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Economy

As trusted economists and policy advisors to business and government leaders, the Council relies on sound, evidence-based analysis to inform its policy recommendations. Through diligent tracking of BC’s economic performance, we help identify the opportunities and challenges the province must navigate in order to reach its full potential.

 

An Updated Look at BC’s Inventory of Major Capital Projects

In this issue of Policy Perspectives, we provide a summary of capital spending on “major” projects in British Columbia.

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Finlayson: Low Interest Rates make this a great time to invest in infrastructure
(Troy Media)

Ottawa has the fiscal room to invest in infrastructure projects

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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.

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Getting a Handle on the Environmental Goods and Services Industry

Previous editions of the Environment and Energy Bulletin were concerned with the criteria and tools that can shed light on how green jobs and other environment-related activities contribute to the economy. This paper is another piece in the exploration of that topic. Here, we adopt a somewhat narrower focus by looking at “the environmental goods and services producing sector” of the economy.

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A Note on Infrastructure Investment and Government Debt

The Business Council recently published a white paper on infrastructure policy and financing in British Columbia. One of the points made in the paper is that investing in certain categories of infrastructure assets – particularly transportation, communications and energy infrastructure -- can help to strengthen the foundations for prosperity by boosting productivity, expanding the economy’s ‘supply side’ capacity, and improving the competitive position of local industries engaged in global commerce.

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Finlayson: The Bank of Canada: An Overview (CPA Industry Update)

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The global and Canadian gender gap, 2014

The global and local conversation about the economic potential of women and the foregone opportunity from not yet achieving full gender equality is heating up again. The last really big and prolonged discussion happened in the late 1970s, the heyday of feminist activism.

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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. 

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The State of Industry-First Nations Relations in B.C. – Part II: RECOMMENDATIONS

Through our series on the state of industry-First Nation relations in B.C., the Business Council has sought to document and take stock of the economic reconciliation process in the province. The results of this work have highlighted a number of important and mainly positive trends: 1) increased aboriginal business formations; 2) a proliferation of economic agreements between industry, government and First Nations; 3) growing own-source revenues and capacity improvements at the community level; and 4) a generally positive outlook for the future of economic reconciliation. However, the research has also identified some areas of concern that have the potential to constrain the ability of all parties to move further down a reconciliation path that maximizes collective economic opportunities.

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A tale of 2 countries – Canada and US (reversal of) fortunes in the post financial crisis period


For the majority of the post financial crisis time period, Canada has outperformed the United States on key economic metrics such as GDP growth, unemployment rates and median income growth.[1]

These results were (yes, past tense) impressive:  

  • In 5 of the past 6 years, Canadian enjoyed stronger growth in GDP than the United States;
  • Canada’s employment performance was better than the US, post financial crisis through 2013, reversing a long standing trend of American unemployment rates being lower than Canadian;
  • Over this same time period, Canadian incomes moved up faster than in the US.

However, our half decade of economic success relative to our American neighbours has come to an end.

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Port Metro Vancouver an Economic Bright Spot for BC

The transportation and logistics industry centred in Greater Vancouver comprises a big part the region’s economic and employment base and also makes significant contributions to the larger BC economy. So it is encouraging to learn that business has been rebounding at Port Metro Vancouver – the most important piece of the Greater Vancouver Gateway cluster.

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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. 

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The Underground Economy

“Underground” economic activity takes different forms and includes the production/provision of both legal and illegal goods and services. The underground economy (UE) is a concern for governments because it reduces the tax base and can weaken regulatory regimes intended to protect consumers, workers and the environment.

