CPABC in Focus November/December 2014 | Page 19

elias.kordelakos/iStock/Thinkstock When asked about the BC economy, 40% of survey respondents rated it as “fair,” and 50% rated it as “good.” Looking to the future, they expressed optimism for BC, with 34% predicting that the provincial economy will improve over the next two years, and 58% predicting that it will improve over the next five. Only 8% of respondents said they expect the BC economy to worsen over the next two and five years. Respondents also indicated that they consider BC to be a driver of the Canadian economy, with almost 30% saying they expect the provincial economy to grow at a faster pace than other regions in Canada. Another 36% said they expect BC’s economy to grow at approximately the same pace, while 18% said they expect it to grow more slowly. On business challenges Asked to rank 10 potential challenges to business success in BC, survey respondents chose the following as the top three (listed by order of ranking): 1) the ability to attract and retain high-calibre employees/skilled labour; 2) the ability to raise capital; and 3) government red tape. Overall, 78% of our survey respondents identified the ability to attract and retain highcalibre employees/skilled labour as a major or moderate challenge to BC’s business sectors. The percentage was slightly higher among respondents from the rural regions of BC (regions of the province other than the Lower Mainland and Vancouver Island), with 82% describing attraction and retention as a challenge to business success—this reflects the labour skills gap rural BC is currently experiencing amid a boom of development projects. On economic issues Housing prices topped the list of economic issues that hinder business success in BC, with 81% of survey respondents rating high housing prices as a “major” or “moderate” challenge. Unsurprisingly, 84% of respondents from the Lower Mainland identified housing prices as an economic issue. The return to PST/loss of input tax credits was ranked as the second most challenging economic issue, followed by BC’s economic climate and the value of the Canadian dollar versus the US dollar. On global issues Survey respondents identified economic recovery in the US (76%), commodity prices (73%), and the slowing of China’s economy (71%) as the top three global issues that challenge business success in BC. Results indicate that levels of concern about the US economy are consistent across the province. However, respondents from the Lower Mainland were more likely than those in other regions to identify commodity prices as a challenge. Respondents from the Lower Mainland also expressed more concern about the slowing of China’s economy. On government support to business Almost half of our survey respondents said they think the federal government is doing a “good” (38%) or “excellent” (4%) job of creating a healthy business and investment climate in BC. Similarly, 41% rated the provincial government’s performance in this category as “good” (37%) or “excellent” (4%). By comparison, only 25% said municipal governments were doing a “good” job of supporting a healthy business and investment climate at the local level; another 23% rated the performance of municipal governments in this category as “poor.” Improving regional economic development was cited as the top priority for the provincial government by survey respondents—ranking highest (35%) and second-highest (22%) in results. Respondents also said the reduction of government red tape and the restoration of PST input tax credits would improve BC’s economy. In addition, 50% of respondents said increasing the provincial tax rate would have a negative impact on their company’s/clients’ business investment plan. Respondents from smaller organizations (those with fewer than 50 employees) were more likely to say they expect a negative impact than those from larger organizations. On financial management In terms of business growth, 60% of respondents who work in industry said they believe their operations will expand over the next two years. Among respondents in public practice, however, only 35% said they believe their businesses will expand; another 61% said they expect their businesses to stay the same. About the survey respondents The Business Outlook Survey was conducted in September 2014. A total of 2,423 BC CPAs completed the survey. Of those who participated