Domestic and foreign investors will applaud the measures announced in the British Columbia budget, says The Investment Industry Association of Canada.

The B.C. government released the provincial budget and fiscal plan for the next two fiscal years on Tuesday.

The government re-affirmed the priority for budget balance within the next three years. It will keep spending to an annual average rate of 2.3% and achieve planned personal and corporate tax rate reductions. The modest rise in the public debt burden will not impair the province’s credit rating, the IIAC says.

The province will reduce the corporate tax rate to 10% and eliminate the small business corporate rate by 2011. As well, eligible businesses under the IFA program have been expanded.

“With the lower corporate tax rate and implementation of the HST, B.C. will have one of the most attractive business tax regimes in Canada, laying the foundation for future investment and growth,” says Ian Russell, president and CEO, IIAC.

“The expansion of the IFA program will be a catalyst to attract offshore business,” he adds.

The province’s fiscal plan has focused on stimulating mining investment. The decision to extend the flow-through share tax credit to 2013 recognizes the important contribution the mining industry makes to the B.C. economy, the IIAC notes.

The IIAC also commends B.C. for taking a leadership role in building an efficient single securities regulator, with a decentralized structure responsive to the regulatory needs of vibrant regional capital markets.

IE