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ECONOMIC STRUCTURE



Industry Sectors

The industrial base of the North Okanagan is well diversified and like many other regions in Canada, it is growing in the area of services. Traditionally, the economy of the North Okanagan has been dependant on forestry and agriculture for growth and expansion. However, over the past ten years, there has been considerable growth in manufacturing and service economies. The globalization of the economy, easy export access and advanced technology have not only allowed new business to move to the region and still be competitive, but have attracted service professionals, national retailers, and advanced technology manufacturers.


Industrial Sectors (% of labour distribution)
  North Okanagan BC
Goods: Primary 8.3 4.6
Goods: Manufacturing 12.3 9.6
Goods: Construction 7.6 5.9
Services: Non-government 68.7 74.3
Services: Government 3.0 5.6

Source: BC Stats Regional District Demographic Profile, 2006 Census

The North Okanagan business community is characterized by a large percentage of small- and medium-sized enterprises. Ninety-one percent of all businesses in the region have less than twenty employees and those considered large businesses (200+ employees) constitute less than 0.5%. The economy is very diverse and no longer relies on one or two industries.

The increase in the service industries in this region can be attributed to the ease of transportability, the availability of technology, and the desire by professionals to enjoy the North Okanagan lifestyle while at the same time growing their businesses.

Number of Business Incorporations
Year N. Okanagan B.C.
2004 260 24,703
2005 421 30,937
2006 479 33,273
2007 504 34,036
2008 421 30,085


Source : Ministry of Finance, BC Government, 2006




Major Projects

The North Okanagan has major projects in various stages of progress. (Source: BC Major Projects Inventory):


Vernon Jubilee Hospital Expansion:

Multi-story diagnostic and treatment centre for the Vernon Jubilee hospital. Infusion Health KVH was awarded the contract to construct the project, along with the Kelowna General Hospital Patient Care Tower as a single contract in August 2008. As a single contract, the combined capital cost is $432.9 million (reported under Kelowna General Hospital Project ID 685). The Central Okanagan Regional Hospital District and the North Okanagan Columbia Shuswap Regional Hospital District are contributing a combined $166M toward the total capital cost of this contract. The expansions have been designed to meet Leadership in Energy and Environmental Design (LEED) Gold certification.

Status: In Progress
Construction started Start: Sep 2008
Estimated Cost ($ million)
Finish: Summer 2011


Sparkling Hill Resort and Spa:

A 150-room hotel, 240,000 sq. ft. wellness spa and conference centre to be developed in three phases is integrated with the summit and existing reservoir.
Phase 1 includes the hotel and is expected to complete in Spring 2010. Also included is 4,500 sq. ft. of commercial space. The City of Vernon approved rezoning and the Community plan.
Website:www.sparklinghill.com

Status: Construction Started
Start: Fall 2008
Estimated cost: $100 million
Finish: Spring 2010



Silver Star Ski Resort Expansion:

As part of a ten-year resort master plan, there are numerous ongoing projects. Concert Properties built 12 townhouses and a 40 unit condominium building in 2003. Phase 1 of the 54 unit Snowbird Lodge in the Village began construction in Spring 2004 and completed Feb 2005. Phase 2 of the Snowbird Lodge contains 60 units which completed construction in Summer 2006. The Ridge has 70 building lots with provision for single-family homes. The Vance Creek Hotel is a 19 unit leasehold development and the Pinnacles Suite Hotel has completed three townhouses in the East Wing. The Silverwood Lift completed construction Dec 2005.
Website: www.skisilverstar.com

Status:Construction started
Start: 1999
Est. Cost $ 150 million
Finish: Fall 2009





Labour Force

The labour force of the North Okanagan has many characteristics which can be found in full detail at BC Stats and Statistics Canada. Generally, the labour force consists of individuals 15 years and older who are employed, or unemployed and actively seeking employment. As of November 2009 the unemployment rate for the Thompson-Okanagan was 6.3%. The North Okanagan is a tourist destination region and therefore there are moderate employment fluctuations during the different tourist seasons. This is reflected in the percentage of full-time/full-year workers in the region.

