BC Business Matters:
Productivity and Wages
An important long-term challenge facing British Columbia is to improve upon the province’s rather lackluster productivity record. In recent years, BC has trailed the national benchmark on overall business sector productivity by around 10%. In 2012, BC ranked sixth in the country in business sector productivity. Moreover, the province has had very limited success in boosting economy-wide productivity since the 1980s.
Overqualified Workers and the BC Government’s “Skills for Jobs Blueprint”
Late last month the provincial government provided some details on its planned re-engineering of the public post-secondary education (PSE) and training system, which will see additional funding directed to expand capacity to educate/train young people in high-demand occupations – and, presumably, result in fewer dollars being available to fund programs in other parts of the PSE system. One of the key factors behind the revamp is a belief among policy-makers that the “supply” of and “demand” for skills are out of alignment in the current labour market.
On the Size Rankings of National Economies – and Where Canada Stands
The World Bank has just released updated estimates of the size of all national economies for which reliable data could be collected. A much remarked finding of the Bank’s new report is that based on one set of projections, China will soon overtake the United States as the world’s biggest economy.
The shifting meaning of 'market access'
Canada is an open and trade dependent nation – a significant portion of our jobs, wealth and government revenue derives from trade and other forms of commerce with markets around the world. In the simplest sense, market access in this context means the ability to have Canadian goods and services ‘freely’ enter foreign markets – and to ensure we have cost-effective access to imports from elsewhere. By any measure, market access is therefore essential for our economic well-being.
Climate Assessment for the United States
The United States has been internally conflicted about climate change, until now, it seems. With the release of the Third National Climate Assessment, the Obama administration has drawn on a wide range of observations about weather, precipitation patterns, water quality and availability, health, infrastructure, agriculture and the oceans to arrive at firm conclusions about humanity’s responsibility for increasing levels of greenhouse gases in the atmosphere. The arguments in the assessment report are bolstered by including descriptions of impacts and feedback loops that are specific to each region of the United States. There is nothing like examples to demonstrate concreteness. Overall, the conclusions echo those of the International Panel on Climate Change (IPCC) but with a uniquely American flavour. Despite its 800+ pages, it is written in a way that is accessible to general readers.
In 2013, BC's economy was stronger than estimated
According to figures recently released by Statistics Canada, BC’s economy grew by 2.0% in 2013. Considering that prior to the official data being released the consensus estimate was that economic growth would come in at 1.4% in 2013, the above-expectations 2% expansion looks pretty good. In a historical context and relative to other provinces, however, BC’s economic performance was more on the modest side. Over the past decade and a half, real GDP growth has averaged 2.4% so 2013’s gain was a little subpar. And in comparison to other provinces BC ranked fifth among the ten provinces.
BC's growing orientation towards Asia
The ascent of China and other Asian countries more generally is transforming the global economy and reshaping trade patterns. The extent of this shift is exemplified by the fact that last year China overtook the United States to become the world’s largest trading country. This historic reorientation of trading patterns is certainly being felt here in British Columbia. BC’s merchandise exports to China have soared over the past decade, rising from just over $1 billion to $6.6 billion last year. Other Asian countries are also buying more BC products. Collectively, Asia Pacific countries now account for as big a share of BC’s exports as the United States, despite the natural trading advantages that BC has with the US – geographic proximity, a common language, similar institutions and business practices, a comprehensive free trade agreement (NAFTA) and a long history of close commercial and people-to-people ties.
Women, Work and the Economy
In Canada and British Columbia, males and females are more or less equally represented in the total population (50% to 49%), and the picture is broadly similar in the labour force (52% men and 48% women). However, females occupy a disproportionate percentage of part-time jobs, at 65%. At the same time, females now receive 60% of all post-secondary degrees, diplomas and certificates awarded by universities, colleges and technical institutes. Even so, on average women earn only ~68% of what male workers do, while having a life expectancy of 83 years – four years more than males. What does this say about the lost opportunity for the Canadian and BC economies?
