BCBC In The News
Metro Vancouver’s cooling housing market is biggest factor for BC economy downshift: BCBC
British Columbia’s economy is expected to lose momentum this year, as a slowdown in Metro Vancouver’s once red-hot housing market will no longer be able to sustain the province’s economy as it has in past years.
With home sales dropping, most notably in Metro Vancouver, since late spring 2016, fewer new homes will be built in the province this year, which will affect BC’s overall economic performance, according to a Business Council of BC (BCBC) report published last week.
“There’s still going to be a reasonable amount of activity but it’s not more than the previous year so it won’t be adding to growth. It will probably be detracting slightly from growth,” BCBC Chief Economist and Vice President Ken Peacock tells BuzzBuzzNews.
Vancouver Sun: B.C.'s working poor: Low-wage jobs keep many living paycheque to paycheque
[Excerpt] B.C. business groups say that being forced to suddenly pay much higher wages would harm small companies, lead to lost jobs and cuts in hours for employees.
“For B.C. businesses that employ low-wage employees, moving quickly to a $15-per-hour minimum wage would amount to at least a 40-per-cent increase in labour costs, likely creating a shock to the labour market and causing many smaller firms to scale back their demand for entry-level workers in particular,” said Jock Finlayson, executive vice-president and chief policy officer at the Business Council of B.C.
Business in Vancouver: Budget 2017 includes new national housing strategy
[Excerpt] Budget 2017 is more policy-oriented tinkering than spending-oriented, as the Liberal government’s major spending plans – including $120 billion in infrastructure over 10 years – were largely laid out in the 2016 budget.
“Given the expectations and some of the buildup in advance of this budget, it turns out it’s largely a kind of a status quo document and I think that reflects the unsettled environment we’re in," said Jock Finlayson, executive vice-president and chief policy officer for the Business Council of BC.
He said it might be rash for the Canadian government to consider any major changes to taxation policies when it’s not yet known what kind of shakeup might come south of the border with respect to tax policies there.
“In terms of any further tax changes, that’s really been punted out into the future, and wisely so,” said Finlayson. “Given developments in the United States, it would be premature for the government of Canada to be overhauling in any meaningful way tax policy in Canada until we have a better idea of what the U.S. is going to be doing.”
Business in Vancouver: Budget’s housing strategy too little to fix housing crisis: BCBC
Transportation and lack of affordable housing consistently rank as the top two concerns for Vancouver businesses and average citizens, so a new National Housing Strategy sketched out in the 2017 Budget is likely to get a lot of attention.
“That’s $1 billion a year for 11 years,” Finlayson said. “B.C. might get $110 million of that per year, so I put it to you: What is $110 million of incremental federal funding for a national housing strategy actually going to do that addresses any concerns that people have about affordability in the B.C. market? My answer is that it will do very little.
“If government has money to pour into this area, it probably should go into to incenting the development of purpose-built rental housing aimed the middle income households," Finlayson said. "And I don’t know if that’s the focus here because they don’t really give us much detail.”
Times Colonist, Vancouver Sun, CTV, Global, News 1130, Business council says B.C.'s economy will lose momentum for 2017-18
The Business Council of British Columbia says the provincial economy is poised to "downshift" in 2017.
The council's annual economic review and outlook says the real estate market, consumer spending and exports are slowing, leading to the loss of momentum.
The report forecasts gross domestic product, or the value of goods and services provided, will slow to an average pace of 2.2 per cent for this year, with a similar performance expected for 2018.
The report says the biggest factor is the slowdown in the residential real estate market in Metro Vancouver, which ripples through the wider economy with less demand for services and some retail segments.
The council says the near-certain imposition of stiff U.S. penalties for softwood lumber imports from B.C. also weighs on the province's exports for 2017 and 2018.
Business in Vancouver: Liberals’ LNG fixation shortchanged other sectors: critics
[Excerpt] “On LNG, it is clear the government over-promised when it talked about five LNG plants by 2020 and a vast new prosperity fund largely financed with LNG-related revenue streams,” said Jock Finlayson, executive vice-president and chief policy officer for the Business Council of BC.
“That said, continued upstream gas investment in northeastern B.C. suggests that the prospect of LNG remains alive and that we may well see a couple of significant projects advance in the next few years.”
