British Columbia is second only to Ontario as the hardest hit province from 2011 payroll tax increases, which means less take home pay for all working people.
That's the conclusion of the Canadian Taxpayers Federation's annual tax change calculations for provinces in the new year.
The federation - a non-profit organization that advocates for lower taxes and less government waste - calculated the changes for a variety of income and family scenarios, adjusting 2011 incomes for inflation. British Columbians are facing an average 2.9 per cent increase, says the taxpayer group.
"In previous years, there has almost always been winners and losers depending on income levels, family scenarios and what province one lives in," said Derek Fildebrandt, the federation's national research director. "This year everyone loses, although some more than others."
Increases in federal Employment Insurance and Canadian Pension Plan payroll-tax thresholds mean that anyone earning more than $44,200 will pay an additional $76. Employers will pay an additional $110 in 2011 in payroll taxes.
This continues a long trend, dating as far back as 1994, of payroll tax increases.
The federation also noted that in British Columbia, Medical Service Plan premiums are increasing - to $121 from $114 for a family of three or more.
The taxpayer group also highlighted that the province pulled back a promised 15-per-cent income tax hike slated for Jan. 1.
Premier Gordon Campbell had made the promise in a televised address late in the year, but it was rescinded by cabinet after the premier said he was resigning. The move was made to give Liberal leadership candidates room to propose their own policies. The Liberals choose a new leader, who will be premier, on Feb. 26.
"[T]hanks to the cabinet flip-flop, they now face the second largest hike in the country after Ontario," said Fildebrandt.
The tax picture is not completely one-sided in British Columbia.
The B.C. Liberal government has highlighted that a corporate tax rate reduction to 10 per cent in the new year will give British Columbia the lowest rate in the country along with Alberta.
The province has reduced the corporate income tax rate 40 per cent since 2001, while income tax rates have been decreased 37 per cent for most British Columbians during the same period.
In announcing the coming corporate tax cut to 10 per cent from 10.5 per cent, B.C. Finance Minister Colin Hansen said that keeping business taxes low is an essential part of maintaining a competitive tax environment that will attract investment and create jobs. "We have reduced taxes to some of the lowest levels in the country," Hansen said in a statement.
The corporate tax cut is welcome news for Prince George businesses, Prince George Chamber of Commerce president Roy Spooner said Wednesday.
"Obviously, we are happy to see that," said Spooner, whose organization represents hundreds of businesses in Prince George.
The city's businesses have been contending with the fallout of a protracted housing collapse in the U.S, which began in 2007. The economic hardship was exacerbated by a recession in 2009.
In the past year, the economic picture has been looking more positive. Prince George, a service and supply centre for the region and the largest community in northern B.C., has benefited from an emerging lumber market in China.
Investments in the mining sector are also providing benefits to the cit. The next year looks good for Prince George, said Spooner.
"[The mood] in general is upbeat."
