BCBC In The News
BC Business: Cross-border shopping is way down in B.C.: report
Fewer B.C.ers are heading south for deals, although that's no surprise.
"The fall in the value of the Canadian dollar, unsurprisingly, has led to a decline in the number of British Columbians making short-duration visits to the United States," says a new report from the Business Council of B.C., which cites a whopping 28 per cent drop in same-day trips to the U.S. among British Columbians since early 2013, when the dollar was high.
Longer overnight trips are down substantially too: 23 per cent. But, as the report notes, there are at least two winners here: local retailers, which now have less competition from the states, and gas stations.
24 Hours: Lower Canadian dollar could benefit B.C.
A lower Canadian dollar appears to be beneficial for the B.C. economy, according to a new study.
Ken Peacock, author of the Business Council of B.C. report published Tuesday, said a higher dollar means people are keeping their spending local.
“It makes imports more expensive, if you’re talking about outside cross-border shopping. That makes inflation a little higher,” he said.
And people used to cheaper groceries and gas would likely lose those savings, which takes away from extra money they have to spend locally.
But those negatives would struggle to stand out in the face of the $1.2 billion British Columbians are estimated to spend in the U.S. over a single year.
That billion-dollar figure was calculated based on short-term trips to the U.S. from 2009 to 2012 by the Business Council. The latest report showed short-term trips in March 2015 were 28% down from the 2013 high — a loss of about 148,000 trips each month. Longer term, two-day or more trips also fell by about 20,000 per month.
According to the business council, the rate of growth for retail sales in B.C. has more than doubled since the dollar’s fall.
CBC: Cross-border shopping down 28 % since 2013: B.C. report
Cross-border shopping trips from B.C. to the U.S. are down 28 per cent since a peak in early 2013, according to a new report from the Business Council of B.C.
In early 2013, the Canadian dollar was near parity with the U.S. dollar, but now trades at about 81 cents US.
"The fall in the value of the Canadian dollar, unsurprisingly, has led to a decline in the number of British Columbians making short-duration visits to the United States," stated the report released Tuesday.
The result is about 148,000 fewer same-day cross-border trips each month from B.C. to Washington state, the report found.
Over the same period, retail spending in B.C. has picked up considerably, which the report attributed to several factors, including more British Columbians buying goods — including gasoline — at home.
Vancouver Sun: Cross-border trips from B.C. down 28 per cent due to dollar drop
The drop in the value of the dollar has led to 148,000 fewer same-day trips to the U.S. from B.C. in the past two years, a 28 per cent decrease, according to a report from the Business Council of British Columbia.
Overall, the drop in visits to the U.S. has led consumers to stay at home in B.C. where retail spending has increased by about $500 million annually, said Ken Peacock, chief economist for the BCBC. "Consumers as expected have responded to the devaluation in the Canadian dollar and are not making as many trips across the border to make consumer purchases," he said in a phone interview.
Retail sales increased by 2.5 per cent in 2013 and 5.6 per cent in 2014. While part of the increase has to do with economic growth in B.C., the decline in the number of British Columbians crossing the border to spend money in the U.S. has also been a factor, Peacock said. In the past two years, cross-border trips lasting two or more days have dropped 23 per cent to about 66,000 per month from 86,000.
Part of the retail sales increase has included a 10 per cent rise in the volume of gasoline sales in B.C. Meanwhile, Trans-Link reported an increase of $2.3 million or 0.7 per cent in fuel tax revenues in 2014 compared with 2013, according to TransLink's 2014 annual report.
Globe and Mail: Europe’s struggle with underground economy offers lesson for Canada
[Excerpt] According to a government report last year, tax evasion costs Italy around €91-billion ($127-billion) annually. It’s been estimated that Italy’s “shadow economy” relative to GDP is 21 per cent; that’s just behind Greece at 23 per cent. It’s a problem that plagues many European countries; one that they are only starting to get serious about addressing now.
It’s a subject that the Business Council of British Columbia has been giving some thought to as well.
According to a recent report issued by the council, the size of the underground economy in Canada falls in the range of 5 per cent to 8 per cent of GDP. However, the study suggested that the issue of “unobserved, unreported and untaxed economic activity” was more prevalent in B.C. than the country as a whole.
The council suggested that the reason this was the case was because British Columbia was more heavily weighted toward small, unincorporated businesses and the self-employed, where underground activities are more likely to occur. As well, the construction industry is proportionately larger in B.C. and as a business is historically prone to hide economic activity. Finally, B.C. has a thriving illegal drug industry that generates billions of dollars in untaxed revenue each year.
“Add it all up and it would not be surprising if the overall UE [underground economy] in British Columbia is equivalent to 10 per cent or more of the province’s reported GDP,” said the report.
Victoria News: Grey power puts crimp in health-care system
Look around folks. There are more of us than there is of them. Or so it seems when I’m elbowing my way to the Geritol section of the pharmacy.
Is it finally the dawn of Grey Power? Or are more of us being let out unsupervised? More of the latter, I fear.
In fact, the ranks of B.C. seniors aged 65 and over are growing four times faster than the ranks of working-aged citizens age 25 to 64.
