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.
Resource Industries Drive Investment Spending Higher in BC
The release of Statistics Canada’s annual Public and Private Investment survey provides information on recent business capital spending and affords a useful glimpse into where and how much BC businesses are planning to invest in the coming year. The latest survey predicts a healthy increase in capital spending in 2012, and confirms that business investment will be a significant economic driver in the province. It also underscores the important role that resource industries and related infrastructure development are playing in the growth of BC’s economy.
2012 BC Budget: Fiscal Caution Amid Economic Turbulence
Against an unsettled external economic backdrop, this week’s provincial budget saw Finance Minister Kevin Falcon reaffirm the government’s commitment to balance the operating budget by fiscal 2013-2014. Meeting this objective – which is mandated by current law – will require downshifting spending growth to about half the pace set during the years preceding the 2008-09 recession. While it featured a few new measures, the dominant theme of Budget 2012 is spending discipline while seeking to maintain core government services. To help address funding pressures across the provincial public sector, resources continue to be reallocated to higher priority areas such as health and education, and efforts to find efficiencies within existing budgets are accelerated.
Slow But Gradually Improving Growth In Store For BC
BC Economic Review and Outlook Feb 2012
BC’s economic growth in 2011 was modest and uneven. The first half of the year was particularly weak, as global equity markets underwent a steep sell-off, the American economy stumbled, the earthquake and tsunami sent Japan into a temporary recession, and financial stresses in the Eurozone escalated. Towards the end of the year, economic conditions in the US improved and, judging by job growth and a handful of other indicators, BC’s economy also appeared to pick up. This helped the province’s real gross domestic product (GDP) to expand by an estimated 2.0% in 2011. BC’s performance was reasonable compared to many other advanced economies, and was in the middle of the provincial growth rankings within Canada.
How Big (and What Is) the 'Green Economy'?
The Challenge of Counting 'Green Jobs' in BC
Environment and Energy Bulletin v4 n1
“Having announced the imminent arrival of the green economy, we’re scrambling to define exactly what that means…”
The above quote neatly sums up the current conundrum about what many people now refer to as the “green” or “clean” economy: although the idea is much celebrated, it is hard to pin down in a satisfactory way. Politicians, media commentators, and non-governmental organizations routinely laud the potential to create thousands of new “green jobs.” Shortly after taking office, US President Barak Obama proclaimed, “As we recover from this recession, the transition to clean energy has the potential to grow our economy and create millions of jobs - but only if we accelerate that transition.” Closer to home, former Premier Gordon Campbell championed the idea of BC as a North American leader in developing and selling clean (carbon-free) energy. British Columbia’s pioneering economy-wide carbon tax, the first of its kind in North America, was linked to an expectation of robust growth in “green” industries and related gains in employment. At the municipal level, political leaders in the City of Vancouver are convinced that the green sector is destined to drive the region’s economy and foster the development of tens of thousands of new, high-paying jobs.
A Snapshot of Incomes in British Columbia
Policy Perspectives v18 n5
While economists often seem preoccupied with somewhat abstract indicators like gross domestic product, productivity and current account balances, arguably the economic variable of most interest to people is income. As defined by Statistics Canada (and similar agencies in other countries), income has two key components: 1) the “market incomes” received by individuals and households from employment, savings, investments, occupational pensions, rents, and entrepreneurial activity; and 2) “government transfers” such as social assistance, pensions, unemployment insurance, and the GST tax credit, which are remitted directly to households by the state.
2011-2012 Holiday Business Hours Survey
The Business Council of British Columbia conducts an annual survey to deterine when members will be open during the holiday season. Thank you to all that participated in the survey.
Submission: Select Standing Committee on Finance and Government Services
The Business Council of British Columbia submits preliminary advice on the 2012 provincial budget to the legislature's Select Standing Committee on Finance and Government Services.
Small Decline in the BC Economic Index in Q3
BC Economic Index v10 n3
In the third quarter of 2011 the BC Economic Index registered a slight 0.1% contraction. Adding to the weak reading, the result from the second quarter was revised down from a respectable 0.8% increase to a more modest 0.5% advance. As an indicator of current economic conditions, the downward revision coupled with the small contraction in Q3 indicates that the provincial economy essentially stalled over the past few months.
British Columbia in the Asian Century
Policy Perspectives v18 n4
It is no longer a question of if but rather a matter of when. Almost a decade ago – back in 2003, to be precise – the global economics group at Goldman Sachs drew attention to the rise of Asia and sent minor shockwaves through the US establishment with its proclamation that China would overtake America to become the world’s biggest national economy in 2041. At the time this was viewed as a credible projection, but the fact that the eclipse date was nearly forty years away meant it was still fairly abstract and was enveloped with the uncertainty that invariably attends multi‐decade forecasts. Sustained double-digit growth in China prompted Goldman Sachs to revise its projection for the crossover date to 2027 a few years later. And now, following the Great Recession and what is expected to be a subdued economic expansion for the United States, 2019 is the most widely cited year for China to surpass America in overall economic size.
