Open Letter to Government on the Cost of Doing Business in BC: 6/19/2023
The Fort Nelson & District Chamber of Commerce has written an open letter to Government asking them to consider and collaborate with business when making decisions that impact a businesses costs either directly or indirectly.
See this link for the entire document .
Open Letter to Government of British Columbia
By Email
We are writing today on behalf of the Fort Nelson & District Chamber of Commerce regarding the continued increases to the cost of operating a small or medium sized business in Northern British Columbia.
Fort Nelson is the administrative centre of the Northern Rockies Regional Municipality in the top NE corner of BC. We are the only regional municipality in the province covering nearly 10% of BC’s land mass in a very rural and remote region. We are located in the traditional territory of the Dene, Cree, and Dunne Tsaa peoples of the Fort Nelson and Prophet River First Nations.
We are reaching out to ask your government to take the time to truly understand the impacts of increased costs to business especially in rural and remote communities. Simply put, businesses in urban centres can avoid some costs/taxes through choosing alternative options that are not available to businesses in
rural and remote BC.
Some increases to business have been across the board in British Columbia while others primarily impact rural and remote areas.
Since 2018 the minimum wage has increased by 47.6% moving from $11.35 to
$16.75 / hour. We agree with a living minimum wage, however we need to recognize this puts upward pressure on all levels of compensation resulting in employers having to make tough decisions on staffing levels and if they can grow their business.
The Employers Health Tax shifted the burden of health care premiums even further on to businesses by eliminating the Medical Services Plan. Exempting employers with payroll less than $500,000 is not enough to protect small and medium sized business. The threshold has not been increased since it was introduced and with the continued increases in wages this only equates to between 5 – 10 employees.
This again results in employers having to decide on whether growth is worth the increased cost. We echo other business organizations in requesting government increase the payroll exemption for employers to $1.5 million.
Mandatory 5 days paid sick leave is expected to cost business in BC an estimated
$500 million to $1.6 billion. Any increase would further burden SME’s, some of whom would not be able to survive. There has not been enough time to assess the impacts of the new benefit on business or employees to warrant a further increase.
A new provincial statutory holiday placed another payroll burden on employers. We support what the National Day for Truth and Reconciliation is honouring, but there needs to be recognition that additional statutory holidays particularly without advance notice for business puts an additional cost burden on business.
Carbon Tax is a direct cost for many businesses. In rural and remote communities’ other options to fossil fuel may not be available.
Tourism and other business without access to BC Hydro’s grid have to generate all their own power most
often through diesel or gas generators and pay carbon tax on that power generation. Remote communities are often not able to take advantage of rebates due to the unavailability of inspectors to approve projects. Public transit is not an option to help offset the carbon tax.
Province wide mandates for heat pumps and charging higher PST for fossil fuel systems are unfair to remote and rural communities, especially for those in colder climates and who don’t have the choices available to others. For instance BC Hydro provides electricity for the Fort Nelson area and Toad River through the operation of gas generation plants. In the event the generating station is down Fort Nelson gets electricity from the Rainbow Lake generating plant in Alberta which also uses an open cycle gas turbine to produce electricity. It doesn’t make sense to move our heating systems from natural gas to electricity if we are going to use that same natural gas in greater quantities to produce the increased power requirements of electric heat in the North. Cost/benefit analysis needs to be completed before rural, remote and northern communities and business is forced to move to alternatives and pay higher costs than our neighbors while simultaneously not seeing a reduction in GHG emissions. Heat pumps are not yet able to reliably work in colder climates (Fort Nelson regularly experiences -30 to -50 Celsius in the winter – last December we saw
-54). This would require business and residents to either operate two systems at a significantly increased cost or pay significantly more in carbon tax. Using gas to produce the required electricity would also result in higher GHG emissions defeating the purpose. Exemptions in rural, remote Northern areas of the province must be put in place. A recent policy adopted by the BC Chamber is attached.
In the BC Chamber of Commerce’s 2022 Collective Perspective’s Survey 7 in 10 respondents in Northeast BC identified the following three issues as the most important:
- 91% - Cost of doing business
- 71% - Cost of labour
- 63% - Cost and availability of technology
We believe the health of a community and the health of the province is a direct function of the health of the businesses that operate within it. We recognize that government has made some positive impacts such as lowering the small business tax rate from 2.5% to 2% and we support the funding announced in the Future Ready Action Plan but it is not enough to help business recover from the cumulative effect of all the increases to the cost of business especially now as we still work to recover from the pandemic.
Business needs the support of government because it is businesses that create jobs, hire workers, and deliver economic growth and sustainability.
We believe in working wages and healthy employees; we believe in working with our indigenous partners in reconciliation and in working towards net zero in a meaningful way.
However, we are asking government to stop and engage with business organizations and truly understand the impacts government decisions have on business. The increasing cost burdens are unsustainable. BC is a geographically diverse province and we can’t paint it with one brush. We urge you to put better protections /exemptions in place for those areas of the province where other options are not available.
We are happy to meet with government at any time to discuss the challenges we face. For the sake of our communities and businesses we are asking government to give us the opportunity to collaborate with you to ensure our businesses can be successful and support their operations, families, employees, and our communities.
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