News Releases and Op-Eds
Finlayson Op-Ed: Canada flirting with recession (Troy Media, Business in Vancouver)
The latest economic growth report from Statistics Canada casts a cloud over the country’s economic outlook for 2015. Real gross domestic product (GDP) fell at a 0.6 per cent annualized rate in the first three months of the year, considerably worse than even forecasters of a pessimistic bent were expecting. Digging into the details, it is clear that the slump in global oil prices is taking a measurable toll on Canada’s energy-centric economy.
Non-residential investment plunged by 15 per cent in Q1, led by sharp cuts in capital-spending by the oil and gas industry. In recent years, the energy sector has accounted for more than one-third of all non-residential investment, as well as for roughly one quarter of Canada’s merchandise exports. So the epic downturn in oil and natural gas markets is dampening overall private sector capital outlays and weighing heavily on Canada’s export receipts.
Harsh winter weather also played a role in the gloomy Q1 report -- consumer spending came in below consensus, as many Canadians apparently decided to stay indoors.
Economists define a “recession” as two consecutive quarters of declining real GDP. We are half way there, and some recent economic data signal further softness into the second quarter.
Finlayson Op-Ed: Tax policies discourage small business from getting bigger (Troy Media)
The latest federal budget confirms and reinforces what seems to be an enduring belief among many Canadian policy-makers that it is better for enterprises to stay small than to build up their top lines, bottom lines and employee head counts. According to Budget 2015, the Conservative government plans to lower the federal small business income tax rate from 11 per cent to 9 per cent by 2019. The rate reductions will come in four half-point steps, starting in January 2016. There is to be no change in the general federal corporate tax rate on income above the small business threshold level ($500,000) – that rate remains at 15 per cent.
All of the provinces follow the same general approach as Ottawa, by setting their small business tax rates below the rates charged to medium-sized and larger firms. British Columbia, to take one example, presently levies a 2.5 per cent small business tax, while imposing an 11.0 per cent tax on earned income above the threshold amount. The net result is summarized in the accompanying table: the combined federal/B.C. tax rate on small business income is currently about half of the rate on other income, with the gap set to widen over the next few years.
Finlayson Op-Ed: Workers’ bargaining power to rise as labour shortages proliferate (Business in Vancouver)
The critical role of skills in a modern economy and the fact that many employers continue to report difficulties in finding qualified personnel raise questions about the future supply of workers. A number of business leaders have voiced alarm about current and/or potential labour shortfalls. Some worry that the overall economy could be de-railed by widespread shortages of workers.
In thinking about this topic, it is useful to begin by considering the larger economic picture and the lessons from past experience. Concerns about labour shortages are not new, tending to wax and wane with the state of the economy. Temporary labour supply-demand imbalances in particular occupations, regions, or industries are not uncommon. But as an empirical matter, serious and persistent shortages of workers have been rare in Canada. The reason is that the emergence of imbalances in parts of the labour market typically leads to institutional, behavioral and policy responses that, over time, serve to eliminate or mitigate the effects of shortfalls in the supply of workers.
RELEASE: Business Council of BC welcomes Canada's balanced budget,
notes caution on the country's economic outlook
The Business Council of British Columbia welcomes the Government of Canada's balanced budget which includes several new budget measures to support a diversified economy and to advance economic growth for the country. The government deserves credit for moving steadily toward a balanced budget, although with a slim $1.4 billion surplus in 2015-2016, following the global financial crisis of 2008-09 and the current period of relative economic uncertainty.
Finlayson Op-Ed: The Sobering Reality Behind Business Incentives (Troy Media)
Recent news stories from both sides of the Canada-U.S. border highlight the growing role of business incentives and “subsidies” in shaping the climate for corporate location and expansion decisions.
The big three U.S. automobile producers are in the midst of downgrading their presence in Ontario as they build new plants in various American states as well as Mexico. Asian and European automobile producers are also stepping up capital spending in the U.S. and Mexico.
