BC Business Matters:
Employment up slightly in August but still waiting for a sustained improvement
The August employment report contained a bit of good news for BC, but not enough to materially change the generally muted labour market conditions in the province.
Working Age People Drive Inter-provincial Migration
After many years of a net inflow of people from other parts of Canada, BC is now in a period of net interprovincial outmigration. As the graph below depicts, net migration tends to cycle up and down, largely reflecting relative economic strength and job opportunities. This is the fourth period of negative interprovincial migration BC has experienced since 1970.
New Census and National Household Survey Highlight Key Demographic Trends in BC
Statistics Canada has started to release data drawn from its 2011 census and a major National Household Survey which the agency undertook at the same time. The results confirm what most people already know: the population is aging, with the front-end of the baby boom generation having reached 65 in 2011; Canada’s society is urbanizing, as more of us are living in large and mid-sized cities; there are more one-person households, reflecting the high incidence of divorce as well as longer life spans; and the workforce and population are becoming more multi-ethnic, as immigration continues to shape the nation’s demographic profile.
All of these national-level trends are certainly evident in British Columbia.
Exports, Skills and Incomes
Small open economies depend heavily on trade to stimulate growth, provide employment and sustain incomes. The development of competitive export-oriented industries is particularly important for small regional economies that, by definition, aren’t able to reap the economic advantages associated with having large internal/domestic markets. British Columbia is a good case in point.
The Skills to Pay the Bills
BC’s post secondary education system is a source of both pride and frustration; thinking about the system can prompt a sense of either optimism or pessimism about the future. On the positive side, BC has a great mix of world class research universities and regionally diverse colleges and technical institutes among today’s 25 publicly-funded post-secondary institutions. The University of BC is consistently ranked in the top 30 in the world (of over 17,000 universities), and BC consistently compares favourably among Canadian institutions on key metrics that measure the quality and effectiveness of its universities. Overall, our post-secondary system has many attractive and in some cases even world-class attributes.
Update on the BC Government's Financial Health
This week’s release of the 2012-13 Public Accounts provides a timely opportunity to review the provincial government’s financial position and the underlying trends in the public finances. Produced by the Office of the Comptroller General, the Public Accounts cover the financial activities of all provincial Ministries and Crown agencies on a consolidated basis. It is the best available source to follow what is happening with the government’s activities in the area of spending, revenues, borrowing and debt management.
What does the new document show?
All Quiet on the Inflation Front
Statistics Canada’s latest update on the Consumer Price Index (CPI) confirms that inflation remains muted across the country and all but invisible here in British Columbia. This may come as a surprise to those convinced the cost of living is climbing, but an examination of the full array of consumer purchases indicates an absence of apparent upward pressure on the overall price level.
Sovereign Wealth Funds: A Double-Standard in Canada?
June 5th marked the closing of the three-day Canada-Asia 2013 conference, hosted by the Asia Pacific Foundation of Canada, in Vancouver. The conference featured an array of panel discussions, plenary sessions, and networking opportunities—all focusing on how Canada should position itself with the emerging Asian economies.
During the final panel discussion, panelist Professor Khee Giap Tan posed a challenging question which, because of time constraints, was unfortunately cut short. He was critical of the double-standard between developed and developing countries with respect to Sovereign Wealth Funds (SWFs). He drew attention to the contradiction of how developed countries want unfettered access to markets and investment opportunities in developing countries, yet when investment flows the other way, developed countries often limit and scrutinize market access.
Good News: Canada (and by extension BC) is Sustainably Competitive
Whether we like it or not, today the wealth of a nation is primarily measured by its Gross Domestic Product, which is an annual summation of the value-added of the goods and services produced within a country's borders in a specific time period. However, what about the value of things that are uncounted in GDP but still integral to the functioning of our economic, social and governance systems?
Building Stronger Relations with Asia - a Strategic Imperative for Canada
For the past 10 years the Asia Pacific Foundation has conducted a comprehensive opinion survey of Canadians to elicit their views about Asia across a variety of topics, primarily economic. With the growing importance of Asia in the global economic context and deeper trade relations developing between Canada and Asia, BC and the West in particular, this opinion research provides important insights for policy makers navigating through complex public views on economic relations with Asia.
This year's research points to some disconcerting trends for those who, believe that Canada and BC need to build closer relations with Asia and the key countries in the region. If we are to benefit significantly from the 'Asian Century,' Canada must forge constructive and more extensive economic, cultural and political linkages with Asia
Le Nord Pour Tous: Quebec Pushing the Boundaries of Mining Development
Those familiar with mining development in Canada are all too conversant with the tricky juggling act of resource extraction. The demand for social and environmental responsibility, government royalties, and maintaining global competitiveness can all pull in different directions. Government leaders across Canada often pride themselves in having fostered a mining sector that is one of “the most efficient, effective and competitive in the world,” backed by a “world-class environmental protection regime” (Natural Resources Canada, 2013). But despite this optimistic picture, mining development in Canada is often a hotly contested policy arena. Look no further than the Federal government’s push for the rapid development of Ontario’s ‘Ring of Fire’, or the recently rejected coal mine in Comox, to get a flavour for the tug of war between vested interests.
