Many clients tell us they plan to move BC because of the warmer weather but there are some things that they should keep in mind. Although Alberta and BC have equal small business corporate tax rates of 12%, Alberta is still the rational choice for your headquarters.
Alberta’s differences over BC:
- Higher GDP with an economy size comparable to Finland vs. BC’s economy which is comparable to Romania. In 2017 Alberta grew at twice the rate of BC
- More than twice the exports as BC
- Alberta is less dependant on oil (a real resource) than BC is dependent on real estate (over-valued)
- While there is money to made from the bigger population of BC, it isn’t worth the headache compared to dealing with a demographic with higher disposable incomes. With higher incomes + housing more affordable in Alberta vs. Vancouver, there is more disposable income to capture from Alberta’s affluent consumers.
- No provincial sales tax, no provincial health-care premiums (BC’s monthly premium rate), least expensive motor vehicle licenses and permits, which all mean that in addition to higher incomes and lower cost of living, Albertans have more disposable income to spend on your business.
- Personal tax advantages to earning non-eligible dividends at $60,000 in a family.
- Alberta has no probate fee. However, in BC, where the gross value of all your real and personal property in BC subject to probate doesn’t exceed $25,000, there is no probate fee and where the gross value DOES exceed $25,000, the probate fees are:
0.6% of the portion of gross value over $25,000 up to $50,000 and 1.4% for the portion of gross value over $50,000 (Example: $8,900 total probate fees if your gross value is $650,000)
- There is a property transfer tax (PTT) in BC. You are charged this transfer tax when you make changes to a property’s title. This tax is based on the fair market value of the land and improvements the tax is: 1% on the first $200,000, 2% from $200,000 up to $2,000,000 and 3% on the value greater than $2,000,000. (Example: Fair market value of $650,000 property = $11,000 PTT payable)
Edmonton’s advantages over Calgary
- Edmonton is a global leader in the artificial intelligence (AI), machine learning (ML), and Nanotechnology. The University of Alberta houses the National Institute for Nanotechnology and is ranked #2 in the world for AI and ML and top’s Calgary’s schools in every field.
- Edmonton has a well-balanced economy: Petrochemical industries (reserves second only to Saudi Arabia), financial centre (Canadian Western Bank, ATB, Servus, TD, Manulife), retail: The Brick, Katz Group, AutoCanada, Boston Pizza, Pizza 73, Liquor Stores GP, Shaw Communications, Booster Juice, Earl’s, Fountain Tire
- Closer proximity to Duvernay and Montney shale formations which rival the entire US reserves, Gold mines which could see a 10x valuation over the next 10 years, and Uranium mines which could see a 3-5x valuation over the next 10 years.