BC has not been spared the effects of the worst global recession in 70 years and the drastic reduction of government revenues has created larger provincial deficits than the government and most private sector economists had predicted in February. As such, the Government of British Columbia had to make some tough choices in the recent Budget Update.
Finance Minister Colin Hansen pointed out that the two main drivers behind the budget decisions were the protection of core services and ensuring that BC is well positioned to benefit from the economic recovery. Faced with tough fiscal challenges, the government chose to focus on its core mandates of health care, education and social services while accelerating capital spending as an economic stimulus and cutting spending on selected programs and administrative expenses.
For the technology industry, our most relevant ministries, Small Business, Technology and Economic Development (STED) and Advanced Education and Labour Market Development (AVED), were both spared budget cuts. In fact, STED received a $9M increase in its budget for Asia Pacific, Trade and Investment for the next three years.
The key programs supporting the technology sector continue to be funded, including:
• investment tax credits under the Small Business Venture Capital Tax Act;
• provincial SR&ED tax credits; and,
• The Innovative Clean Energy (ICE) fund.
This is not to say that the BCTIA would not support the expansion of these programs or the introduction of new initiatives for advancing the industry, but in light of the government’s fiscal conservatism, we believe that the decision not to reduce existing programs is an indicator that the government indeed recognizes that the future of growth industries cannot be sacrificed due to present constraints. This impression is certainly validated with respect to the clean tech and clean energy sectors, which were strongly endorsed in the recent Throne Speech. The BCTIA will continue to work with government to ensure that other sectors of our industry are also featured prominently in the government’s overall economic development strategy.
The BCTIA is concerned that the cuts to general discretionary spending further reduces the government’s ability to support new opportunities in general and for the advancement of the knowledge industries in particular.
Notwithstanding the current economic and fiscal challenges, these industries play an increasingly important role for job creation, growth of exports and of GDP. Therefore, the BCTIA strongly encourages the government to focus their efforts and attention on activities and initiatives that will foster the further growth and success of the industries that have the proven resilience to sustain our economy today and into the future.
President & CEO
BC Technology Industry Association
For more insights into how the BCTIA believes that industry can work with government to help create and advanced technology sector here in BC, attend the October 20 Forum Positioning for Prosperity: Commercial and Industrial Opportunities for a New BC Economy hosted by the BC Business Council. Go to www.bcbc.com for more information.