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Journal of Commerce: US recovery to boost BC and Canada

British Columbia's economy is going to grow, but slowly and cautiously.

That was the message from Jock Finlayson, chief policy officer at the Business Council of British Columbia.

He presented the council's economic forecast for 2015 and 2016 to the Associated Consulting Engineers of B.C. (ACEC-BC) last week.

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Vancouver Sun Editorial: Slumping oil prices mostly good news for BC

[EXCERPT] Overall, B.C. is poised to be a net beneficiary of declining crude prices. As Business Council of B.C. chief economist Ken Peacock noted last week: “This is a positive macro economic benefit that will help lift B.C.’s. economy in 2015.”

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Business in Vancouver: Bank of Canada responds to plunge in oil prices by cutting overnight rate

[EXCERPT] Business Council of BC economist Jock Finlayson said while this move is not positive for Canada as a whole, there is a “slight net positive” for British Columbia.

“That will be good news for a lot of people in B.C. because of the high levels of household debt and the large mortgages that people carry on their balance sheets – unless you are a saver,” Finlayson said.

“If you are living off your savings, it’s a different picture.”

He cautions that even though this is good news for the province, he was quick to point out that the rate cut was based on bad news. 
 

“The decision has been taken because the global economic outlook has softened and the Canadian economic outlook has deteriorated, so one has to be careful using the term ‘good news,’” he said. “Having said that, the impact of the decision itself, in isolation, will be slightly positive from a B.C. macroeconomic point of view.

“But it’s not transformational. It’s a small measure.”

Overall, Finlayson said he isn’t surprised by the Bank of Canada’s move, given the global economic situation, but he acknowledged that the announcement took the markets by surprise.

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Business in Vancouver: How low can oil go and who gets hurt?

[EXCERPT] "The whole thing about this is, ‘How low for how long?’” said Ken Peacock, chief economist and vice-president of the Business Council of British Columbia.

“It’s generally good for B.C., but there is this new little wrinkle in the B.C. context, and that’s if it results in [LNG] projects being delayed or maybe even not going ahead.

“If oil prices hit $50, and then turn around and start to climb and this is a short-term thing, that’s a very, very different world than if oil prices stay low for two years.”

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Business in Vancouver: Falling oil prices could put $1.5 billion in BC pockets

[EXCERPT] "For B.C., it’s a net positive,” said Ken Peacock, chief economist for the Business Council of British Columbia. “When gas prices drop like they have, it’s a direct savings for families and households, and that gives them more money to spend, and that boosts the economy.”

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Vancouver Sun, Pete McMartin: Lessons for BC from Alberta

[EXCERPT] “If LNG comes to fruition in a significant way,” wrote B.C. Business Council executive director Jock Finlayson in an email to me, “let’s not repeat Alberta’s mistake by ‘spending/consuming’ virtually all of the economic rents associated with producing LNG. A substantial portion of such rents should be saved and invested for future generations.”
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“It is tempting at times,” wrote Finlayson, “to envy a jurisdiction like Alberta that is endowed with vast resource wealth, the exploitation of which has made them the richest province in the country. But because Alberta’s economic success is so inextricably tied to a single economic sector, it is in some respects in a very fragile and vulnerable position. The multi-decade oil and gas boom, interrupted at times by periods of falling prices, has made Alberta wealthy, but a case can be made that it also gave birth to a somewhat distorted economy in which labour costs, other business costs, and even public sector costs have been driven up across the board by high levels of activity and outsized paycheques in the energy patch.”

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CBC Television: Ken Peacock on oil prices

BCBC Chief Economist Ken Peacock discusses declining oil prices with Andrew Chang on the CBC Vancouver evening newscast.

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Times Colonist: Collapsing oil prices hit BC residents working in Alberta

[EXCERPT] B.C. Business Council chief economist Ken Peacock said the slowdown in Alberta from collapsing oil prices does have negative implications for other provinces.

But Peacock noted that not all of the British Columbians commuting to Alberta for work will be laid off or have their hours cut, so it is only a portion of the 1 to 1.5 per cent of the B.C. labour force that would be affected.

“But if people who are making good incomes who are commuting to Alberta get laid off, it will impact their households,” said Peacock.

He noted there are B.C. companies that do business in Alberta that will also be affected by the slumping oil-based economy.

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Vancouver Sun: Falling diesel prices won't affect bottom line for trucking companies

[EXCERPT] Business Council of B.C. executive vice-president Jock Finlayson said falling fuel prices may give trucking companies a short-term increase in profit margins, but doubts those higher profits will last.

“Truckers will obviously be happy to see lower diesel prices because they are a huge part of their overall cost structure,” he said. “But if these low prices are sustained over time, you will see downward pressure on (freight rates) because it’s a highly competitive industry. None of this happens instantly, and it could take months to play out.”

Finlayson said consumers will be the ultimate beneficiaries of falling petroleum product prices.

“If the price of food fell by 30 or 40 per cent, the primary beneficiaries wouldn’t be any of the suppliers or the intermediaries in the food value chain,” he said. “It would be the consumers of food products, and that’s what I see happening (in the trucking industry).”

Finlayson said no one could have predicted six months ago that global oil prices would plunge by 50 per cent, and he doubts that current low prices will last long-term, unless the global economy goes into a tailspin.

“But I think it’s true that the outlook for oil prices over the next couple of years is dramatically lower than people thought six months ago,” he said.

