The Campbell government is slashing arts funding even though investment in cultural industries is one of the best economic development and job creation strategies. But the recession has not affected direct and indirect subsidies and ever-more tax breaks going to other industries, including sunset sectors like mining and forestry.
The list of provincial subsidies and breaks for businesses, though already large, is growing through the recession.
The governing Liberals’ climate plan has called for a reduction of small business income tax to 2.5 percent by 2011. Further, the government has since announced plans to reduce it to zero in 2012, according to The Business Council of BC.
In addition, the small business income threshold has been increased from $400,000 to $500,000 effective in 2010 to make the province more attractive to business, the council notes.
To assist industries using trades, the basic training tax credit for eligible apprentices, which is paid to employers, doubles from $2,000 to $4,000.
The provincial mining flow-through tax credit has been extended to the end of 2010. According to finance minister Colin Hansen’s February budget, this provides a non-refundable tax credit to individuals, encouraging them to invest in BC mining and mineral companies. Combined with the corresponding federal tax credits, this incentive reduces the cost of a $1,000 investment by more than $600.
Budget 2009 also pledges $110 million over three years to encourage further growth and development in the energy sector. This includes $6 million for strategic development of the shale and tight gas resources in the northeast.
In 2008, sales of oil and gas rights reached a record high of over $2.6 billion income for the province.
To help companies get to those resources, the province pledged $94 million for an oil and gas rural road improvement program.
The finance minister also committed $5 million in the fiscal year just ending and a further $15 million for the year ahead for a similar road commitment to help forest companies get access to timber and other resources.
And, expiry dates for the province’s film tax credits have been removed.
In the farming sector, the budget introduced a school property tax reduction of 50 percent for all farmland starting in the 2011 tax year. Victoria also committed up to $177 million by 2012 to continue the Growing Forward agreements on agriculture, which is cost-shared with the federal government.
What’s more, corporate income tax is slated to go from 11 percent this year to 10 percent next year, to offset the rising carbon tax all businesses and individuals pay on fuels.
In an April 7 Kamloops speech to a mining and mineral exploration conference, minister of state for mining Gordon Hogg said businesses will also benefit from an industrial property tax credit at 50 percent of school property taxes payable for major and light industrial properties.
He said this will increase the tax credit to 60 percent in 2010 and increase the industrial property tax credit from 50 percent to 60 percent.
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