Opinion: Building business confidence should be an election issue for every party

Wab Kinew, the premier of Manitoba, is fond of saying, “The economic horse pulls the social cart.” It captures an idea worth championing: strong communities are built on the foundation of a strong economy.

Strong economies depend, in turn, on business confidence.

Former B.C. premier Glen Clark has said: “Capital is a coward,” explaining that welcoming, stable policy conditions attract investment while uncertainty repels it. In other words, the economic horse is easily spooked and capable of trotting off to safer pastures. This is why building business confidence should be an election issue for every party.

Whether your top concern is affordability, health care, or opportunities for young people, business confidence matters.

Confidence leads to investment, jobs, and additional tax revenue to fund social services.

Without a doubt there are pockets of business confidence in this province. It is evident in the recent final investment decision for LNG Canada Phase 2 and in various future mining projects. These projects are anchored by world-class gas and mineral deposits and clear provincial and federal government support.

But there is worrying weakness too. Small business confidence, as measured by the Canadian Federation of Independent Business monthly survey, remains below levels associated with an economy reaching its full potential. A separate survey found over half of small businesses (56 per cent) would advise against starting a business in our province today. And it appears the survey data are playing out in real time as another CFIB report shows five consecutive quarters in which business exits surpassed entries.

Meanwhile, the Greater Vancouver Board of Trade just released a member survey that found 77 per cent believe the economy is on the wrong track, 80 per cent said they are not confident the provincial government’s economic strategy will support business investment, and 95 per cent are concerned about the province’s finances. Too often I hear similar sentiments from B.C.’s mid-sized and large businesses. Many see the province as a very difficult place to invest — not always impossible but increasingly impractical.

For communities to prosper, business confidence has to be widespread, not just limited to specific sectors or projects. Global uncertainty and recent U.S. trade disruptions have added to the pressure, but many of B.C.’s economic challenges predate them. Addressing those long-standing challenges and rebuilding business confidence should be the priority of whoever forms the next government. That is why BCBC put out its policy playbook with recommendations designed to create the confidence that leads to prosperity.

This starts with a plan to reduce the deficit and set a credible path back to balance. B.C. is now projecting a budget deficit of $13.8 billion this year, more than twice the $5.6 billion deficit during COVID, and second only to P.E.I. as a share of the economy. My favourite quote about deficits comes from former premier of Saskatchewan, Brad Wall: “The problem with deficits is they are like potato chips. It’s hard to eat just one.”

B.C. has both hands in the chip bowl, which sends the wrong message to those thinking of building a life or business in the province. Economic growth can help reduce deficits over time, but it needs to be accompanied by a credible fiscal plan. Otherwise, people expect taxes to rise or services to be cut, neither of which inspires the confidence necessary to create growth.

Another important component of business confidence is competitive taxes on income and capital investments. B.C. has one of the least competitive taxes on new machinery and equipment. Personal income tax bracket indexing is scheduled to pause from 2027 to 2030 while the combined federal-provincial tax takes more than half of each additional dollar earned in the top income bracket. These challenges make us uncompetitive, particularly with our nearest neighbours, Alberta and Washington state.

One of the most important things a leader can do to instil confidence is to signal that business is welcome and back that up with predictable rules and clear notice of policy changes.

For B.C., building a strong economy includes addressing large deficits, making taxes on talent and capital more competitive, and providing hospitable, predictable conditions for businesses in sectors as diverse as agriculture, hospitality, and defence.

“How will you build business confidence?” is a question we should put to every leader seeking our vote. Because if the horse leaves for greener pastures, how do we pull the social cart?

Laura Jones is president and CEO of the Business Council of B.C.