Participation Rates (2006)

North Okanagan

BC

61.9%

65.6%

Source: BC Stats, 2006 Census


In the past the North Okanagan relied heavily on primary industries for its economic development growth. To this day, forestry and agriculture continue to be important industry sectors for the region. However, over the past five years the North Okanagan has encouraged the diversification of its economy, resulting in a significant increase in service industries in the area. Service industries have relocated or emerged due to:
  • availability of highly skilled workers
  • advanced education/training facilities
  • attraction and retention of professionals through quality of life opportunities
  • ease of accessing export markets
  • high quality/quantity of technical infrastructure
  • the portability of the service industry

Experienced Labour Force By Industry 2006

Total Industries

30,690

Agriculture, Forestry, Fishing & Hunting

2,320

Mining, Quarry, Oil & Gas Extraction

85

Utilities

220

Manufacturing Industry

3,685

Construction Industry

1,715

Transportation & Warehousing

790

Wholesale Trade

1,065

Retail Trade

4,640

Information & Cultural Industries

355

Finance & Insurance

975

Real Estate, Rental & Leasing

755

Professional, Scientific & Technical Services

1,655

Management of Companies & Enterprises

30

Administrative & Support, Waste Mgmt

1,070

Educational Services

1,840

Health & Social Service

4,065

Arts, Entertainment & Recreation

770

Accom., Food & Beverage

2,180

Other Services (excluding Public Admin)

1,565

Public Administration

915

Census 2006
Source: Statistics Canada

Updated March 2009


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Self Employment

Self-employment rates in the North Okanagan are above the BC average as many individuals take advantage of the entrepreneurial spirit of the community and the support resources available for small business. Much of the entrepreneurial development has occurred in the service sector, particularly in emerging industries in the high technology and tourism sectors. The location of the North Okanagan and the quality of life associated with the region often attract professionals to start up their profession and/or move their practices from other locations. Engineers, doctors, business consultants, accountants, architects, software producers, and many other professional service enterprises have moved to the area and are successfully providing services in the local community or are exporting their services domestically and internationally.

Percentage of Self Employed

North Okanagan

BC

8.5%

7.6%

Source: BC Stats, 2006

Updated March 09


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Labour Standards

The accompanying table presents a brief summary of important labour legislation in British Columbia.

Provincial Labour Legislation in British Columbia

APPLICATION

PROVISIONS

AUTHORITY & RESPONSIBILITY

Employment Standards

 

Employment Standards Act
Ministry of Labour

Minimum Wage

Cdn. $8.00/hr.

 

Hours of Work

Up to 40 hrs/week at regular pay

 

Vacation

2 weeks/year paid at 4% of gross annual pay

 

General Holidays

9 days/year with pay

 

Maternity leave

Up to 17 consecutive weeks without pay and full reinstatement

 

Parental leave

Up to 37 weeks without pay and full reinstatement (35 weeks for subsequent pregnancies)

 

Termination

Dismissal for cause with 2 weeks' notice or pay in lieu

 

Factory Standards

Standards for employee facilities in the workplace

Workplace Act
Workers' Compensation Board

Occupational Health and Safety

Workplace inspections for health/safety

Workers' Compensation Act
Workers' Compensation Board

Human Rights

Prohibits discrimination by race, ethnic origin, religion, sex and age

Human Rights Act
Council of Human Rights

Last updated March 2009


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Federal and Provincial Taxes

Corporate Taxes:
Business taxes in Canada are levied by federal, provincial and municipal levels of government and are similar to the basic forms of taxation in the United States. For a listing of municipal business property rates for the North Okanagan communities, please refer to the Real Estate section of this website.

