VICTORIA - British Columbia continues to face challenging global economic conditions, but fiscal prudence and a focus on a competitive economy that creates jobs and attracts international investment will help B.C. manage these risks, Finance Minister Kevin Falcon said in a speech to the Vancouver Board of Trade today.

In his address, Falcon reviewed the state of the 2011 provincial economy, the outlook for the coming year and discussed the importance of making British Columbia more competitive for job-creating businesses.

As part of 'Canada Starts Here: the B.C. Jobs Plan', the minister also announced the government has appointed an Expert Panel on Tax to provide analysis and recommendations to the Province on business tax competitiveness and administrative improvements to streamline the Provincial Sales Tax.

The panel will have the following members:

• Chair: Sarah Morgan-Silvester - chancellor of the University of British Columbia.

• Lindsay Hall - chief financial officer, Goldcorp.

• Laura Jones - senior vice-president research, Economics & Western Canada, Canadian Federation of Independent Business.

• Elio Luongo - Canadian managing partner, KPMG and vice-chair of the Vancouver Board of Trade.

• Fiona Macfarlane - managing partner, Western Canada and chief inclusiveness officer, Ernst & Young LLP

• Grace Wong - senior advisor international, office of the provost and vice-president academic, University of British Columbia and former assistant dean international, Sauder school of business.

• (Adjunct Member) Dale Wall - former deputy minister, Ministry of Community and Rural Development, Province of British Columbia.

The expert panel will consider the competitiveness of British Columbia's tax environment for business and develop recommendations about which taxes most influence competitiveness and economic growth. It will also identify and develop recommendations for ways in which the Government of British Columbia could address tax avoidance within the business or personal taxation systems. A component of the review will also look at municipal property taxation of business.

The panel's recommendations must respect the Province's balanced-budget framework. The report will be submitted by Aug. 31, 2012.

• Private sector forecasters currently expect B.C. real GDP to have increased by 2.3 per cent in 2011, and to average 2.1 per cent growth in 2012.

• B.C. exports were up 14.5 per cent year-to-date to October, despite a sluggish US economy and an elevated currency, highlighting B.C.'s diversified trade portfolio.

• Export gains were largely in energy products (25.4 per cent), forestry (10.9 per cent) and industrial and consumer goods (14.8 per cent).
• Softwood lumber exports to China were up 92.2 per cent in the first ten months of 2011 compared to the same period of 2010.

• British Columbia's low debt-to-GDP ratio - a key measure of affordability - forecast at 17.2 per cent for 2011-12. B.C. is one of only three provinces with a triple-A credit rating.

• At 10 per cent, B.C. has the lowest general corporate income tax rate in Canada, along with Alberta and New Brunswick.

• When all taxes are considered, British Columbians generally have one of the lowest tax burdens in the country.

A backgrounder follows.

Media Contact:

Government Communications and Public Engagement
Ministry of Finance
250 356-9872

BACKGROUNDER

Expert panel review of business taxation

Terms of reference

The task of the Expert Panel is to generate ideas and provide recommendations for a business taxation system for British Columbia that balances the principles of competitiveness, fairness and simplicity.

The panel will provide analysis and recommendations to government on the following issues:

Business tax competitiveness

• *Consider the competitiveness of British Columbia's tax environment for business and develop recommendations concerning which taxes most influence competitiveness and economic growth. It will involve a broad review of all business taxes and provincial business tax credits or other provincial business tax expenditures.

• Identify and develop recommendations for ways in which the Government of British Columbia may address tax avoidance within the business or personal taxation systems.

Administrative Improvements to Streamline the Provincial Sales Tax

• Develop recommendations for administrative improvements to streamline the Provincial Sales Tax.

Guidelines

• Acknowledging that the Harmonized Sales Tax was intended to improve the competitiveness of the B.C. economy, the review is intended to identify other ways to maintain and improve B.C.'s economic competitiveness, while respecting the referendum result to return to the Provincial Sales Tax.

• The review will be restricted to provincial business taxes of general application, including tax expenditures and property taxation but excluding resource royalties and non-tax issues.

• The review will include an examination of municipal property taxation of business and its impact on business competitiveness and investment. Recommendations must address issues of affordability and sustainability for local governments within the framework of the Community Charter.

• Tax reforms or other recommendations must be fiscally neutral and sustainable for the Province within the Province's balanced budget framework.

• The Expert Panel may commission independent research as necessary to conduct its review.

• The Minister of Finance must receive the expert panel's final report no later than Aug. 31, 2012.

Media Contact:

Government Communications and Public Engagement
Ministry of Finance
250 356-9872