Finlayson said it’s odd that the Liberal government has focused exclusively on exporting B.C.’s abundant natural gas and not promoted its use as an energy source domestically “even though it’s the cheapest option.”
Journal of Commerce Video: Jock Finlayson at Buildex Vancouver
Finlayson also spoke to the Journal of Commerce about the current state of the B.C., Canadian and global economy, and addressed concerns and potential benefits of the new U.S. administration.
He also discussed why the Lower Mainland is seeing an economic and employment boom, while the rest of the province is not seeing similar gains.
Business in Vancouver: British Columbia’s not-so-revenue-neutral carbon tax
[Excerpt] Jock Finlayson, chief policy officer for the Business Council of BC, agrees with the Fraser Institute’s assessment.
“They presumably did this in an effort to persuade the business community that the carbon tax has not increased overall costs for companies operating in B.C.,” Finlayson said. “But for the vast majority of firms in B.C., the truth is that the carbon tax has increased the aggregate cost of doing business in B.C.”
Vancouver Sun: Christy Clark tells board of trade an MSP cut was best way to dole out surplus
[Excerpt] B.C.’s job market will strengthen with the MSP cut, and businesses that pay MSP premiums on behalf of employees will find it more attractive to retain workers, said Jock Finlayson, executive vice-president of the B.C. Business Council.
“I’m not saying 100 per cent of the cost reduction for the employer is passed to the employee on day one, but over time we’d expect a hefty chunk of that cost savings to show up in the form of an upward wage adjustment,” said Finlayson.
Times Colonist: Businesses cheer PST break on electricity, cut to corporate tax
[Excerpt] On the whole, the business community gave Tuesday’s budget a thumbs-up.
“In macro terms, it is a pretty good budget and it will have an impact on business and consumer confidence,” said Jock Finlayson, executive vice-president of the Business Council of B.C. He noted that when the PST on electricity, tax-rate cut and MSP initiative are combined, it has a solid impact on the bottom line.
“The MSP cut is a benefit to a lot of employers, a lot of large and mid-sized companies pick up that tab for employees. Those employers will see a reduction in payroll taxes, which should be good for jobs and hiring, as well as cash flow.”
The Chronicle Herald: Reaction mixed from interest groups responding to B.C.'s 2017-18 budget
Greg D'Avignon, Business Council of British Columbia:
"Delivering a balanced budget within a climate of modest economic growth and a mixed outlook for commodities sets B.C. apart and signals that the province is a stable place to invest and do business."
Goldstream News Gazette: B.C. BUDGET: Property transfer tax take to drop to $1.54 billion as hot market cools
[Excerpt] While the tax on real estate deals has become a huge cash cow for government, B.C.’s economic growth has also become increasingly reliant on the jobs associated with home construction, renovation, sales and related business.
“We have become quite dependent in terms of the growth dynamic on the broad housing and real estate sector,” said Business Council of B.C. executive vice-president Jock Finlayson. “As that cools off, and I think it is cooling off, we’re like to see the economy lose a bit of momentum.”
Finlayson said he’s satisfied that the government’s budget has allowed for that cooling, with its 2.1 per cent forecast for economic growth, slightly below the average forecast of economists.
Merritt Herald: Medical premiums cut by half in B.C. budget
[Excerpt] Jock Finlayson of the Business Council of B.C. said large employers would benefit as well as individuals.
“A fair chunk of that MSP premium reduction is going to flow through to business or employers generally, including public sector employers,” Finlayson said.
Times Colonist: $50-billion B.C. budget trims medical premiums, boosts education
[Excerpt] As for business, it will benefit from a decision to phase out the seven-per-cent provincial sales tax on electricity. The B.C. Liberals promise to cut the tax to 3.5 per cent on Oct. 1 and eliminate it on April 1, 2019.
The budget trims the small business tax rate from 2.5 per cent to 2 per cent beginning April 1 — the second lowest rate in the country behind Manitoba.
The Business Council of B.C said the PST cut on electricity will particularly help forestry, mining and manufacturing.
“Today’s budget offers a series of tax measures which, together, will help to keep B.C. on a path towards a more productive and competitive economy,” Jock Finlayson, executive vice-president, said.
