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.
Finlayson& Peacock Op-Ed: 15% property transfer tax should not apply to non-Canadians who move to Metro Vancouver for bona fide employment reasons (Business in Vancouver)
The way the government designed its property transfer tax scheme means that it will impose a stiff financial penalty on foreigners who locate here to take jobs.
The Lower Mainland’s frothy housing market continues to attract a great deal of media and political attention. In late July, the B.C. government responded to mounting public anxiety over soaring housing prices by instituting a 15% property transfer tax (PTT) on “foreign” purchases of residential real estate in Metro Vancouver. This measure predictably has raised the ire of the real estate industry, in part because it has captured, unfairly in our view, many in-process transactions that pre-date the effective date of the tax.
It is unclear whether the higher PTT will dampen housing demand. Initial evidence does point to some slowdown in the pace of real estate activity. The fact that foreigners have been responsible for at least 10% of all residential property purchases in the Vancouver region suggests that the new tax should have some effect.
Some Musings on the Metro Vancouver Real Estate Market
How do people in the lower mainland manage amid sky-high housing prices?
Finlayson: Two reasons why average families in Vancouver can't afford housing (Troy Media)
Recent months have seen a politically charged debate over the causes and consequences of sky-high housing prices in Metro Vancouver. The pace of price increases has been unprecedented, particularly for detached homes, which in some parts of the region have more than doubled in value in five years.
No Surprise: The Residential Real Estate Complex a Big Economic Engine in BC
Real estate sales have been running at record levels across the lower mainland, and home prices are surging. In response to elevated demand, new home construction has jumped to its highest level since the early 1990s. Renovation spending has also been strong. Casual observation and “water cooler chatter” speak to widespread media and public interest in real estate generally -- and housing prices in particular. In this setting, it will not come as a surprise that the data tracking economic output by sector confirms that real estate-related activity has become a critical factor underpinning economic growth in the province.
BC's Economy Remains on Solid Growth Path Despite Muted Global Backdrop
Against the backdrop of a subdued global economy, British Columbia looks poised for healthy growth over 2016-17, continuing the pattern of last year. While parts of our economy will be held back by depressed prices for some key commodities, exports of non-resource goods together with many services – including tourism – are enjoying a lift from the low Canadian dollar. The province’s housing market also remains buoyant, supported by rock-bottom interest rates, better job growth and steady inflows of immigrants and foreign money.
Finlayson & Peacock Op-Ed: Business input vital to immigration system’s economic success (Business in Vancouver)
There are currently 4.7 million people living in B.C. Over the past 20 years, our population has risen by 908,000. Back in 1995, the population was growing at an annual rate of 2.8%, based on strong net interprovincial migration, international migration, and a relatively high rate of natural increase (births minus deaths). Now, the population is increasing by 1% annually, which is higher than the Canadian average but slower than in decades past.
In the next 20 years, our population is projected to expand by 1.14 million. Natural population growth dwindles after 2015 and approaches zero by 2030. At that point, B.C.’s population will be rising solely due to net in-migration from other provinces and countries. Of the two sources of in-migrants, international immigration will have a bigger role in determining B.C.’s demographic and economic future. Thus, it is more important than ever that immigration policy is aligned with our economic needs. Unfortunately, based on some initial actions by the Justin Trudeau government, it appears that economic considerations will carry less weight in immigration decisions.
Finlayson Op-Ed: Green energy future a long way off (Troy Media and The Province)
Some Canadian environmental groups claim the world is in the midst of a dramatic move toward carbon-free forms of energy. The implication is that Canada – one of the world’s largest producers of oil and natural gas – should quickly abandon the fossil fuel economy and quickly embrace renewable energy as the only pathway to a prosperous future.
Important shifts in energy production and consumption patterns are undoubtedly underway. However, the timing of any overall global energy revolution is likely to be considerably slower than many believe. Rising global energy demand, and the tens of trillions of dollars of embedded capital that underpin current energy production and consumption systems, are among the factors that stand in the way of rapid change.
Commissioned Paper: Fiscal Options for Building a Prosperous British Columbia - By Kevin Milligan
BCBC commissioned an independent review of the efficiency, effectiveness and fairness of British Columbia’s current tax system, and potential policy approaches to modernize the system in the context of today's economic realities. The Milligan paper notes that BC faces two key fiscal challenges: generating the government revenues needed to fund public programs and services going forward, and ensuring a healthy level of investment and business growth to sustain a strong economy.