Asian century: How BC can profit
By Jock Finlayson, Executive Vice President and Chief Policy Officer, Business Council of British Columbia
How long before a surging China eclipses a slumping United States as the largest national economy? The question is timely as the world continues to recover from the 2008-09 financial crisis and economic downturn.
Another Quarter of Modest Growth For BC
BC Economic Index v10 n2
In the second quarter of 2011 the BC Economic Index posted a 0.8% quarterly increase. As an indicator of current economic conditions, this reading suggests the provincial economy is growing at a modest pace following similar performances in both the first quarter and the fourth quarter of 2010. Given the economic recovery is just two years old, this rate of expansion is not particularly strong. But against the backdrop of rising global uncertainty and ongoing malaise in the US, another interpretation is that BC’s economy is holding up relatively well.
The Natural Gas Story
Environment and Energy Bulletin v3 n2
Both globally and in North America, natural gas is poised to play a bigger role in meeting the energy needs of consumers, businesses and communities. Recent discoveries of large unconventional (shale) gas deposits in the United States, Canada and parts of Europe have heightened awareness that natural gas is an abundant, widely distributed and cost-effective energy source. Many analysts also see natural gas as a “foundation” fuel that can help to pave the way to a lower-carbon energy future. And with a number of countries – Japan, Germany, etc. – now looking at reducing their reliance on nuclear power, the global appetite for natural gas seems poised to increase markedly in the coming years.
Transportation Infrastructure for a Globally Conneted BC Economy
Policy Perspectives v18 n2
Infrastructure is the sometimes invisible and seldom discussed backbone of a modern economy. A region’s infrastructure affects the quality of life enjoyed by citizens, the competitive position of businesses, and the potential for long-term gains in productivity and incomes. As a small economy, BC depends heavily on trade with other countries and provinces to generate income, employment and tax revenues. Both the profit margins on exports and the costs of imported goods are linked to the efficiency of the freight transportation system. As a gateway to the Asia Pacific, BC’s transportation sector is more than a facilitator of trade. In connecting Asian countries with other North American jurisdictions, the industry generates its own export earnings, apart from the enabling economic activity more broadly. Transportation as an industry looms larger in BC than in other provinces.
Moderate Expansion Continues in 2011
BC Economic Index v10 n1
The BC Economic Index posted a 0.6% quarterly increase in the first quarter of the year, essentially matching the Q4 2010 rise. The good news is that consecutive quarterly gains in the Index of this magnitude indicate the economy is on a solid footing. But a cautionary note is that growth remains on the soft side considering the depth of the 2008/09 recession. With growth having slowed quite sharply from the early stages of the recovery, BC’s unemployment rate remains in excess of 8%. For it to move lower will require more job creation which ultimately depends on a return to more robust economic conditions.
A New World Order Takes Shape
Policy Perspectives v18 n1
How long before a surging China eclipses a struggling United States as the largest national economy? The question takes on new significance as the world continues to recover from the 2008-09 financial crisis and economic downturn.
Lessons Learned from the Prosperity Mine Decision:
Enhancing Project Certainty Through a Social Licence Strategy
Environment and Energy Bulletin v3 n1
Since the Federal Cabinet’s decision in November, 2010 to prohibit the proposed Prosperity Mine project from proceeding, questions have arisen about how this outcome came to pass, especially in circumstances where the project was previously approved through the British Columbia environmental assessment process and received strong words of support from the BC Government. One only has to consider the voluminous media coverage of this dilemma to understand the answer and to gain an appreciation of what now appears to be the most critical ingredient for success in any major resource project proposal. The critical ingredient? - “social licence” to develop and operate the project.
BC's 2009 Recession Crimps an Otherwise Strong Growth Performance in 2000s
The recently released Provincial Economic Accounts provide an opportunity to look back at BC’s economic performance. While preliminary data had already shown the province’s economy experiencing a sizable contraction in 2009, the more complete data allows for a more comprehensive review of economic well-being, export performance and other comparative metrics. The 2009 data also brings the decade to a close, affording a longer term assessment of BC’s economic performance for the entire decade.
Small Business Growth
The role of small businesses necessarily features prominently in any discussion of the structure and performance of British Columbia’s economy. It is no exaggeration to say that an orientation toward small businesses is one of the defining characteristics of the province’s economy.
The Harmonized Sales Tax -- Through an Economic Prism
This issue of Policy Perspectives is guest authored by Jon Kesselman of Simon Fraser University. Recognized as one of Canada's leading public finance and tax policy experts, Dr. Kesselman outlines the economic benefits of the Harmonized Sales Tax which the BC government plans to introduce later this year. The Business Council is grateful to Dr. Kesselman for contributing this timely article.
Outlook 2020: Shaping BC's Economic Future
Authored by Jock Finlayson, and Ken Peacock, Business Council of British Columbia