As governments begin tallying the costs of emergency-response programs implemented in recent months during the COVID-19 pandemic, the Kamloops Chamber of Commerce is calling for transparency, noting businesses are concerned about who will eventually pay the tab.
Kamloops Chamber of Commerce president Tyson Andrykew noted significant spending has been needed to keep the economy afloat during the global health crisis. The provincial and federal governments are set to provide budget updates in the near future.
Andrykew said local businesses have expressed concern, at a time when they are hurting from the economic impacts of the pandemic.
“The question is, ‘How are we going to get out of this?’ The natural response is an increase in taxes,” Andrykew said. “And what does that look like? What’s that split going to be between residential and commercial and business and individual taxes and everything else? The concern is for businesses that are on life support. We have to find the right balance between taxing individuals and businesses that allows both to continue to climb out of this.”
Federal pandemic-related aid is estimated at just shy of $170 billion. Meanwhile, the provincial government anticipates a deficit budget for the next four years, with an update in July.
“What we’re really asking for is an update and a plan, as additional stimulus is going to be needed, extending the CERB, that sort of thing,” Andrykew said. “We’re asking for transparency.”
As for the status of the local business community, Andrkyew said it is a positive sign to see lineups outside of stores, such as Marshalls in Aberdeen Mall. Restaurants are seeing increased sales, he said, though it continues to be a fraction of what they would typically bring in.
Meanwhile, B.C.’s business sector said the provincial government has done a good job on the public health fight against COVID-19, but noted its financial policies to help businesses recover from the pandemic are falling short.
Provincial health officials deserve credit for curtailing the growth of the pandemic, leaving B.C. in one of the best positions in North America to reopen its economy with minimal outbreaks of new cases, say business leaders.
That comprehensive response helped allow B.C. to keep construction and natural resource sectors open during the pandemic — key sectors that were closed in other provinces. Yet the government’s $5-billion pandemic fiscal plan has for businesses so far amounted to temporary tax deferrals that will come due this fall and a heavy reliance on Ottawa’s pandemic aid.
“B.C., in relative terms, is throwing really toonies and loonies at the sort of support for the economy piece here, and they are essentially relying on the federal government’s balance sheet and federal institutions,” said Jock Finlayson, executive vice-president of the B.C. Business Council. “They really have done very little. But I think this is a national crisis. We happen to have a national government that has a strong balance sheet and has a lot more tools in its tool kit for something like this, so I think it’s quite appropriate.”
B.C. in late March announced a $5-billion COVID-19 aid package. More than 537,478 people have received the province’s $1,000 tax-free emergency benefit and 82,000 people have applied for the $500 monthly rental supplement. That’s in addition to federal income and housing support.
The provincial unemployment rate was 13.4 per cent in May. Youth unemployment was almost 29 per cent, as retail jobs were lost due to business closures. B.C.’s economy will likely contract at least seven per cent this year, representing one of the largest drops in its history, according to B.C. Business Council estimates.
For businesses, government cut the school tax for commercial properties by 50 per cent in a move it said will reduce the property tax bill for an average business by 25 per cent.
The province also allowed businesses to defer paying their employer health tax, provincial sales tax, carbon tax, motor fuel tax and tobacco tax from late March to Sept. 30. The idea was to let businesses draw upon that cash to survive the closures and steep drop in revenues caused by the pandemic.
“The problem with deferrals is the bill will come due with these taxes,” said Val Litwin, CEO of the B.C. Chamber of Commerce. “It’s offering short term cash relief — which is significant, I’m not dismissing that. But business is not booming right now. So a deferral right now, you still have to pay the piper. But you are not really making a lot of money in the interim.”
Almost 43 per cent of B.C. businesses surveyed by the provincial chamber in late May said they will require more financial help to stay open than is available from governments.
Opposition B.C. Liberal leader Andrew Wilkinson criticized the government for failing to take up his idea of a three-month suspension of the PST, hotel and carbon taxes to spur consumer spending, as part of 30 ideas on economic recovery written in nine letters to the premier.
“It’s difficult to find any business in B.C. that can say they have benefited from provincial government investment,” Wilkinson said.
— with files from the Vancouver Sun