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Finlayson: Exportable services an important source of job growth for BC
(Troy Media)

More than three-quarters of all employed people in British Columbia are engaged in producing “services” rather than “goods.” Services span a wide array of industry sectors, everything from retail and wholesale trade to professional services (engineering, law, accounting, architecture, etc.), scientific and technical services, transportation, financial services, accommodation and food services as well as services that are mainly delivered and/or largely funded by governments (public administration, education, and health and social services). Many of these service industries loom large in the labour market. Retail and wholesale trade, for example, together employ 350,000 British Columbians, another 200,000 or so toil in the broadly-defined education sector, 150,000 work in financial services, and 275,000 earn their livelihood by providing health-related services.

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Finlayson & Syer: Building on Success: Assessment of First Nations – Industry Relations in BC (Vancouver Sun)

Increasingly over the past decade industry and First Nations in B.C. have engaged with each other with an overarching objective in mind - to advance resource development by ensuring better outcomes for all parties from economic, environmental and social perspectives. The business case for this kind of industry-First Nations engagement is clear: First Nations have rights and title interests (to a degree unknown) that have to be addressed in order to pursue new development. And while governments (federal, provincial and aboriginal) have crucial responsibilities in the process of reconciliation and in creating certainty for all parties, businesses also have a critical role to play as partners that can provide some of the vital ingredients – investment, expertise and jobs.

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The State of Industry-First Nations Relations in BC – Part I

Over the past thirty years, and accelerating over the last decade or so, industry in British Columbia has increasingly engaged directly with First Nations to build the conditions for investment certainty in resource project development. The business case for doing so is clear – Section 35 aboriginal rights and title have proven challenging to define, and the Crown, for a variety of reasons, has been unable to comprehensively meet all of its consultation and accommodation obligations to First Nations. Nor should government necessarily have to shoulder all of the work related to post-colonial economic engagement with First Nations.

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Review finds higher pay levels and outsized wage increases in BC's municipal sector

Concerned about rising taxes at the local level?  Employee compensation in your municipality is probably a factor. 

A couple of years ago the Business Council published a report documenting steady and significant increases in local government operating costs in Metro Vancouver’s 20-odd municipalities.  Although the picture varied across communities in the region, collectively municipal expenditures in Metro Vancouver soared by 80% over a ten year period.  Ongoing inflation and population growth mean that municipalities must spend more to meet the service requirements of local residents and businesses.  But we found that even after adjusting for population and inflation, municipal operating costs in the Metro Vancouver area jumped by 32% between 2000 and 2010.  This is three times higher than the comparable rate of growth in provincial government operating expenditures over the same period -- despite the fact that the province pays the lion’s share of costs for health care and education.

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D'Avignon op-ed: Economic reconciliation with First Nations looks promising (Vancouver Sun)

British Columbia is a diverse and relatively wealthy province. This diversity comes in many forms, including environmental, economic and cultural. Reconciling and harnessing this diversity is what has enabled B.C. to build and sustain a high standard of living and of livability.

However, we are still performing below our collective potential in significant ways.

Within this broad canvas, the province has only recently begun a new relationship between government, First Nations and industry. This relationship has its legal foundations in constitutionally protected aboriginal rights and title and, more directly, in a new era of economic partnerships that both governments and industry have entered into with many of B.C.’s First Nations.

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Finlayson: The growing role of women in the workforce (Troy Media)

The growing role of women in the workforce arguably qualifies as the most consequential socio-economic development of the past fifty years. As more women have entered the formal labour market, the productive capacity of our economy has been augmented. Indeed, increased “labour input” – more people working – has been the principal factor pushing up gross domestic product (GDP) and household incomes in Canada. And women account for a large majority of this increase in “labour input.” A study done last year by the economics team at RBC estimated that the rise in female labour force participation since the early 1980s has boosted Canada’s GDP by more than $130 billion.

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Healthy Gains in Retail Spending in BC

After a number of years of sluggish growth, retail sales in BC have made some impressive gains recently. A year ago, retail spending in the province was basically flat. In the second half of 2013 and through the first quarter of this year the retail environment improved, with annual growth in retail sales advancing to around 4%. Over the past three months, spending has accelerated again, climbing to a 7% annualized growth rate.

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