VICTORIA: The Canadian Taxpayers Federation (CTF) today pointed out that the BC government ads which claim BC's small business tax rate is now lower than Alberta's play loosely with the facts.

"It's laudable that the small business tax rate is being lowered, but the ads are misleading," noted CTF-BC director Mark Milke. Milke pointed out that because the small business tax rate drops from 8.5% to 5.5% as of July 1, instead of being retroactive to January 1, the real tax rate for a business for calendar year 1999 will be 7.0%, not 5.5%, as the government ads imply.

"Compare that to Alberta with a small business rate of 6.0% for 1999 and there goes the government claim that small businesses are taxed more lightly in BC vis-à-vis Alberta," said Milke. "In addition, if the Alberta government drops the small business tax rate in 2000, Alberta's taxes may well be lower not only in 1999, but again in 2000."

Milke also noted that the BC government plans to introduce at least five new user fees in 1999, and increase at least four others. (Source: Page 65, Budget 1999 Reports.) "The government, while handing out a tax reduction on one hand, will snatch some it back with the other," said Milke.

"Alberta-based businesses continue to pay much less in taxes on a variety of fronts when compared with BC - i.e., no provincial sales tax and lower accommodation and fuel taxes. As well, Alberta businesses can reasonably expect significant future tax reductions given Alberta's more prudent approach to government spending, deficits, and debt repayment. In BC, the government continues to run deficits, which are simply deferred tax increases," noted Milke.