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.
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.
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.
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.
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.
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.
Finlayson: Exportable services an important source of job growth for BC
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.
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.
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.
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.
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.
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.
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.
Stock Markets at Record Levels, Improving GDP and Low Inflation…
How long will it last?
We head into the Labour Day weekend after digesting a recent barrage of mostly positive economic data for the second quarter of 2014 in North America. In the United States, after a tough first quarter, the economy posted an impressive performance in Q2 with 4.2% (annualized) real GDP growth, along with low inflation and solid metrics across several other key indicators. This pickup in GDP growth corresponds with accelerating job creation and modest income gains for American households.
Mixed BC Inflation Readings Signal Stable Overall Picture
BC has recently seen some volatility in the monthly inflation numbers. The July all-items Consumer Price Index (CPI) was up 1.4% from one year ago, which was well below the 1.9% year-over-year increase recorded in June. So far in 2014 inflation has been trending higher after a period of very little change over the second half of 2013.
Reducing Greenhouse Gas Emissions - The Costs Vary By Industry
Policy-makers in a growing number of jurisdictions are committed to taking steps to reverse – or at least slow the growth of – greenhouse gas (GHG) emissions that are believed to contribute to global warming.
Job Market Improving…But Employment Growth in BC Remains Soft
July’s revised labour force report from Statistics Canada shows that employment growth remains sub-par in the province. The total number of people working did not change in July. But this sideways result follows an increase of 6,700 jobs the previous month. The past two months have seen a decent gain in the aggregate number of people working in the province and extends the modest positive trend that has been in place for seven or eight months.
Finlayson: Vancouver’s Incomes are Low, But Costs are High (Vancouver Sun)
Spending time in the downtown Vancouver business district or in the tonier residential neighbourhoods scattered across the lower mainland can easily foster a misleading impression of the financial health of the households that comprise the region. That point was hammered home for me recently after reviewing the latest Statistics Canada data on incomes.
BC’s Tourism Industry: Positioned for Growth
In BC, tourism supports and sustains jobs in every region and serves as the economic backbone of many smaller communities. Compared to other provinces, the tourism industry is proportionally larger in BC, a reflection of the province’s natural beauty and the diversity of both winter and summer activities offered here. Greater Vancouver’s international status as a desirable travel destination contributes to the prominence of the broader BC tourism sector.
Debate Over the Minimum Wage Heats Up
Proposals to increase the minimum wage have been gathering speed on both sides of the Canada-U.S. border. In January, President Obama called on Congress to lift the federal minimum wage from $7.25 to $10.10 an hour, an idea quickly rejected by Republican Party leaders. But America’s national government doesn’t hold a monopoly on labour standards in that country; state and local governments also play a role. Since 2011, more than a dozen U.S. states and several cities have increased the minimum wages in their jurisdictions. Earlier this year, Seattle adopted a $15.00 an hour minimum wage, the highest among all big American cities.
Finlayson: US may be poised for economic housing boost (Troy Media)
Is it possible that America’s economy might surprise us with a sustained growth surge? The question came to mind as I recently slogged through a series of blog entries and reports on the web site of the Harvard Joint Center for Housing Studies. The Center’s researchers keep close tabs on U.S. housing markets and have a particular interest in the factors believed to influence the demand for housing.
Waiting for Better Days
Some of the optimism about the global economy evident in early 2014 has diminished in recent months, causing forecasters (including the Business Council) to revise down their growth projections. The change is not dramatic, but the tone has shifted in a more cautious direction.