A British Columbia court has exposed details of a corporate tax rebate program aimed at luring companies to set up international finance operations in the province, ostensibly to create jobs and turn Vancouver into a global financial hub.

The B.C. Court of Appeal ruling provides a glimpse into a multi-million-dollar tax refund claimed by one of the companies that took advantage of the program: Canada's Toronto Dominion Bank.

The International Business Activity (IBA) program has become a hot-button issue ahead of the May 9 provincial election after a New York Times piece earlier this week exposed what it called "a sweet deal for businesses, offering them tax breaks in an unusually opaque arrangement."

The TD Bank example is "just the tip of the iceberg," a watchdog agency says.

The court ruling reveals that TD Bank, which reported profits of $2.5 billion in the first quarter of this year, claimed a provincial tax refund under the IBA of more than $2.8 million in the 2012 tax year. That year, TD reported an annual profit of $6.47 billion.

However, the tax refund has been tied up in the courts after the province claimed TD Bank missed the province's filing deadline.

In its April 21 decision, the appeal court ordered the province's commissioner of income tax to reconsider the bank's request for an extension to file its 2012 return.

The incentive program was created through the International Business Activity Act in 1988 as a way to entice companies to set up international financial operations in the province. While it was created by the Social Credit government, in recent years, it has been expanded by the Liberals.

Both foreign and Canadian companies are eligible for the tax rebates.

Until now, the size of refunds given by the province to individual companies hadn't been revealed, although the B.C. government has said $140 million in rebates had been handed out under the IBA since 2008, including $21 million this past year alone.

TD Bank acknowledged it was a member of the IBA program but would not provide details about the international nature of its operations in the province.

'No benefit' to taxpayers

A non-profit watchdog agency said the revelations should anger B.C. taxpayers.

"It's an emotion of frustration on one side and rage on another," said Dermod Travis, executive director of Integrity B.C. "I don't think that British Columbia taxpayers know that they're subsidizing some of the most profitable companies in Canada and we don't know why."

Travis said the $2.8 million refund claimed by TD Bank shows the need for greater transparency when it comes to provincial tax rebates for big business.

"I'm angry, and I think when most British Columbians hear that news, [they] will be angry ... mostly because I know that's just the tip of the iceberg. We're looking at a group of companies that do not need these type of breaks. We're getting no benefit from it."

The B.C. Finance Ministry, which oversees the IBA, rejected the accusations of secrecy.

[There's] nothing sinister about the program. - Jamie Edwardson , spokesperson, B.C. Finance Ministry

There's "nothing sinister about the program," said ministry spokesperson Jamie Edwardson.

He wouldn't reveal any details about individual corporate tax refunds.

"Government is bound by the requirements of taxpayer confidentiality set out in the IBA Act, a standard of Canadian tax law," Edwardson said. "This is true for taxpayer information in corporate and personal income tax returns."

B.C. Liberal Leader Christy Clark was questioned about the International Business Activity program while campaigning in Kelowna on May 3. (Media Pool )

B.C. Liberal Leader Christy Clark has defended the program, saying it's primarily aimed at building business links to Asia.

"We want to attract head offices and businesses to British Columbia from around the world, because that's new money coming into our economy. And we believe we are the gateway to Asia here," Clark said earlier this week during a campaign stop in Kelowna, before the size of TD Bank's tax refund was revealed.

100% tax break in first 2 years

The IBA provides provincial tax breaks of 100 per cent on certain business activities for the first two years, with the exemption dropping to 25 per cent over five years.

If I was a taxpayer in B.C. I would be hard pressed to come up with reasons as to why I am providing tax credits to ... some of the most profitable companies in the world. - Dermod Travis, executive director, Integrity B.C.

It's not just businesses getting the tax breaks. They can extend to foreign employees who relocate to B.C. as long as they make at least $100,000 annually, according to B.C. budget documents.

That provision in particular galls Travis of Integrity B.C.

"These tax breaks are being financed by the shift worker at Canadian Tire who starts at 9:00 and finished at 5:00 and is struggling to make ends meet," he said.

"If I was a taxpayer in B.C. I would be hard pressed to come up with reasons as to why I am providing tax credits to ... some of the most profitable companies in the world."

The IBA program is marketed by AdvantageBC, which describes itself as "a non-profit society with a mandate to promote international business in British Columbia."

Big banks part of program

The program has 82 "core members," but the website lists just 66 by name, including the Toronto Dominion Bank, Royal Bank of Canada, RBC Dominion Securities, Canadian Imperial Bank of Commerce and Scotia Capital, as well as foreign financial institutions such as the Bank of China, HSBC Bank Canada and KEB Hana Bank of South Korea.

Former finance minister Colin Hansen now heads AdvantageBC, a non-profit that markets the province to companies as a place for international business. TD Bank is a member. (Jacy Schindel/CBC)

Colin Hansen, a former Liberal finance minister in B.C., is the president and chief executive officer of AdvantageBC.

Asked about TD Bank's $2.8 million tax refund, Hansen said: "TD has located activities in B.C. that qualify under the program. That is a decision made by the provincial government, not by AdvantageBC."

Hansen defended the IBA program.

"All of these companies that are registered to use the program are locating activity in B.C. that would not otherwise be here," said Hanson.

"Therefore, it's not that B.C. is foregoing a tax base. It's a tax base they never would have had in the first place. So they are contributing to B.C."

The B.C. government says the IBA has created 1,500 jobs in the province, based on data from 2001 to 2009 and an audit done by MMK Consulting suggests it could be as high as 3,600.