One of the factors behind this trend is the rich incentive packages provided by U.S. state and local governments keen to secure auto-related manufacturing plants and jobs. While Ontario and the Canadian government have also been prepared to spend taxpayers’ money to lure automobile investment, so far they have been unwilling to match the stupendous sums on offer in states such as Kentucky, South Carolina, Tennessee, and Michigan.
Finlayson Op-Ed: Post-secondary education still the ticket to better jobs (Troy Media)
It is almost one year since the B.C. government unveiled details of its plan to re-engineer the post-secondary education (PSE) and training system. The Liberal government’s “Skills for Jobs Blueprint” will see additional funding directed to expand capacity to educate/train people in high-demand occupations – and fewer dollars available for programs in other parts of the system. An important factor behind the revamp is a belief among policy-makers that the “supply” of and “demand” for skills are out of alignment in the contemporary labour market.
Statement: Business Council supports new minimum wage policy
“The Business Council supports the government’s decision today to implement a modest increase of the statutory minimum wage of $0.20 to $10.45 and to index future increases to the consumer price index as the Council has previously advocated,” said Jock Finlayson, Executive Vice President and Chief Policy Officer, Business Council of British Columbia.
“This brings British Columbia’s minimum wage policy in line with most other jurisdictions in Canada and provides a fair and predictable approach to future increases that businesses can plan around.
Whitworth Op-Ed: Liquefied Natural Gas is a Generational Opportunity (Vancouver Sun)
The debate about the future of liquefied natural gas in British Columbia is generating plenty of heat, but often too little light. A casual observer can be forgiven if he or she is just a bit confused about whether LNG will come to B.C.
Strip away the rhetoric, however, and a truth remains: In a growing world economy hungry for cleaner forms of energy, the market for B.C.’s natural gas remains strong.
As CEO of Seaspan ULC and chair of the British Columbia Business Council, I think it is important we remember this when considering LNG’s potential to shape our province for the better.
Finlayson Op-Ed: Too little investment puts BC economy at risk (Troy Media)
Economists have long worried about Canada’s sluggish productivity growth and the seemingly ever-widening gap with the United States on this key indicator of economic well-being. It is widely recognized that the problem stems in large part from relatively low levels of investment in Canada, particularly in certain types of assets that are strongly associated with productivity improvements in modern economies – machinery, plant, equipment, software, and digital and other advanced and process technologies.
Release: Budget 2015 Reflects Sound Fiscal Management and the Benefits of a Diverse Economy
The Business Council of British Columbia applauds today’s provincial budget, which features another three years of operating surpluses and a plan to reduce the province’s net debt measured relative to the size of the economy (GDP). Budget 2015 is built around prudent economic and revenue growth projections and includes a handful of modest, but well-targeted, spending increases.
“We support the government’s budget plan and acknowledge its steady stewardship of the province’s finances,” said Greg D’Avignon, President and CEO of the Business Council. “The government is focusing most of the proposed spending increases on health care and education while containing expenditure growth in most other areas.”
“We believe, however, that overtime it will be necessary to refocus efforts on strengthening BC’s competitive position through increased investments in infrastructure, further streamlining of regulatory processes, and the refinement of current tax policies to spur business investment and innovation,” added D’Avignon.
Finlayson Op-Ed: Economic prospects bright for BC (Vancouver Sun)
As Finance Minister Mike de Jong gets ready to table his 2015 budget, the incoming economic data paint a mixed picture. Projections for global growth have been marked down by the International Monetary Fund and other leading forecasting agencies. The Eurozone hovers on the brink of recession, China’s once frenetic economy is slowing, and the prices of many internationally traded commodities remain in the doldrums.
Canada has also lost a step, with real gross domestic product (GDP) shrinking in November and the job market seeming to run out steam as 2014 progressed. Last month’s decision by the Bank of Canada to trim its trend-setting overnight lending rate by 25 basis points signalled policymakers’ worries about the state of the national economy.
