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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.

 

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.

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A Brief Look at the Environmental Goods and Services Sector in British Columbia

There are substantial challenges with establishing a coherent measure of the environmental goods and services (EGS) sector, not only in terms of definitions but also as a proportion of Gross Domestic Product, trade and employment in British Columbia.

For the most part there has always been an EGS sector. Its contribution to the economic activity is already embedded within the system of national accounts (SNA) used by statistical agencies in Canada and other countries. Two examples are water and wastewater treatment, whose contribution to economic activity is already counted as part of utilities or infrastructure spending. Other examples include technologies designed to improve vehicle fuel efficiency or to reduce emissions from power generation; these are captured in the existing data on manufacturing and utilities production and spending. Activities such as consulting and engineering services and hazardous waste management are also included in the SNA.

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Rising Exports will Support Strong Economic Growth in BC

Exports are vital to sustaining and increasing BC’s standard of living because they allow us to pay for imports of goods and services not produced locally, they support hundreds of thousands of jobs, and they provide local firms with opportunities to grow and benefit from economies of scale. The discipline of having to compete in the international marketplace encourages firms to invest in productivity enhancing equipment and processes. In turn, this means that export-oriented industries tend to have above-average levels of productivity and therefore are able to pay above-average wages/benefits.

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Growth and Greater Diversity in BC's Export Base
A primer on BC exports

As a small, open economy British Columbia has always depended on and prospered from its international connections. These linkages have been steadily enhanced and supported by improved global transportation and communications; expanding cross-border flows of goods, services, capital and technology; expanding the growth of international travel; and rising numbers of international migrants.

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Canada’s Environment for Entrepreneurship Compares Favourably

Entrepreneurship is an important source of innovation, economic growth and job creation. As such, greater attention is being paid to the role of public policy in fostering entrepreneurial activity.  Governments and international organizations are working to better understand and measure the factors that influence and support entrepreneurial activity.  The Organization for Economic Coordination and Development (OECD), for example, has developed a framework – Indicators of Entrepreneurial Determinants – that outlines some of the different factors it has identified as influencing entrepreneurship.  The framework provides international benchmarks for factors linked to business entrepreneurship.  Recognizing the need to better understand and quantify entrepreneurship, Industry Canada has prepared a research series that applies the OECD framework to the Canadian context.  The first in the Industry Canada series examines how Canada performs on two of the OECD’s six categories: Regulatory Framework and Market Conditions. 

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Women in Small Sized Business in BC

Small businesses make up ~98% of businesses in Canada and provide more than 50% of the private sector payroll.  The figures are very similar for British Columbia. It is not a large leap to discover that small businesses support a significant number of jobs and contribute a great deal to our GDP – about 26% in the case of BC.  

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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.

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Small Jump in BC’s Minimum Wage Makes Sense

The province has decided to hike the statutory minimum wage to $10.45/hour, effective September 1, 2015. This amounts to an increase of 20 cents/hour from today’s level. Going forward, the government proposes to adjust the minimum wage based on inflation, as measured by changes in the all-items Consumer Price Index – an approach which the Business Council of BC has previously recommended. Assuming that inflation averages around 2% per annum, BC’s minimum wage can be expected to climb by a little over 20 cents per year. Within five years, the minimum wage would be roughly $12/hour.

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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.

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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.

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Forest Sector Remains a Vital Economic Engine for BC

British Columbia’s forest industry is an integral part of our economy and remains one of the most important economic engines for the province. It generates tens of thousands of jobs directly and supports many more jobs in other sectors that sell goods and services into the different elements of the forest products cluster.

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The Intersection of Environmental Policy and Economic Growth

The argument often goes: increased environmental regulation makes for a better society and facilitates economic growth. Some in the business community may disagree. To date there have been academic studies in support of both sides of the discussion but the answer has remained elusive. There is no doubt that much environmental regulation helps shape the conduct of individuals and firms by creating limits and articulating responsibility for actions and performance. But a proliferation of poorly designed and badly implemented regulations may have negative consequences for the economy, deterring investment and undercutting the competitive position of affected firms in trade-exposed industry sectors.

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BC Budget 2015: Few New Measures...But an Era of Surpluses Lies Ahead

The benefits of BC’s diverse and resilient economy were evident as Finance Minister Mike de Jong tabled a Budget on February 17 that calls for a modest surplus for 2015‐16, followed by slightly larger surpluses in the two subsequent years. This places BC in the position of being possibly the only province to balance its books in the coming year. Fiscal circumstances, however, remain tight, and the Budget featured few new spending or taxation initiatives. Spending increases that did make it into the Budget were concentrated in health care and to a lesser extent education, along with a few targeted measures aimed at lower income households. The government opted to advance capital spending over what it had planned last year, in line with the Business Council’s advice.

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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.  

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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.

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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.  

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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.

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An Update on Incomes

Statistics Canada recently published a fresh batch of data taken from the Canadian Income Survey. The picture that emerges is similar to what we have reported before. British Columbia remains a middling income performer within the national context.

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BC Poised for Decent Growth in A Turbulent World

The Business Council's first Economic Outlook and Review for 2015 projects a 2.6% increase in BC's real GDP and examines the impact on BC's economy of a number of factors including the global economic outlook, a rebounding US economy, declining oil prices and domestic factors such as housing starts and exports.

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Interest Rates in Canada - Lower for Longer

This week’s decision by the Bank of Canada to trim its overnight lending rate by 25 basis points (from 1% to 0.75%) caught the markets by surprise and also embarrassed the country’s economic forecasting community.

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