The International Financial Centre British Columbia (IFC BC) is a non-profit society with a mandate to promote international financial activity in British Columbia. The IFC BC communicates the many advantages British Columbia has to offer as a location for corporate investment, including an educated and multilingual workforce, an attractive business environment, and a high standard of living.

Federal

• The IFC BC was established by the Federal Government in response to concerns that an increasing number of jobs, specifically those related to international departments of leading Canadian banks, were being located offshore. Further study showed that Canada was losing not only jobs, but more importantly, the expertise associated with those jobs.
• As a result, the Minister of Finance introduced legislation for Canadian banks to take deposits from and make loans to non-residents from a base within Canada; profits earned on such activities would be exempted from Federal taxes. Minister Wilson recognized that the measure would only be really attractive if such activities were also free from provincial taxes as well.
• As a result, Ottawa designated Montreal and Vancouver as an IFC.

Provincial

• In 1988 the Province of British Columbia passed two pieces of legislation: the International Financial Business Act and the International Business (Tax Refund) Act. These acts allowed financial institutions, such as banks, trust companies, brokerage firms, and money managers, to carry on specified international business from a base in the lower mainland. In the fanfare surrounding the creation of the IFC Vancouver, a number of companies registered.

Onset of Problems

• As government support dwindled, the initial promise of the IFC was not fulfilled. Firms found the legislation far too restrictive to be attractive to a broad range of global financial players. For instance, the previous legislation dictated that all transactions had to be done at arm's length.
• In addition, banks were restructuring and exiting businesses, such as trade finance and foreign exchange.  The new firms offering these services were not eligible to register with the IFC.

Changes to the IFA Program

• In late 2002, an  independent review of the IFC recommended that the Government expand the scope of the IFC program to at least make it competitive with its counterpart in Montreal. In response, the International Financial Activities Act (IFAA) was proclaimed into law in May of last year and became effective September 1, 2004.
• The IFAA introduced two substantial changes to the IFA program.  First, any type of company, not only a financial institution, became eligible for registration. All companies that meet the criteria can qualify based on their international financial activities.  Second, companies registering under the program are able to deal with related parties and subsidiaries.
• Companies registered under the IFA program can receive up to a full refund of provincial corporate income taxes paid on qualifying activities.

The IFC BC Society Today

• The IFC BC serves the government, businesses, and the people of British Columbia.  It is tasked with the job of reaching out to professionals in the business community and communicating the tax advantages available to companies under the IFAA .
• Its first—and most important— priority is to locate companies that might fit within the parameters of the IFAA, inform them of the favourable tax treatment available in British Columbia, and convince them to locate an office in British Columbia.
• In addition to bringing new companies into the province, the IFC BC acts as a liaison between the government and the members.  Members who have issues they wish to raise with provincial officials can bring them to the IFC BC to present on their behalf.  The IFC BC also works with members as well as the business community to lobby for new legislation or changes to the existing legislation. 

Word is spreading that British Columbia is a place from which internationally oriented firms can do business profitably. The 2010 Olympics will further focus the spotlight on British Columbia’s bountiful assets. The IFC BC hopes to attract many companies to set up offices in the Province in the years to come, providing greater employment opportunities for the many highly skilled, multi-lingual and productive people that call British Columbia and Canada their home.

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