Release: Strengthening Asian Investment in British Columbia
Today, the Honourable James Moore, Minister of Industry and Minister Responsible for British Columbia, joined by the Honourable Michelle Rempel, Minister of State for Western Economic Diversification, the Honourable Teresa Wat, B.C. Minister of International Trade, as well as the Business Council of British Columbia (BCBC) announced a new project to attract Asian head offices to Vancouver. This project, entitled HQ Vancouver, will build on Canada’s competitive advantages in key sectors and attract major Asian firms to set up their North American head offices in British Columbia.
Finlayson: Canada looks set for another year of modest economic growth (Troy Media)
The early weeks of 2015 have been a reminder that we live in a turbulent and risk-prone world. From plummeting oil prices to terrorist attacks in France, jittery stock markets, slowing growth in China, and renewed political uncertainty in Greece, there has been much to capture the attention of those inclined to fret about the future. But the underlying economic picture is more favourable than a glance at the newspaper headlines may suggest.
Finlayson Op-ed: Income inequality not a problem in Canada (Vancouver Sun, Troy Media)
Canada has long been known as a country that promotes the values of equity and fairness within our society. That helps to explain why the issue of economic inequality resonates with the media and among many of our political leaders. With a federal election expected sometime in 2015, inequality is sure to get more attention in the months ahead.
Globally, concerns over inequality are also on the rise. A recent article in The Economist magazine noted that 56 per cent of citizens in the advanced countries believe inequality is a problem. On most indicators, income inequality has indeed increased within most industrial countries, although it has diminished at the global level owing to a long stretch of relatively strong economic growth in China and many other emerging markets.
Finlayson: Low Interest Rates make this a great time to invest in infrastructure
Ottawa has the fiscal room to invest in infrastructure projects
Second annual survey shows strong partnerships and $373 million in charitable contributions by British Columbia’s business community
Today, the Business Council of British Columbia released the second annual study quantifying the charitable contributions made by the province’s business community, conducted by MNP LLP. The report, Prosperous Companies, Prosperous Communities found that in 2013 British Columbia businesses donated $373 million in cash donations, sponsorships and partnerships to the province’s charities with the top types of charities supported being social services, health, education and environment.
Finlayson: The Bank of Canada: An Overview (CPA Industry Update)
Release: Business Council of BC White Paper and Nov.7 Summit focus attention on BC infrastructure needs and issues
VANCOUVER, BC (Nov. 5, 2014) - With the economic prosperity of British Columbia and Western Canada relying increasingly on global trade and our ability to deliver goods to foreign markets, the Business Council of British Columbia (BCBC) today released Building BC for the 21st Century: A White Paper on Infrastructure Policy and Financing in advance of its second annual BC Business Summit (Building BC for the 21st Century: Innovation in Infrastructure), to be held on Friday, Nov.7 at the Vancouver Convention Centre.
Peacock Op-ed: Infrastructure - We need more and now is a good time to build (Vancouver Sun)
On several levels, it may seem that we have adequate infrastructure in place today. After all, British Columbia is blessed with a solid road network, excellent port facilities, modern airports (including the award winning YVR), leading telecommunications and wireless capacity, good water, sewer and solid waste systems, and generally high quality education and health care facilities. But the reality is greater global economic integration, population growth, demographics and the need to enhance BC’s competitive position means we cannot be complacent about infrastructure.
Finlayson: The fiscal impact of an aging population in Canada (Troy Media)
An update on Canada’s demographic future from Statistics Canada confirms what is readily discernable through casual observation: our population is growing modestly and becoming greyer at an accelerating pace.
Under all of the scenarios modelled by Statistics Canada’s researchers, the country’s population is on track to exceed 40 million by 2063 (up from 35.2 million in 2013). Three different scenarios are examined.
A slow-growth scenario puts the population at 40 million in fifty years’ time.
Under the medium-growth scenario, the population reaches 51 million in 2063.
And a high-growth scenario sees the number of Canadians swelling to 63.5 million.