AdvantageBC doesn’t just promote Canada’s brand. It makes the brand better via financial services breakthroughs, the international business centre improves our credentials.
At Vancouver’s Expo 86, the world got a close-up look at our city and country, and liked what it saw. The challenge for Vancouver — and Canada — was to sustain this sudden international attention; to turn it into economic benefit and growth.
Enter AdvantageBC, with the mandate of promoting Canada as a favourable location for international business. On this 30th anniversary of the organization, previously known as the International Financial Centre BC (or IFC), current President and CEO Colin Hansen explains the non-profit society’s inception and purpose:
“What the federal government put into place [in 1986], and then morphed it into a provincial program, was to incent companies to locate here in British Columbia and Canada. Part of the philosophy behind that was that, if you want to attract international business, you have to have the financial services as foundation for that broader commercial activity.”
A key way to achieve this is to create awareness in the global financial community of BC’s International Business Activity (IBA) tax incentive program, administered by the province’s Ministry of Finance. Via the IBA program, a company incorporated in Canada and with a permanent establishment in BC, can claim a refund of up to 100% of its corporate provincial income taxes paid on qualifying international financial transactions. The IBA program allows for up to a 100% refund of the total BC taxes paid on eligible international income.
Because it is focused on international business conducted from BC, the IBA program is well suited for such businesses as large exporters, banking and financial services, wealth/asset management, corporate treasury operations, life sciences, and film/TV distribution.
For AdvantageBC’s outreach and promotion of the IBA program and other BC-based elements of tax and business competitiveness, the fertile ground these days is Asia, says Hansen. “If you were to take the top 1,000 companies in the world that are going to be expanding their international activities, and rank them, 90% would be in China.”
Problem: typically, they’re thinking which U.S. city should be their first North American office. So, “we walk them through the advantages that Canada has over the United States as a place from which to do international business. Then a big part of our pitch is why Vancouver, or another city in British Columbia, makes the most sense.”
Drum roll: Vancouver is the closest major international airport to Asian airports. Shipping distances through BC ports are significantly shorter than taking goods through U.S. ports. BC time zones also mean businesses can deal with Europe in the morning, and Asia in the afternoon.
B.C. is also a natural gateway for business and investment between North America and Asia. To cite just one example, when Guangfa Securities, China’s fourth-largest brokerage firm, decided to expand its international business presence, it chose British Columbia for its North American head office. (For ranking, click here)
AdvantageBC is currently working to create another financial advantage: extending Canadian settlement hours by five hours, to 8 p.m Pacific Time (PT) in Vancouver, BC. For decades, the regime has been tied to a 6 p.m. Eastern Time (ET) cut-off—in Toronto, ON meaning 3 p.m. (PT) in BC. Canadian financial institutions need to be able to serve their customers for more hours each day. If we can’t, then we risk seeing them move their financial service transactions to other parts of the world, says Hansen.
“If you’re having a ship loaded in Vancouver Harbour, typically as soon as you get certification that the goods are loaded on the ship, you’re going to get paid for that shipment. Currently, if you could not get that certification by 2 p.m. (PT), you will not get paid until the next business day. If that’s a Friday of a long weekend, you may not get paid until the following business day, next Tuesday.”
Partly, as a result of other AdvantageBC advocacy work, China in 2014 designated Canada as a renminbi (RMB) settlement hub, serving North America. Now, according to P.K. Chan, Regional Head for the Industrial and Commercial Bank of China: “Our Vancouver settlement desk remains open until 5:30 p.m. (PT), which means we have a real-time overlap with the business day in China to sort out currency transactions between Chinese companies and their business partners in North America.”
All part of the great story AdvantageBC has to share, as Hansen likes to say—and Iain Black, President and CEO of the Greater Vancouver Board of Trade, concurs:
“With competitive tax incentives, a high quality of living, and a strong workforce, British Columbia has a very compelling story to tell. For 30 years, AdvantageBC has been working to ensure that the world hears that story and understands our province is one of the best places in the world for corporate investment.”
Black remains bullish on both the organization and the prospects for BC going forward. “Our organization has been a proud supporter and partner of AdvantageBC since its foundation in 1986, and we look forward to working together for years to come, to further increase international business activity in our region and province.”