Business in Vancouver: Reactions to B.C. Budget 2017
Jock Finlayson, chief policy officer, Business Council of BC
“It’s going to be a fairly good budget from the perspective of business,” Finlayson said. “We’re happy with the removal of the PST on electricity. That’s going to be helpful for a lot of the export industries.
“The reduction in the MSP premiums, that will actually help employers because a lot of employers do pay MSP on behalf of their staff. And generally, the government’s stewardship of the of the province’s finances has been quite prudent and that tends top be well received in the business community.
“Having said that, there continue to be challenges around the competitive environment in B.C., especially for export industries, so we’ll be pushing the government – whoever it is – to implement the recommendations of the Commission on Tax Competitiveness.”
Vancouver Sun: B.C. budget offers cut to MSP premiums, but no reduction to PST or income tax
[Excerpt] Reaction to the budget was mixed – it earned praise from the business community and those who had long opposed MSP premiums, cautious support from teachers, and scorn from those who’d expected more money for child welfare and social services.
BC Business Council vice-president Jock Finlayson praised the PST reduction on electricity for businesses.
“It’s a pretty good budget, I think it will have a tangible impact on business confidence and consumer confidence,” he said.
Finlayson admitted that government’s decision to focus almost entirely on MSP instead of other tax reductions “took us a bit by surprise,” but the PST electricity reduction had been the top request of the business community for tax reform. “We’re really pleased to see that move,” he said.
That was echoed by Catalyst Paper Corporation and coastal mayors in mill towns who praised the PST electricity change as a necessary measure to help save jobs in the coastal forestry sector.
Journal of Commerce: B.C. economy charges forward while the world wavers
B.C.'s economy is pulling ahead of the rest of Canada and construction is leading the charge.That's the opinion of Business Council of British Columbia executive vice-president and economist Jock Finlayson, who was one of the keynote speakers at the Independent Contractors and Businesses Association's 20th annual CEO breakfast, held at Buildex Vancouver.
"Construction is a long-term growth industry for B.C. with growth over a 15-year period at twice the pace of the economy," Finlayson said, though he cautioned non-residential construction is much weaker than residential work. "It's not an exaggeration to say B.C. has a housing and construction-centric economy."
Jobs in the Lower Mainland are also "skyrocketing," he said, though most jobs in the province are concentrated in metro Vancouver and the Fraser Valley.
B.C. was also the strongest province in Canada in terms of overall growth in 2015-16 and real gross domestic product (GDP) was 2.9 per cent in 2016. Finlayson predicted the province's GDP would slow to 2.2 per cent in 2017, and stay at that rate throughout 2018.
"This is based on a slowdown in lumber sales to the United States, along with a slowdown in retail sales and a slight decline in housing starts," he said.
Globe and Mail: B.C. Liberals’ pile of surplus cash masks serious deficit in services
[Excerpt] Economist Jock Finlayson, chief policy officer for the Business Council of B.C., doesn’t believe Mr. de Jong will have much room to play with after all the spending promises have been accounted for.
“I think the surplus will be fully spoken for – and perhaps then some – by the time we pore through the details of the budget,” he said.
He said government can count on growing revenues, although growth will slow compared to the year just ending. “Tourism is firing on all cylinders, high technology is doing well, film and TV production is setting new records,” he said, as just a few examples.
“While there will be some room for targeted tax measures over the course of a three-year fiscal plan,” Mr. Finlayson concluded, “it’s hard to imagine the surplus is large enough to finance big-bang tax cuts.”
BIV on Roundhouse: B.C.'s 20-year roadmap to prosperity
At 21:15 the Business Council of B.C.’s Greg D’Avignon delves into a new policy paper, BC 2035 outlining recommendations to government and private sector for a 20-year path to greater economic prosperity.
Globe and Mail: Will the foreign buyers tax endanger B.C.’s housing windfall?
[Excerpt] Working from those figures, the Business Council of B.C. calculated that the real estate sector – including construction, renovations and other spinoffs – accounted for 35 to 40 per cent of the province’s economic activity.
“It has played a big role in B.C.’s growth story,” said Jock Finlayson, economist and chief policy officer for the Business Council. “It’s not the only thing, but it has made an outsized contribution. And the government’s stronger-than-expected revenues are due in part to the strength of the housing industry – which of course is now diminishing.”