Business Council of B.C. chief policy officer Jock Finlayson calls that “an extraordinary and unprecedented development.”
A BCBC report indicates the province currently has about 31 people, 65 and over, for every 100 working-aged persons. In 10 years that climbs to 41 seniors for every 100 working age BCers.
In 15 years on Vancouver Island the numbers look like this: Victoria -- 57 seniors per 100 working age citizens (37 now); Comox Valley – 61 per 100 (45 now); Cowichan Valley – 64 per 100 (42 now). In the Kootenay-Boundary country the ratio rises to 77 per 100 (45 now) and on the Sunshine Coast it is a staggering 80 per 100 (52 now).
Finlayson says this older population will put additional pressure on public expenditures while the capacity of the government to raise revenue is diminished with a smaller fraction of the citizenry working.
Vancouver Sun, Barbara Yaffe: BC's underground economy likely leads all other provinces
Have you ever paid a plumber under the table? Purchased pot from one of Vancouver’s proliferating marijuana dispensaries? Neglected to report rental income from a basement suite?
Such activities typically sidestep taxation, contributing to an underground economy the Business Council of B.C. believes is especially active in the province.
“We believe that unobserved, unreported and untaxed economic activity is more prevalent in British Columbia than in the country as a whole,” say council chief policy officer Jock Finlayson and chief economist Ken Peacock.
They contend B.C.’s underground economy could be equivalent to 10 per cent or more of reported GDP.
It is not so much that British Columbians are more dishonest or tax-averse than other Canadians. They just have greater opportunity to cheat.
“Our economy is heavily skewed toward self-employment and unincorporated small business, where unreported transactions are more common,” according to a report issued recently by the council.
Vancouver Sun: A nation of free traders? Not when other provinces are involved
[Excerpt} Ken Peacock, vice-president and chief economist of the B.C. Business Council, says the B.C.-Alberta deal’s biggest impact is probably the way it facilitates labour mobility, recognizing credentials of 130 to 140 professions or trades regardless of which province certified them.
This no doubt benefited Alberta when its oil-fired economy was running flat out, and now that B.C. is leading the economic pack, it will benefit us. Not to mention that it’s not much loss to the weaker economy when, as is often the case, workers who leave would otherwise be unemployed.
But it’s an embarrassment as well as an economic encumbrance to have so many vestiges of protectionism linger internally in an era when Ottawa is making such progress in opening up international trade. The CFIB members are right: it’s time for the premiers to get on with it.
Global News: BC's latest employment numbers provide cautious dose of optimism
Canada’s hobbled economy received an encouraging jolt Friday as the labour market showed a surge of 58,900 net jobs last month, many of which appeared in a sector considered key to the country’s rebound: factories.
The job-growth figures, released by Statistics Canada, provided a cautious dose of optimism the economy will begin chugging again after reversing in the first three months of 2015.
In B.C., the economy gained 30,600 positions, with 2,600 of the gigs in manufacturing.
“Trendlines show pretty weak job growth, frankly, for Canada and for B.C. looking over, say, three, six or nine months,” said Jock Finlayson of the Business Council of B.C. “Nonetheless, last month’s numbers are certainly hopeful. B.C., though, will do better than Canada, for sure, in terms of economic performance this year and next year.”
Times Colonist Guest Comment: Tourism Strengthens, diversifies our economy
[Excerpt] Similarly, tourism is important to the province of British Columbia and is a pillar of the B.C. Jobs Plan. This spring, Jock Finlayson of the B.C. Business Council remarked that: “The tourism industry and the advanced IT industry are the two sectors that will guide B.C. through this current resources slump.” Finlayson also remarked on how labour-intensive the tourism industry is, providing quality employment that keeps citizens engaged in the economy and gaining new skills.
Vancouver Sun: First Nations series: Staking claims in the B.C. economy
[Excerpt] Still, for every project being held up by First Nations opposition, there are many more examples of successful partnerships. Business Council of B.C. executive vice-president Jock Finlayson says his organization is nervous about growing aboriginal expectations and whether the cost of reaching agreements could make some projects financially unfeasible, but generally the council supports more involvement by natives in the economy through revenue-sharing and impact-benefit deals. "I think there are ways over time where we can potentially move to make this a bit of a competitive advantage for B.C.," said Finlayson. "I am struck that we are getting more done here jointly with First Nations in more of a 'kind of partnership' fashion than has been typically seen in other parts of the country where they have treaties."
Business in Vancouver: Million-dollar homes become symbol of growing inequality in Vancouver
[Excerpt] The Business Council of BC and BC Chamber of Commerce tackled the issue in a series of panel discussions and a 2013 report, which suggested modest investments in early childhood education, improving access to post-secondary education, introducing a tax credit for low-income working families and steady, predictable increases to the minimum wage.
Vancouver Sun First Nations Series: Staking Claims in the BC Economy
[Except] Still, for every project being held up by First Nations opposition, there are many more examples of successful partnerships. Business Council of B.C. executive vice-president Jock Finlayson says his organization is nervous about growing aboriginal expectations and whether the cost of reaching agreements could make some projects financially unfeasible, but generally the council supports more involvement by natives in the economy through revenue-sharing and impact-benefit deals.
