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In a war of words and numbers, British Columbia's high-technology industry and the province's NDP government are duking it out over whether high-tech is growing fast enough and whether income taxes that are regarded by many as too high are causing the industry to falter.

The bickering follows the summer release of the provincial government's Profile of the British Columbia High-technology Sector, 1999 Edition. A joint project of BC Stats, the ministry of finance and the Information, Science and Technology Agency, the report presents a rosy picture of the industry. The Highlights section of the report trumpets: high-tech continues to outperform B.C. economy; employment up five per cent to 46,000; and high-tech exports up 26 per cent while high-tech imports rose nine per cent.

The BC Technology Report Card '99, published by the British Columbia Technology Industries Association (TIA), was released on June 15, the day after the government's report was made public. The TIA study is less sanguine about the industry's prospects. The report's foreword says, "The average technology worker's salary is down from 1997. Surveyed CEOs report that one of every two employees that leave a B.C. technology company actually leaves the province.

"The BCTIA is concerned that the drop in average technology salaries is due to the loss of some of our best and most senior people. At least 65 per cent of these CEOs also report significant difficulty in hiring executive, management and technical employees. By an overwhelming margin, CEOs report the number one issue federal and provincial governments need to address is that of growth-inhibiting taxation. Only 8 per cent of surveyed CEOs rated the provincial government as effective in creating a supportive environment for the technology sector while 79 per cent rated the provincial government as ineffective."

At a press conference to launch Report Card '99, TIA chair Paul Lee said, "This industry has tremendous potential, but there is cause for alarm. This technology industry is still growing, but that growth rate has dropped significantly. The high-tech industry is a bright light in B.C., but that light is beginning to dim."

According to the TIA study, employment in the industry grew by 5.2 per cent last year, compared to 7.3 percent in 1997. And average salaries dropped 0.4 percent last year, compared to an increase of 3.7 percent in 1997.

The TIA report says B.C.'s marginal income tax rates are pushing B.C. technology companies to create 40 per cent of their new jobs outside the province. According to the report, "Technology companies rely on the availability of skilled people - the industry's principal input. If we consider that the global skills shortage means stiff competition for the most skilled employees, and that these people are highly mobile and motivated, it's easy to understand why B.C.'s technology leaders fear for their ability to compete for key talent. The biggest problem is that one of B.C.'s most important industries has been handcuffed by the second highest personal income taxes in North America."

Ironically, the TIA report is based in large part on the "hard numbers" of the BC Stats study, complemented with industry opinions, practices and trends obtained from the industry association's own survey of 216 CEOs. Tom O'Flaherty, who is in charge of Report Card '99's research and data analysis, said the TIA report contains qualitative information "you don't get from statistics."

Executive director George Hunter told CDN the study backed up long-standing industry rumours and gossip. "We've been talking about these issues for a while," he said. "The report card is the first quantitative evidence we've had to support the anecdotes."

The provincial government may need some convincing. Andrew Petter, Minister of Advanced Education, Training and Technology, said the BC Stats study showed "pretty positive strength in the high tech industry." Petter said the fact that high tech exports were up 25 percent over the previous year "explained why BC technology companies were creating so many jobs out of the province."

Even with the number of new positions being created out of province, Petter said, the rate of growth of B.C.'s high tech industry was 16 per cent, "which is still very strong."

Petter was critical of the TIA report card, saying it was "not based on a scientific poll," because it used a survey of 216 CEOs in an industry comprising 6,843 companies.

Other highlights of Report Card '99 include:

* The average annual technology salary is $43,500, 36 per cent higher than the B.C. average.

* In 1998, technology companies created one of every six new jobs.

* Some 65 per cent of technology companies in B.C. have five employees or less.

* Thirty-five per cent of the industry is located outside Vancouver.