Corporate Tax - Who Wants It Anyway?
Sometimes the right ideas are the toughest to sell in Canada. And the Premier’s newest idea to refund corporate taxes to biotech companies who stay in BC and develop their products here should get the shirts of all the usual suspects in a big, fat knot.
Premier Gordon Campbell visited Philadelphia this week to attend Bio 2005 – the largest gathering of the biotech industry in the world. According to reports, over 600 Canadians were there, but nary a Federal politician was in sight. Not surprising, I guess, given the on-going gong show in Ottawa.
Biotech, despite its futuristic sounding name, is the industry that researches and builds everything from medicines for Grandma to new enzymes to break down wood fibre for the pulp and paper industry.
The biggest thing about biotech, though, is the amount of money it takes companies to develop their products. Millions of dollars and thousands of long, labour-intensive research hours go into the development of drugs like Visudyne.
Manufactured by QLT here in Vancouver, Visudyne is prescribed for people struggling with age-related macular degeneration – and helps them from losing their eyesight. QLT has stayed in BC, but they’ve seen their peer companies pack up and leave.
Jobs in research are the kinds of jobs that our kids here in BC should be striving for: good pay, interesting work, and lots of opportunity.
But all that investment in research only gets a biotech company to the starting line; from there it has to manufacture, market and sell its products.
That’s where the Premier’s idea comes in. BC and Canada have decent
regimes to support research. Add that to our highly educated and skilled
work force and we have a combination that encourages biotech companies in the research phase to set up shop – especially now that they can attract specialist employees to BC given the changes to the personal income tax under this government.
However, once their research is complete, companies look south to the US or across the pond to Asia and realize that the costs associated with manufacturing in Canada and marketing from BC can make them uncompetitive. And they leave. Or they leave a skeleton operation and locate their manufacturing facilities elsewhere.
BC, and Canada as a whole, is losing out on this work – again, high-paying, highly skilled jobs – the kind the we need to grow a balanced and sustainable economy.
The Premier’s suggestion to refund corporate tax to encourage these companies to stick around doesn’t sound quite so out-there once you consider the upside: more jobs, more tax revenue for the government, more opportunities for our kids.
And in fact, loss of employment was cited by many economists as the most damaging element of the Federal Government’s reversal on federal corporate tax cuts in collusion with the ideological NDP, who never met a corporation they could respect the next morning,
Good for the Premier, for helping out the biotech industry.
Maybe this can be one more step on the road to a corporate tax free British Columbia –now that should get the anti-corporatists going!