Off to Work: Improving the School-to-Work Transition for Recent University Graduates
Human capital is maximized when a worker’s qualifications and skills match those required by their job. Delayed PSE school-to-work transitions may help to explain Canada’s lacklustre productivity growth.
Immigration and Economic Growth
The influx of new immigrants (+86,216) was the primary driver of population growth in the first quarter of 2016. Syrian refugees comprised a large proportion of the incoming immigrant flow. Notably, Canada has never before admitted as many immigrants within a single quarter.
D'Avignon Op-Ed: Trade deals, infrastructure, national climate framework key for B.C. business (The Hill Times)
Today, some 40 business, First Nations, and community leaders from British Columbia are in Ottawa. Here’s how we can work together with the federal government.
D'Avignon Op-Ed: LNG deals good for jobs, economy, climate (The Vancouver Sun)
Recent news that two agreements have been reached for the production and sale of made-in-British Columbia Liquefied Natural Gas (LNG) adds to the momentum of positive job and economic growth in the province. These export agreements also underscore the role that B.C. and our locally-based companies are playing in providing cleaner burning fuels to growing markets abroad as jurisdictions in Asia and elsewhere transition over time to lower-carbon energy sources.
British Columbia is home to some of the largest and most productive natural gas fields in the world. Since the late 1980s, we have benefited enormously from this resource in terms of jobs, investment and government revenue. For example, when natural gas prices were high in 2005-06, the provincial government collected enough gas royalties to fund the entire post-secondary education system.
The Importance of Raising Narwhals
Canada’s lacklustre ability to produce high-growth firms is concerning. This should be a foremost concern for policymakers, especially in light of recent gains in access to capital.
British Columbia Needs Effective Intellectual Property Frameworks to Promote Collaborative Research and Commercialization
This issue of Policy Perspectives provides an overview of results from a recent Mitacs research project examining what attracts (and deters) foreign direct investment in R&D to Canada, with a specific focus on Canada’s outdated intellectual policy regime.
RELEASE: BCBC supports NEB decision which provides pipeline safety, supports the BC and Canadian Economies
Thorough process provides next step in achieving needed market access
The Business Council welcomes the decision of the National Energy Board (NEB) today approving, with conditions, the Trans Mountain pipeline project.
“The approval of this project, after a long and thorough independent process – and despite opposition from some in and outside the province – is a positive development. The NEB carefully reviewed the technical, environmental and social evidence and concluded that the project is safe and provides important benefits for BC and Canada,” said Greg D’Avignon President and CEO of the Business Council of BC. “The Trans Mountain pipeline expansion is of vital importance to the Canadian energy sector – our country’s number one export industry. It is also important for BC, which depends on Alberta for transportation fuels and benefits from Kinder Morgan’s operations in this province through tax contributions, jobs and spin-off business for small and large companies.”
Millennial Musings: A Policy Response to an Aging Population
While increased life expectancy is a positive development, it inevitably translates into additional strain on health and social service budgets. As the number of retirees increase, there will be fewer working-age taxpayers to provide the government revenues needed to pay for services. On top of this, a shrinking natural birthrate is also contributing to a more slowly-growing labour force.
BC Tops the Provinces in Economic Growth in 2015
Bolstered by the lower dollar, inward migration, and a hot housing market, BC’s economy grew by a solid 3.0% (after adjusting for inflation) in 2015. This was the strongest expansion since 2006, although just slightly above 2014’s healthy 2.9% gain.
Finlayson Op-Ed: B.C. needs to step up its game on innovation (Vancouver Sun & Troy Media)
The economic and business environment in which British Columbia operates is shifting. A number of trends are transforming the global economy in ways that can either help or hinder the quest for prosperity by countries and sub-national regions. The principal forces identified by the McKinsey Global Institute are: i) urbanization, particularly the rapid growth of cities in emerging markets; ii) accelerating technological change and the rise of the digital economy; iii) population aging and slower labour force growth; and iv) the onward march of globalization, via expanding cross-border flows of goods, services, finance, people and data – a trend that is heightening competition among jurisdictions for capital, talent and high-value business activity.
Investment Survey Signals Continued Weakness in Capital Spending
Statistics Canada’s just released capital expenditure survey confirms that the negative fall-out from sluggish energy and materials markets continues to take a toll on business investment across the country.
BC's Fastest Growing Industries Come from a Diverse Mix of Sectors
Amid the steep downturn in global commodity markets, the BC economy has held up surprisingly well. Two decades ago, a comparable world-wide mining/energy downturn would have meant malaise for the provincial economy. But what we see now, notwithstanding some regional challenges, is an economy that is on a solid growth footing.