Studies have found fewer independent businesses are being started in B.C., resulting in a negative effect on the economy.
This was highlighted in the latest CFIB report where it showed confidence levels in B.C. sitting at 59 points for June. The national average is 62.
The driving cause of this trend is because of higher personal income tax. With the government increase the rate from 14.7 per cent to 16.8 per cent.
Fraser Institute’s Charles Lammam says with it becoming harder to start businesses in the Lower Mainland they could start migrating north where there is less competition.
“The sub-regional effect will be different. Of course, you are going to have, by nature, more businesses starting in urban centes. So, for sure that is likely to be the case.”
However, this won’t be enough to fill the gap left in the economy.
“If you don’t have a strong business sector in the province you’re not going to have the same kind of economic growth that you otherwise would. That means less tax revenue for the government to fund the important public services we value.”
Lammam says based on study findings, it’s estimated that 662 new businesses will not start up in the province this year because of higher tax rates.