Business owners give NDP a ‘D’ grade

But B.C.’s regime can improve with proper initiatives, say Richard Truscott and Mackenzie Cumberland.

Did you ever receive a bad grade in school? As you brought your report card home to your parents, a knotted pit would form in your stomach. For the B.C. government, that feeling is all too real as July marks their first year in office.

In a recent Canadian Federation of Independent Business survey, business owners were asked to grade the provincial government.

The results were disappointing: they gave the government a ‘D.’ But just like bad report cards in school, it’s not too late for the government to improve its performance.

The following five steps would help the province improve its grade:

Step 1: Fix the EHT. The proposed employer health tax (EHT) is a much-larger burden on employers than the government says. Almost two-thirds of business owners say the $2-billion-a-year payroll tax would negatively impact their business. The tax should be scrapped, but if the government is bent and determined to implement it, they must look at ways to mitigate the damage on small business, like increasing the payroll threshold at which the tax kicks in. Manitoba’s is set at $1.25 million, but B.C.’s is only $500,000. Boosting that threshold would exempt more small businesses from this heavy, new tax burden.

Step 2: Refund the WorkSafeBC surplus to employers. Small-business owners in B.C. are facing a mountain of escalating costs and beginning to feel priced-out of the province. But there is one straightforward way that the B.C. government can offer relief. WorkSafeBC remains massively overfunded by employers. The ratio of assets to liabilities has grown to 153 per cent, representing $6.4 billion in excess funding in the system. Providing a partial refund to employers, while still maintaining a reasonable cushion in the system, will allow them to boost pay, hire more people, and invest in safer and moreproductive equipment.

Step 3: Remove the PST on business inputs. When asked about the impact of the PST, two-thirds of business owners said it was bad for their business. Not only is compliance difficult, but unlike the GST, businesses are required to pay PST on business inputs. Clearly, this discourages business growth. By removing the PST on inputs, the government would make the tax easier to stomach and comply with.

Step 4: Reduce red tape. For more than a decade B.C. has been considered a leader in reducing the regulatory burden on businesses and individuals. Since 2001, the province has cut regulations by nearly one-half, and the “no-netincrease” rule ensures that for each new regulation the government introduces, they remove at least one existing one. Unfortunately, this rule is set to expire in January 2019. Since reducing red tape is a key priority for entrepreneurs, renewing the rule would be an easy way for the government to demonstrate it’s serious about continuing to tackle the issue.

Step 5: Slow down the proposed minimum-wage increases. The minimum wage is set to increase 34 per cent over the next three years — 17 times faster than the rate of inflation. Business owners have made it clear that absorbing this rapid increase puts them in a serious squeeze. That’s not good for their businesses, their employees or their consumers. Other places like Seattle, New York and California extended the rollout of increases to the minimum wage in recognition of the unique situation of small businesses. The government should consider this approach and investigate mitigating measures to help small businesses shoulder these additional costs. B.C.’s policy-makers can achieve better grades from business owners next year by following these five simple steps to create policy that supports and recognizes the important role that independent business serves in our economy and in our communities. Failure to do so, however, will no doubt mean the government takes home another bad report card.