With its proposed changes to the BC’s Financial Institutions Act, the BCMBA has finally got its act together and has released a document outlining the proposals.
The rules will make it more difficult for BCs to invest in banks, for example, and it will make banks liable for losses made by them in the event of a breach of their investment standards.
While the rules are only one aspect of the proposed reforms, they will likely be the most significant.
“The BCMMA has been working hard to address some of the most serious issues affecting the BC financial system,” said the release, which goes on to outline some of its proposals.
Among the rules, the MBA proposes that it be harder for financial institutions to make loans to non-residents and to offer incentives to investors who want to hold investment stakes in BCs public and private sector companies.
“If you have a bank with money in one province and you have money in another province, you might have a good case to be able to take the money in the first place,” said Robyn Knecht, the head of the Financial Institution Regulatory Affairs office at the Bank of Nova Scotia.
“You can’t simply take the capital out of the province, because it has a negative impact on the economy.”
Under the proposal, an investment company would be allowed to invest up to $250,000 in BC companies in the future.
And if an investment is a non-resident holding, it will have to pay taxes to the province and pay a 10% deposit penalty.
While some of these rules are fairly straightforward, there are some very thorny issues to consider.
The MBA’s proposals will allow for the creation of non-profit and for-profit entities to invest money in BC businesses, for instance.
It would also allow companies to create an investment vehicle in their own name and in partnership with another company.
The new rules will also apply to nonresident investments.
The changes would also create a nonresident investment company, which would be able get tax breaks if the company invests in BC.
And for the first time, BC would also be able use the tax break to pay dividends to its nonresident investors.
The change would create a new tax incentive for companies to hire foreign employees, a change that has been proposed by the BC Chamber of Commerce.
This would be particularly troubling because foreign workers are not paid in Canadian dollars.
In the past, foreign workers were allowed to pay tax in the Canadian dollar and could be subject to a 25% foreign tax credit.
The non-revenue-neutral tax credits would also apply when the foreign worker hires BC companies to do jobs for a fee, and the foreign employee can also claim the credit if the employer is in the United States.
These rules would be especially problematic for the large multinational companies that rely on nonresident investment in BC, which have to spend millions of dollars on tax breaks and benefits.
The BC Chamber has also been pushing for the BC government to repeal the province’s 10% tax on non-Canadian investment, arguing that this breaks the ability of smaller companies to expand.
The changes could have a major impact on BC’s economy.
It is estimated that the BC economy is worth more than $500 billion.
And while the rules will have a significant impact on local jobs, the proposed changes also could have an impact on jobs in BC’s largest city.
The BCMAA also proposes to create a tax credit for investments in companies that are based in BC but that do not have their principal place of business in Canada.
While the province currently offers a tax break for foreign investment, the new rules would make it a requirement for companies in BC to provide evidence that they are based or are intended to be based in the province.
With its proposed rules, it would also provide a financial incentive to local businesses that would help attract and retain more workers.
BC also plans to extend the provincial financial services tax credit up to 15% for companies that hire foreign workers.
“The BCMPBA is committed to working collaboratively with the BC NDP and the provincial government to provide a fair, effective and responsible solution to protect the integrity of the BC business environment,” said Peter Brown, the president of the Canadian Bankers Association.