The corporate tax environment in the province of British Columbia can be very favourable, especially for manufacturing, processing and research-intensive firms

Federal Tax:

British Columbia, in its 2010 budget, has reduced its corporate income tax rate to 10.5 per cent. And as of January 1, 2011 the rate will be 10-per-cent.The Canadian and British Columbian governments recognize the vital role of small- and medium-sized enterprises (SMEs) in the economy, and many federal tax incentives work to foster an environment in which SMEs can create goods, generate wealth and reach full potential for growth. Tax incentives provide the opportunity for small- and medium-sized businesses in Canada to prosper. Incentives include:

  • a lower corporate income tax rate
  • special deductions for small business
  • capital gains taxation exemptions
  • scientific research and experimental development tax credit
  • film tax credits

As well, Revenue Canada has recognized the need to make Canada a more competitive place for doing business and has taken steps to make the administration of taxes more efficient and provide a secure, paperless way to file returns.

Specific information about these federal tax incentives can be found at Industry Canada. More detailed information about federal tax credits can be found at Revenue Canada.

Provincial Tax:
Provincial corporate income tax rates in BC are expressed as a percentage of taxable income earned in the province. Small Canadian-owned businesses benefit from a preferred federal-provincial tax rate ranging from 15 to 29 percent, depending on the business payroll.


The province of BC also offers tax credits and incentives for investment. Tax credits available in BC include:

More specific information regarding corporate provincial taxes and tax credits can be found at the BC Ministry of Finance


Provincial Social Service (retail sales) Tax:

Provincial sales tax in British Columbia is 7%.

The Consumer Taxation Branch registers businesses that collect tax on behalf of the province; conducts field audits and inspections of these businesses' tax collection records; and carries out office audits and compliance programs.

Businesses must register with the Consumer Taxation Branch and collect social service tax (retail sales tax) on their taxable sales and leases, if they engage in any of the following activities:

  • selling goods at retail;
  • leasing goods as a lessor;
  • providing legal services;
  • selling parking rights within the Vancouver Regional Transit Service Area;
  • providing taxable services (e.g. repairs to goods);
  • providing telecommunication services.

The Consumer Taxation Branch will issue you a Certificate of Registration and provide information on your responsibilities.

Goods and Services Tax:

Currently the Goods and Services Tax (GST) is 5% and applies to the supply of most goods and services in Canada.  On July 1st, 2010, BC will be implementing a harmonized sales tax (HST) of 12% which will represent the provincial sales tax (7%) and the GST (5%) and will be administered through the Canada Revenue Agency. 

You must register for GST/HST if you are a person, business or organization operating in Canada with worldwide annual revenues from taxable supplies of goods and services over $30,000.00 in a single quarter or in four consecutive quarters.  As well, mandatory registration is necessary if you are a taxi or limousine operator whose fares are regulated by federal/provincial laws, even if the revenues do not exceed $30,000. 

Registration is not required; however you can voluntarily register for the following reasons:

  • to claim input tax credits (ITCs) to recover the GST/HST you pay or owe on your business purchases;
  • if you are just starting business activities and want to register before the total worldwide revenues of taxable goods and services exceed $30,000; or
  • clients prefer to do businesses with GST/HST registered organizations.

It is important to note that if you voluntary register for GST/HST, it is mandatory to charge and remit on sales of all taxable goods and services, file GST/HST returns on a regular basis and remain registered for a minimum of one year before cancelling the registration unless the commercial activities cease altogether. 

Anyone who is not registered cannot charge GST/HST to customers and cannot claim the input tax credits. 

More information is available from Canada Revenue Agency. (Link  http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/menu-eng.html )

Personal Taxes:
The Basic Income Tax Rate in British Columbia is expressed as a percentage of personal income tax rates determined under the Income Tax Act of Canada. In addition to the basic rate, the province charges high-income taxpayers a surtax. Information on the rates and provincial surtax can be found at BC Ministry of Finance

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