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Vancouver Sun: Collapsing oil prices hit BC residents working in Alberta

[EXCERPT] B.C. Business Council chief economist Ken Peacock said the slowdown in Alberta from collapsing oil prices does have negative implications for other provinces.

But Peacock noted that not all of the British Columbians commuting to Alberta for work will be laid off or have their hours cut, so it is only a portion of the 1 to 1.5 per cent of the B.C. labour force that would be affected.

“But if people who are making good incomes who are commuting to Alberta get laid off, it will impact their households,” said Peacock.

He noted there are B.C. companies that do business in Alberta that will also be affected by the slumping oil-based economy.

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Vancouver Sun: Economic Uncertainty clouds Premier's Natural Resource Forum

The provincial government’s 12th annual Premier’s Natural Resources Forum will convene next week in Prince George with a cloud shading some of the sunny optimism that has shone on British Columbia’s resource industries in recent years.

“The big story is the overall global setting and global backdrop, and for commodities, that’s relatively weak,” said Ken Peacock, vice-president and chief economist for the Business Council of B.C.

Peacock added that it is not all gloom though.

While slower growth in Asia has curbed prices for commodities such as steelmaking coal and copper — dulling the prospects for B.C. mining — forestry is experiencing more of a rebound due to recovery of the American economy.

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Vancouver Sun, Editorial: B.C. poised for strong economic growth in 2015

[EXCERPT] To some extent, B.C. and Ontario will be doing well by default, the result of the declining fortunes of the oil-producing provinces, Alberta, Saskatchewan and Newfoundland and Labrador.

But 2.6- or 2.7-per-cent growth for B.C. — projected respectively the Business Council of B.C. and the Conference Board of Canada — is nothing to complain about, and better than the 2.3-per-cent GDP growth of 2014.

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Globe & Mail, Gary Mason: Impact of plunging crude prices varies across the Western provinces

[EXCERPT]   "Among other things, plummeting global prices [for oil] will deliver a blow to Canada's terms of trade, which translates into slower growth in nominal incomes and GDP," says leading economist Jock Finlayson, chief policy officer with the Business Council of B.C.

"It is also pushing down the exchange value of the Canadian dollar, which means a dollar of Canadian income buys less in global markets – that is, we have become poorer in a global sense. Because the oil, gas and pipeline sector has, in recent years, accounted for one-third or more of non-residential business investment, the fall in oil prices also has negative implications for the level of business capital spending in Canada, which will further dampen economic growth."

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iPolitics: The Drilldown: KXL showdown in D.C. leaves Prentice undeterred

[EXCERPT] A recent report by the B.C. Business Council is putting a damper on the size of megaproject investments like those in the LNG industry, notes the Vancouver Sun‘s Vaughn Palmer.

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Vancouver Sun, Vaughn Palmer: B.C.’s ‘whopping’ capital project list is a bit of a whopper

Inventory of projects inflated by LNG and others that likely won’t proceed, business council warns

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Vancouver Sun, Barbara Yaffe: Global forces dampen BC's economic outlook

Few could have predicted 2015 would see B.C. and Ontario competing to lead the pack on economic growth.

The Ontario-B.C. horserace reflects stalling economies — due to oil price declines — in formerly booming Alberta, Saskatchewan and Newfoundland.

The Business Council of B.C. forecasts provincial GDP will grow 2.6 per cent this year, up from 2014 growth of roughly 2.3 per cent.

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Business in Vancouver: Blue skies ahead for BC economy, analysts predict

[EXCERPT] The price of oil is predicted to stay low throughout 2015. That could have an impact on the price of LNG, which is tied closely to the price of oil.

Because of that link, don’t be surprised to see more LNG investment decisions delayed in 2015, wrote Business Council of British Columbia economists Jock Finlayson and Ken Peacock in a December 29 commentary.

“We would not be surprised to see more proposed LNG projects in B.C. postponed or deferred until global energy markets stabilize,” they wrote. 

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Vancouver Sun: Outlook for BC business in 2015 remains stable

[EXCERPT] Ken Peacock, chief economist at the Business Council of B.C., also said the U.S. recovering economy is a major factor in the province’s stable outlook.

He noted the U.S. economy is growing at a “much more meaningful rate,” topping three per cent.

Despite the increasing importance of exports to Asia, led by China, the United States accounted for nearly half of B.C.’s $33 billion in exports in 2013.

And Peacock noted that even though the forest sector is not as large as it once was, it is still the largest source of export revenue for the province.

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Reuters: Vancouver's high housing prices post headaches for job recruiters

[EXCERPT] "Housing prices are a concern for that exact reason," said Ken Peacock, the chief economist at the Business Council of British Columbia. "It makes it more challenging for younger people starting a family."

Vancouver's expensive housing also made it tough for companies to bring in new talent from other regions, in particular senior executives, he said

"There is a sticker shock phenomenon," Peacock said. "A lot of these people are coming from 5,000 square foot estates and here they get a three-bedroom bungalow."

Also posted online with the Financial Post and the South China Morning Post

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Vancouver Sun: Kathy Kinloch completes first year of reinventing BCIT

[EXCERPT] Greg D’Avignon, president of the Business Council of B.C., has followed Kinloch’s career for several years and sees her vision of bringing educators, businesses and students together as the next step in the elevation of B.C.’s economy.

“The battle is going to be for capital and for talent, and Kathy as much as anyone in the province really understands that,” said D’Avignon.

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