeting, the Burnaby Board of Trade is calling for three specific tax policies to be renewed to help bolster the business community and the economic recovery.
Last year, the provincial government helped businesses manage cash flow and reduce expenses by: cutting property taxes, delaying an increase in the carbon tax, and delaying due dates of the employer health tax — all of which should be renewed for 2021 according to the BBOT, Burnaby’s chamber of commerce and largest business association.
Cut Property Taxes Again
In 2020, the provincial government reduced the school tax for commercial properties in classes 4, 5, 6, 7 and 8. As school tax makes up a significant portion of municipal tax bills, the result was an average 25% reduction in property tax bills for businesses. This was a positive move, welcomed and applauded by the BBOT when it was announced.
As property tax is a major cost for businesses, and as the province has not yet implemented a split-classification solution to the issue of “highest and best use”, the Burnaby Board of Trade asks for renewing this reduction in property taxes for businesses in 2021. This would provide cash flow support directly to businesses for the coming year, allowing them to better plan staffing and other investments.
Delay the Carbon Tax Increase
In 2020, the provincial government delayed a planned increase to the BC carbon tax rates until April 1, 2021, when the carbon tax rate will increase from $40 per tonne to $45 per tonne.
While the Burnaby Board of Trade supports a market-based, carbon pricing solution, increasing the tax on April 1 of this year would result in immediately increased costs for businesses while we may well be still in the midst of the second wave of the pandemic — when business costs need to be contained — and should therefore be further delayed.
Provide Employer Health Tax Deferred Installments
In 2020, the provincial government allowed businesses which pay the Employer Health Tax in quarterly installments to defer those payments until December 31, 2020, January 31, 2021, February 28, 2021, and March 31, 2021. This allowed businesses the flexibility to manage their cash flow and make these payments at a time when this cost would cause the least disruption to the business.
As the Employer Health Tax remains a net, new tax recently imposed on businesses, and as the provincial government has yet to increase the payroll exemption threshold to prevent more small businesses from being subject to the tax, the Burnaby Board of Trade asks for businesses to again be able to defer payments until late 2021-early 2022.
For information on our call for renewing the COVID-19 tax cuts, or any advocacy or policy issue, please contact our Director of Policy Cory Redekop at email@example.com