Jobs, Income and Post-secondary Education: Some Key Facts
The current tough job-market facing many freshly minted university and college graduates is causing some people to question whether it still makes economic sense for young adults to pursue a post-secondary education. For the most part the answer is “yes.” The data indicate that those with post-secondary credentials generally do better in the job market and also have higher incomes over the course of their working lives.
British Columbia should continue to focus on Building Connections with Asia
More so than other jurisdictions in Canada, BC’s economy is being reshaped by Asia’s influence on the global stage. The sheer size of the population in the region suggests that BC should be doing everything it can to continue to leverage the economic benefits coming out of Asia.
Willingness to Pay
The conversation of late in BC has been about energy and resource development with a “hair on fire” commentary from many quarters and a whole tranche of people who think energy and mining are two evil incarnate activities. Energy and the products of mining produce a vast range of goods and services that we take for granted and that have enabled a rising standard of living for billions of people. We have created some amazing technology and the ability, for the most part, to live a life that is quite comfortable (at least in developed countries), primarily because we have been able to harness energy in its various forms to do work and create things.
The challenging reality of global carbon intensity trends
For policy junkies, politicians and citizens interested in global energy trends and climate change issues, there is one resource that should be on everyone’s required reading list – the reports from the International Energy Agency.
In a policy arena that sees the solution side of climate discussions frequently lost in either inaccessible scientific analyses or passionate values debates that substitute beliefs for fact-based dialogue, the IEA provides a welcome array of carefully calibrated data and analysis of energy production and consumption trends. Using relatively easy-to-understand facts on global energy supply and demand, the IEA grounds its climate change analysis through the lens of real carbon output measures, which are then assessed against carbon output trajectories and the policy pathways required for a transition to lower carbon energy systems.
Examining Youth Unemployment Levels
As Canada and other industrialized countries struggle to return to a sustainable economic growth trajectory following the steep downturn of 2008-09, the difficulties being felt in the job market are proving particularly painful for young adults.
Youth unemployment rates have surged in many countries since 2008 – and have reached truly frightening levels in parts of Europe. Across the 17 countries that comprise the common currency Eurozone, unemployment among those aged 15 to 24 stands at 25%. In Greece and Spain, the figure exceeds 50%, while Italy and Portugal are grappling with youth unemployment rates in the vicinity of 35%.
Global Economic Growth Patterns, the New Middle Class and Some Implications for BC
Many of the world’s advanced economies remain mired in low economic growth trajectories. And as the latest IMF report on global GDP shows, 2013 is shaping up to be a year of stalled recovery and sputtering/no growth in many developed economies. However, the same report highlights the continued growth of developing economies and notes that this is the main factor that’s keeping the global economy as a whole from slouching further toward stagnation.
Let's Tax the Rich - Oh, We Already Do
Last week’s budget offers a timely reminder of something that many Canadians may not realize: a surprisingly large proportion of federal government revenue comes from the personal income tax (PIT). The second biggest revenue source is the corporate income tax, followed by the GST. According to the budget, in the upcoming fiscal year Ottawa’s PIT revenue will reach $131.5 billion, which amounts to half of all of the money collected by the national government.
Who pays the personal income tax? Most Canadian households except those with quite low incomes generally pay something. But an examination of data recently released by the Canadian Revenue Agency indicates that the PIT burden falls mainly on the most affluent families. Consider the following summary statistics:
Coal in the Local Spotlight
The Mayor or Vancouver recently tabled a motion “to prevent the expansion of, or creation of new, coal export infrastructure within the City of Vancouver”. The Mayor of White Rock has done something similar. Vancouver’s Mayor, the Mayor of Burnaby and the Chief of the Tsleil-Waututh First Nation are hosting an event in the near future aimed at rallying support to stop the proposed expansion of the Kinder Morgan pipeline. Then there are all the various groups and campaigns that seem to spring up around election time which seem to say “no” to just about everything and “yes” to things that cost a lot money (but without any ideas about how to pay for them, e.g., the proposal for a new subway along the Broadway Corridor recently advanced by the City of Vancouver and others).
LNG in a Shifting Global Context
As British Columbians begin to get familiar with the possibility of having a new LNG industry driving our natural gas sector, we would be wise to have a clear understanding of just how tough the competition is within this rapidly developing global sector.