For many companies, British Columbia has become an attractive home thanks to tax incentives that continue to expand.
But while businesses may get big breaks from those incentives, a new investigative article from The New York Times shows that those companies may not necessarily be returning the favour.
New York Times Reporter Dan Levin spoke to Jon McComb to talk about the article on Wednesday.
Levin says the important part isn’t what the investigation found, but rather what the investigation didn’t find.
He says tax incentives for companies in B.C. have risen year over year for more than a decade, with little to no jobs in return.
Add that to the fact that the province doesn’t give the public ready access to statistics regarding those incentives, unlike other provinces.
Levin says this is a frustrating prospect.
“When it comes to British Columbia the government, which has continued to expand this program, doesn’t even seem to have its own data.”
In fact, the most recent review into job creation from tax incentives is based on information from over a decade ago.
He says this raises one important question.
“How is this continuing to be expanded, where are the benefits, and how is this benefitting regular British Columbians?”
For the most part, as Levin found out, it isn’t.
More than $140-million in tax refunds have been handed out since 2008, projected to create more than 13,000 jobs.
However, Levin says government statistics estimate between 122 and 300 jobs have actually been created in that time frame.
As to why there’s such a disparity, Levin says that’s hard to nail down.
Through his research, he found that many of the companies receiving tax breaks were owned by Chinese firms, and even further were involved in sketchy business practices.
He pointed at the payment processing company PacNet as an example, which allegedly operated as payment processing for other companies conducting mail fraud.
PacNet faced penalties and court cases for years, before being designated by the U.S. government as a “significant transnational criminal organization” in 2016.
The company is currently contesting that designation, which it calls “unproven allegations.”
Levin says the fact that PacNet was not only able to operate unabated, but actually receive tax benefits, shows a huge lack of oversight.
“That company was operating for many, many years out of Vancouver, and it’s unclear if there was any government focus or law enforcement attention paid to them.”
But even if every single company was operating above-board, Levin says that available statistics show huge weaknesses with the tax incentive program.
“When you think about the amount of money that’s being returned it’s just unclear where that money is going and if this is a smart investment for the province.”