bc economy

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With BC facing a recession, the provincial government had good reason to re-focus on the economy in its 2009 budget. Unfortunately, the government did not make the tough decisions required to make British Columbia more competitive and attractive for investment and business development.

For starters, little was done to improve incentives to work, invest and take entrepreneurial risks. Reduced personal income and business taxes would have improved these incentives and provided a stronger foundation for wealth creation now and in the future.

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For more than a decade, Albertans have enjoyed the benefits of Canada’s most successful economy, in large part due to the Alberta Advantage. The widely recognized Alberta Advantage is based on the combination of Canada’s lowest tax rates, smallest government and most attractive investment climate. However, the province’s focus on the Alberta Advantage has been slowly eroded. British Columbia now has an opportunity to surpass Alberta and create a BC Advantage consisting of the lowest personal income and business taxes in Canada.

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The BC Liberals’ third full budget, delivered this past Tuesday, offers a few positive measures to bring about fiscal responsibility; unfortunately, it was largely void of an overall vision for the future of the province on how to deliver prosperity.

On the positive side, the Liberals should be commended for balancing the province’s budget. In addition, BC became the first province in Canada to comply with generally accepted accounting principles (GAAP), making its books the most transparent in the country.

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Historically, British Columbia has enjoyed a high level of prosperity expressed in high incomes, low unemployment, strong investment, and a wealth of opportunities. In a brief decade, the provincial economy has been transformed from a strong, vibrant entity into one characterized by weakness and mediocrity. Only a radical change in government policy will return British Columbia to its traditional place of economic prosperity.