Hongkong firms warn BC premier on budget blows
HONGKONG companies in Canada have warned the Premier of British Columbia, Mr Mike Harcourt, that tax increases and failure to adequately amend a corporate tax will hamper his efforts to drum up investment for Canada during a visit to Hongkong.
The British Columbia (BC) provincial budget, delivered yesterday, revealed increased taxes on the profits of larger companies, on higher income earners and most consumer goods.
The higher taxes are intended to help fund spending on health care, education and infrastructure.
The move would cause concern among both domestic and foreign investors, said the vice-president of the Hongkong Bank of Canada, Mr David Bond.
The budget was also criticised by Hongkong firms which were earlier promised that all companies in BC would receive a break in the 0.3 per cent corporate capital tax levied against companies with registered assets in access of C$1 million (about HK$6 million).
Instead of raising the threshold to the C$10 million level implemented by the federal government, or to a level rumoured to be about C$5 million, the New Democratic Party (NDP) announced it would begin taxing companies with principal investments of more than C$1.25 million.
This will exempt 2,000 of the 25,000 companies of that size from the asset tax.
''It's a nice gesture and a movement in the right direction, but it hasn't gone nearly far enough,'' said Mr Wilfred Vacheresse, director of the Hongkong Canada Business Association and business representative of Hongkong shipowners in Vancouver.
He intends to accompany Mr Harcourt on the Hongkong, Guangzhou and Beijing segments of his Asian tour at the end of this month.
A Statistics Canada report reveals that manufacturers in British Columbia, including Hongkong-based firms, plan to invest C$1.65 billion in the province this year, well short of last July's rosy forecast of C$1.95 billion.
''The basic fact remains that the decline in investment shows how effective the capital tax is as a method of ensuring a bleaker future for BC,'' said Mr Bond.