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British Columbia has the fourth-largest provincial economy in Canada but is the third-largest by population. This disparity means that something can be done to improve the prospects of the province, improve GDP and boost government revenue, which would ultimately result in more spending and improvements for the population.

One potential outlet for this is taxation streams.  The fact is, a major percentage of government revenue is generated by taxes. This isn’t restricted to income tax—it includes things like business tax, property tax and tax on goods and services, all of which are necessary.

If the province hopes to push the GDP further and bring their economy in line with the population, exploring new tax streams could be a viable option. Indeed, other provinces, like Ontario, appear to do this especially well. To give you some insight, this article will explore   the current climate in B.C., and the potential lessons the provincial government could learn from the leading economic powerhouse, Ontario.

Why are new tax streams needed in B.C.?

Many economic experts have projected weak economic growth for B.C. in 2024. Additionally, several key factors point towards increasingly difficult conditions for B.C. citizens, including house prices, interest rates and increased unemployment. :

• Housing starters and prices were record high in 2023
• GDP per person is expected to fall for the second year running
• Activity on major project developments is expected to decline
• Unemployment jumped to 5.4% in September 2023
• In the last 25 years, the B.C. population has grown at its fastest rate
• Inflation has reached its highest level in 40 years

As you can see, a cocktail of factors has been mixed together to create a less-than-ideal outlook for the economy, future and stability of B.C. Firstly, the housing market has been strained by increased interest rates, which means demand has lessened and prices have dropped.

This is also a fast-growing population, which is producing less GDP for the province, while unemployment rises. On top of that, the B.C. government, in its 2024 budget, revealed its largest spending package to date. COVID-19 and a global economic recession, of course, have played a role too.

This all points towards a need for change. The government needs to increase revenue to push through with its budget and improve the outlook for the province for its citizens. Oftentimes, when revenue is needed to stimulate growth, governments turn to taxation.

What is Ontario doing about tax revenue?

It’s clear that the province of Ontario is doing something right. We only have to look at the provincial GDP rates to see that it’s wealthy. Ontario currently accounts for 37.26% of the national Canadian GDP. This far exceeds any other province, with the second place going to Quebec at 19.39%.

B.C. comes in at fourth place at 14.05%. This does balance somewhat with the relative populations of the provinces, but it shows that Ontario is likely doing something differently. Could its tax income be the main factor, and, is this something B.C. could emulate? Currently, the Ontario government has the following tax streams.

• Personal income tax
• Sales tax
• Land transfer and property taxes
• Federal transfers
• Corporations tax
• Employer health tax
• Other taxes (fees, sales, rentals, etc.)

Within these broad categories, there are a range of important streams, including taxes on goods and services, payroll and workforce taxes and property taxes. Taxes on goods and services are easily the largest revenue stream for the province. For example, in 2022, this tax raised approximately C$51 billion.

Below you can look at this in more depth and compare the relative revenue streams of . and :

As you can see, there are some major differences here, but its important to remember the difference in population. Ontario has a population of 15+ million, whereas B.C. has just 5.3 million. So, with roughly three times the population, you can expect three times the revenue from different tax streams.

Indeed, this holds true, although B.C. matches Ontario in terms of property taxes, it is falling short when it comes to payroll and workforce taxes. Some specific taxes that the B.C. government could change or adopt that Ontario utilizes include

• Beer and wine tax
• Employer health tax
• Spirits tax
• Estate administration tax
• Insurance premium tax
• Harmonized sales tax

Certainly, taxes on non-essential items and venues could be a viable option. Often, in uncertain times like this, governments choose to raise taxes on “luxury” items as it usually causes the least backlash. People can go without luxury items like beer and wine whereas direct taxation, like income tax and sales tax on essential goods, has a far more negative impact.

What economic areas need new investment in B.C.?

While tax streams are vital for economic growth and government stability, there are other areas to be explored. Many new industries and opportunities in B.C. are available and could be worthy of investment.

For example, the online casino industry is thriving, , which has led to a wide array of platform genres on offer, the main two being online and sweepstakes. Additionally, online businesses have popped up around the industry, the most notable being review sites. These sites offer players a comprehensive overview of new casinos entering the market, designed to help new players choose and engage with their first platform. A good example of this can be seen in a recent review of new online casinos at ; the review acts as a guide to help players take the first steps into the world of online gambling.

B.C. residents have access to a wide range of online casinos and the government could support this by creating more favourable legislation and support for the websites. A great example of this is in the U.K., which has the second largest online gambling market on the globe, where taxes are levied against betting and gambling to add an additional £3.3 billion to its treasury and which can later be reinvested into social care and other government-funded schemes.

Other major economic sectors in B.C. that could see investment include agriculture, clean technology, construction, film and television, aquaculture, forestry, high technology, manufacturing, maritime, mining, technology and tourism. Each sector offers plenty of opportunity and this is one of the reasons why B.C. has so much potential. Its unique location and geography in Canada has always offered more.

The government could consider a multi-pronged approach that includes creating new tax streams and stimulating economic growth in both established and emerging sectors.

New tax streams should be considered as just one revenue option

Hopefully, the glum outlook for B.C. can be washed away by the end of 2024, and the province’s fortunes is improved. B.C. citizens offers residents plenty of positives, but there is no denying that things could be better.

It’s clear that the province has work to do if it wants to realize its ambitious spending budget for 2024, and part of this could include looking at new tax streams. Other provinces like Ontario have done this successfully while still maintaining a high GDP, positive economic growth, and budding population.

Any tax changes that the government looks at must be done so with care. The additional revenue it generates from taxation must be put to good use and B.C. citizens must be able to see the benefit. The worst thing that could happen is that taxes are increased, or new streams are introduced, and the money generated goes to waste or disappears into the ether.

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