"I think there are ways over time where we can potentially move to make this a bit of a competitive advantage for B.C.," said Finlayson. "I am struck that we are getting more done here jointly with First Nations in more of a 'kind of partnership' fashion than has been typically seen in other parts of the country where they have treaties.
Business in Vancouver: Site C dam energy cost concerns rising
[Excerpt] Business Council of BC executive vice-president Jock Finlayson agreed that there are many CEA [Clean Energy Act] upsides. They include its focus on tapping the province’s extensive renewable energy resources and fostering a greater role for First Nations in energy development.
But given the market realities of the shale oil and gas revolution and the huge reserves of natural gas the province has, he said B.C. “should take a fresh look at natural gas as a low-cost, and relatively low-carbon, energy source, including in the electricity sector.”
Vancouver Sun: Tax breaks that target small business hurt the economy more than they help
The big tax breaks that the feds and the provinces give to small business retard economic growth more than they foster it, says a new study from C.D. Howe Institute.
The study cites previous research suggesting that if small businesses are able to duck taxes, the cost of adding this amount to the load carried by other businesses or citizens could create a net loss to the economy. And the total amount of tax revenue lost to the federal provincial treasuries because some businesses choose slower growth over much higher tax rates was estimated to be $375 million a year — not huge, but significant.
This amount is made more significant, however, in the light of an analysis done last year by Jock Finlayson of the B.C. Business Council. He nailed down what ought to be obvious to policy-makers — that not all businesses are created equal.
For example, 55 per cent of B.C.’s businesses — all of which get major tax breaks — employ only their owners. The real job creators are the companies that grow to at least medium-size, if not large. Indeed, fewer than 10,000 businesses out of the nearly 400,000 in B.C. create 36 per cent of all jobs.
This reinforces the Howe analysts’ point that it’s better for the economy to spread business tax breaks among companies of all sizes.
BC Business: The #BCBiz Daily B.C.'s billion-dollar underground economy
B.C.’s underground economy is the third largest in Canada according to a recent Statistics Canada report. While this $5.9-billion industry may seem substantial when compared to other provinces, these figures may in fact be low. "The underground economy (UE) is a complex subject," writes Jock Finlayson of the Business Council of B.C. "Unsurprisingly, it is hard to measure transactions that are unreported, deliberately hidden, and/or undertaken in the 'shadows.'" As for the latter, the report explains: "For the purpose of this study, some illegal activities, such as those related to drugs and prostitution, have been excluded."
Vancouver Sun Editorial: Population changes pose policy challenges
Demographic projections for B.C. indicate that policy-makers need to start preparing now for several inevitable population shifts.
According to a new Business Council of B.C. report, a number of potentially problematic trends will soon become apparent.
B.C.’s population growth will be moderating in years to come, making economic growth tougher to achieve in the absence of significant, and alas unlikely, productivity gains.
The province also is poised to grow older and more urbanized, with smaller centres outside four key communities — Victoria, Vancouver, Abbotsford and Kelowna — finding it increasingly difficult to find workers.
By 2035, B.C. will be home to one senior for every two working-aged people.
The business council describes this stunning age shift as “an extraordinary and unprecedented development” which will have serious implications for government tax revenues and for the labour force. Seniors retire. They tend to pay less tax and consume more health care resources.
Troy Media: Vancouver needs to add head offices
[Excerpt] The Business Council of British Columbia (BCBC) is taking positive steps to attract Asian corporations to locate their head offices in the Vancouver area. The Council is providing funding and in-kind support valued at $1,221,000 - the Federal Government, through Western Economic Diversification Canada, is providing funding of $1,951,750 and the Provincial Ministry of International Trade is providing both funding and in-kind support valued at $3,385,250 - into its HQ Vancouver campaign, which was launched last February. This initiative puts Vancouver in competition with other cities around the world that are competing to get these and other firms and the benefits that come with them.
Business in Vancouver: India's sleeping economic tiger will take time to awaken
[Excerpt] But while B.C. business leaders and economists say India’s economic growth potential is impressive, it’s no China, and the growth of business opportunities in India will grow at a much slower pace.
“India is more about the future than the present,” said Jock Finlayson, executive vice-president and chief policy officer for the Business Council of British Columbia. “I think there is a potential and it’s a huge market. I think commerce with India will grow, but it’s going to grow slowly.
Kamloops This Week: Seniors set to dominate population
The city and region need to gear up for a decline in population growth, as well as a future in which the area has one adult over 65 for every two adults in the workforce.
A report from B.C. Business Council released this week found the province’s population increase is slowing from robust growth of the 1980s and 1990s. The report details a slowing in population growth that reached 2.6 per cent a year in the early 1990s to less than one per cent today.
Author Ken Peacock said Kamloops shares some urban aspects with those core areas and can expect to attract northerners looking for warmer climes, as well as Greater Vancouver residents seeking lower housing prices and an end to gridlock commutes.