VANCOUVER, BC--(Marketwired - September 12, 2016) - According to the BC Check-Up, an annual publication by the Chartered Professional Accountants of British Columbia (CPABC), attracting new global operations and supporting the growth of those already established would benefit B.C.'s economy. In particular, head offices in the high tech sector have contributed to the growth of the sector in B.C., by creating jobs and supporting the growth of small tech businesses.
High tech is B.C.'s fastest-growing industrial sector. Over the past decade, B.C.'s high tech sector has seen its GDP grow at a faster rate than the average industrial aggregate. Vancouver is home to three of Canada's four tech unicorns, or startups that are valued at more than $1 billion, and they are Slack, Hootsuite, and Avigilon. Adding to these flagship anchors are international companies such as Microsoft, Sony Imageworks, and Amazon, which have established a prominent presence in Vancouver. In particular, Microsoft recently opened the Microsoft Canada Excellence Centre in Vancouver, which had a significant impact in the region.
However, compared to other jurisdictions such as nearby U.S. states like Washington, Oregon, and California, as well as Canadian competing jurisdictions like Quebec, B.C.'s high tech sector is relatively young and small. Vancouver has yet to generate enough of a critical mass to form a cluster, like Silicon Valley, which boasts a unique combination of companies, educational institutions, readily available venture capital, and a vast network, to compete with these high tech clusters.
Attracting new global operations to establish headquarters in B.C. or helping local businesses grow to become head offices in B.C. will increase the competitiveness of our high tech sector. These operations, which can be homegrown, national, or global "legal" headquarters, produce important direct and indirect benefits for local economies. B.C. has two of the four ingredients for attracting or fostering high tech corporate offices: good access to capital and a generally supportive tax and regulatory environment.
However, B.C's tax competitiveness is lagging behind competing jurisdictions as its marginal effective tax rate (METR) is second highest in Canada. And while our METR is lower than the United States, it is higher than other tech-focused countries like Germany and the United Kingdom. The BC Government is looking at this but needs to act. In addition, B.C. does not have an adequate supply of high tech sector talent and businesses often have to recruit from elsewhere. Given the high costs of living in Metro Vancouver, it is becoming increasingly difficult for high tech companies to recruit workers, in particular, young workers, to relocate and start a life here.
Richard Rees, FCPA, FCA, President and CEO of CPABC:
"B.C.'s high tech sector has seen amazing growth over the past decade and can become a major global player. An essential step to achieving this status is to attract more corporate headquarters and grow the ones we currently have. As a result, the industry will develop the leadership and local network of businesses it needs to thrive. BC's technology businesses need to work together to make a stronger case for its advantages, which includes a competitive corporate and personal tax regime, competitive costs, and a shared time zone with Silicon Valley. B.C. needs to create a brand based on these merits and market its high tech sector to the world."
Learn more about the BC Check-Up at www.bccheckup.com.
About CPA British Columbia
The Chartered Professional Accountants of British Columbia (CPABC) was formed through the amalgamation of the Institute of Chartered Accountants of BC (ICABC), the Certified General Accountants Association of BC (CGA-BC), and the Certified Management Accountants Society of BC (CMABC). CPABC was officially established when the CPA Act came into effect on June 24, 2015. CPABC represents over 34,000 members and 5,200 CPA students and candidates.
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