Exportable Services: An Important Source of Job Growth for BC
More than three-quarters of all employed people in British Columbia are engaged in producing “services” rather than “goods.” Services span a wide array of industry sectors, everything from retail and wholesale trade to professional services (engineering, law, accounting, architecture, etc.), scientific and technical services, transportation, financial services, accommodation and food services as well as services that are mainly delivered or at least largely funded by governments (public administration, education, and health and social services). Many of these service industries loom large in the labour market. Retail and wholesale trade, for example, together employ 350,000 British Columbians, another 200,000 or so toil in the broadly-defined education sector, 150,000 work in financial services, and 275,000 earn their livelihood by providing health-related services.
Business Growth, Job Creation and Innovation
Canada ranks as one of the best places in the world to start a new business, according to an annual survey done by the World Bank. But the country does less well when it comes to encouraging enterprises to grow – and in fostering private sector innovation.
Skill Shortages: Weighing Employers' Views
While academic researchers and policy analysts continue to debate the extent and implications of skill shortages, employers in Canada seem convinced that shortages exist and are an important factor constraining business expansion.
The Demand for and Supply of Skills
One of the puzzles in the contemporary Canadian labour market is the co-existence of skills shortages in some regions and occupations along with an unemployment rate hovering near 7% as well as mounting evidence of significant “under-employment” among many workers – particularly young adults. This situation suggests there are labour market imbalances, and that they appear to be growing larger over time. Many Business Council members tell us that British Columbia is experiencing mismatches in the demand for and supply of skills.
Plenty of Job Openings for People with the Right Skills
For anyone planning a career path or deciding what to take or study at school, the provincial government’s WorkBC website (http://www.workbc.ca/) is a very useful resource. It contains information for job seekers and employers along with lots of statistics on the labour market outlook for different regions and occupations.
How Much Are Employees in BC Earning?
The question of what people are paid in their jobs is obviously of great importance to individual employees. It’s also relevant in a broader, macro-economic sense. Because the bulk of total household income comes from employment, it follows that the spending power of most people is strongly influenced by how much they earn from working.
Canada-South Korea Free Trade Agreement (CSKFTA) is Good News for BC
The conclusion of the protracted negotiations to establish a free trade agreement with South Korea is a positive step for British Columbia. South Korea is the fourth largest destination for BC’s merchandise exports (after the US, China and Japan), so improved access to its market will be helpful for a number of the province’s export industries. The agreement also lays the foundation for an expansion of services trade, business travel, and investment between the two countries.
Investment Intentions in BC: A Pause Before the Boom?
Last week, Statistics Canada released its annual investment intentions survey results for the coming year (2014). Completed over the period of October through January, the survey gauges the near-term investment intentions of a large number of private and public sector organizations across the country, with a focus on planned investment activity in three areas: residential building, non-residential structures, and machinery and equipment (M&E).
Business incentives – trade barrier or necessary economic development tool?
“Canada is a guppy in shark infested waters.” Sergio Marchionne, CEO Chrysler Group
With that remarkably candid assessment of Canada’s ability to compete with automotive industry incentives being offered by Mexico and various American states for a $3.6 billion manufacturing investment tentatively planned for the Chrysler’s Canadian operations, the company’s CEO ensured that his views hit the business pages of newspapers across Canada. And his comment was made after the Ontario government had already committed to significant tax incentives for the automotive sector and the federal government had just unveiled a budget featuring a half billion dollar Automotive Incentive Fund.
The Middle Class is Not Disappearing After All...
Statistics Canada’s new survey of household finances throws cold water on the often-voiced assertion that the ranks of the country’s middle class have been dramatically thinned by the combined forces of rising income inequality, globalization and disruptive technological change.
A Snapshot of Government Debt Across the Land
The start of the 2014 government budget season is an opportune moment to update the figures on accumulated public sector debt for Canada’s ten provinces as well as the national government.
Building Links Between Disabled Persons and the Workforce
About 700,000 people in BC are characterized as having some kind of disability, and approximately half of these are in the “traditional” working age group of 15 to 64. The good news is that 56% of disabled British Columbians are employed, albeit this is about 20% lower than the share for non-disabled workers. Some 64% of the 150,000 disabled persons who are not in the workforce are precluded from working due to the severity of their limitations.