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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.

 

Recent international trade numbers suggest some improvement in Canada's limping economy

Statistics Canada’s just released snapshot of Canada’s trade performance in June offers a hint that the much anticipated upturn in non-energy exports may finally be materializing. 

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Finlayson & Peacock Report: BC holding its own in economic headwinds (Business in Vancouver)

Against the backdrop of a choppy and risk-prone global economy and slowing growth in Canada, B.C. is poised to be atop the provincial growth rankings this year.

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Finlayson Op-Ed: Adding up empty economic victories in a land of cheap money (Troy Media, Business in Vancouver, and Plant)

The Bank of Canada’s recent decision to trim its short-term policy interest rate by another 25 basis points – taking it to a near record low level of 0.5% – acknowledges that the energy-related downturn in capital spending and exports in Canada has been greater than it was expecting at the beginning of the year – and the pain is likely to persist.

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Solid Gains in Retail Spending Suggest British Columbians are Optimistic

Following an unusually weak period in 2013, retail spending in BC has steadily strengthened and is now growing at the strongest annual pace since the 2010 Olympics. The total value of retail sales surged in May by 8.3% over the same month of last year. What’s more, BC is now leading the country in the growth of retail sales at a time when activity has slowed markedly in some other provinces. In Alberta and Saskatchewan retail sales are now well below year-ago levels, even on a non-inflated adjusted basis. Canada-wide growth in retail sales is running around 2.5%. Sales in BC are growing at about three times the national pace. Ontario is quite closely aligned with BC as retailers there are seeing spending growth of about 5%.

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Business Alert: No Change in WorkSafeBC Average Premiums for 2016

WorkSafeBC recently announced that the average “base premium rate” in 2016 will be unchanged from 2015, continuing the pattern from last year. The average rate charged to employers is being set at $1.70 per $100 of assessed payroll, exactly the same as in 2015. 

This should come as welcome news for the employer community, particularly in light of a seeming onslaught of government-mandated and/or policy-driven cost increases in so many other areas (Medical Services Plan premiums, fuel taxes, electricity rates, water rental charges, environmental assessment fees, etc.).

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Finlayson Op-Ed: Planning Ahead for Ongoing Change? (PeopleTalk Magazine)

Most people are aware that the population in Canada and other western countries is aging, that longevity is increasing, and that the front-end of the large baby boom generation has started to retire.  Fertility rates have also fallen, which means the future supply of workers will be under additional downward pressure even as the ranks of seniors swell.  But how quickly will our population grow, and age, in the next 20 years? Will employers soon face a dramatic shortfall of working-age British Columbians?

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In the News This Week: Five Business and Economic Stories Affecting BC

Each week we recap five economic and business news stories impacting British Columbia's economy. This week we look at:

  • Bank of Canada's interest rate change,
  • The new Canada Energy Strategy,
  • BC confirms a surplus for 2014-2015,
  • The Iran Nuclear Agreement,
  • Canada's inflation numbers,

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BC Economic Review & Outlook - Mid-Year Report

Amid External Headwinds, BC's Economy Is Holding Up Well

Against the backdrop of a choppy and risk-prone global economy and decelerating growth here in Canada, British Columbia is holding its own. As a small trade-oriented jurisdiction, the province is certainly not impervious to the economic headwinds, whether they blow globally or from within Canada. Sluggish commodity prices and the oil-driven recession unfolding in Alberta and Newfoundland are affecting all regions of Canada and have prompted us to trim our growth BC outlook relative to expectations back in January. However, by Canadian standards British Columbia looks well-positioned for a decent economic performance over the next 18-24 months.

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Some Musings on the Bank of Canada’s Latest Rate Cut

What are we to make of the Bank of Canada’s decision this week to trim its benchmark policy interest rate by another 25 basis points, taking it to a near record low of 0.5%? 

For one thing, the Bank is acknowledging that the energy-related downturn in capital spending and exports in Canada has been more pronounced than it was expecting earlier in the year – and the pain is likely to persist for a while yet.   Canada’s economy, we are told, is facing “complex adjustments” that will unfold over the “next few years.”  At the heart of these “adjustments” is a less rosy future for both crude oil and many other commodity prices.  This is unwelcome news, as natural resource-based industries supply more than half of Canada’s exports and play a pivotal role in driving business investment in several regions of the country.  A world of lower prices for oil and other commodities is a world in which Canadians can look forward to smaller increases in real incomes than we enjoyed during the decade that began in 2003 – a decade that coincided with a broadly-based global commodity upcycle that is now a fading memory.    

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Jock Finlayson Presentation
Does Canada have an Economic and Environmental Carbon Bubble?
Presented to the Eco-Pragmatism Summit, Vancouver, June 15, 2015

On June 15, 2015, Jock Finlayson participated in a panel debate with Jeff Rubin focused on energy and the economy.  Jock's presentation included a review of the top global oil producers, Canada's place as an energy exporter and  global energy consumption trends. He also looks at energy transitions and some implications of lower fossil fuel prices.

 

 

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In the News This Week: Five Business and Economic Stories Affecting BC

BCBC recaps the weekly business and economic news stories relevant to British Columbia's economy.

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It’s Bigger Than You Think: Non-Resource Manufacturing in BC

In British Columbia the processing of resources is a highly visible part of the manufacturing sector, particularly the processing of logs harvested from the province’s forests. But non-resource manufacturing is also a significant part of the provincial economic landscape.

This issue of Policy Perspectives takes a closer look at non-resource manufacturing in British Columbia. The sector comprises a bigger piece of the industrial base than most people realize. Looking ahead, we see non-resource manufacturing as a promising source of economic and export gains for British Columbia.

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Finlayson Op-Ed: BC economy will soon hit $250 billion (Troy Media and Business in Vancouver)

A steadily expanding population and ongoing modest economic growth are combining to propel the value of both spending and production in British Columbia to ever higher levels. As a result, we are on the cusp of a significant milestone: by the end of this year or early in 2016, the value of all measured spending and production in B.C. will reach one-quarter of a trillion dollars ($250 billion).

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Lower Canadian Dollar Dampens Cross-Border Shopping

In early 2013 the Canadian dollar was trading approximately at parity with the American greenback.  Then the Loonie started a gradual descent to its recent level of 81 cents US.  A 20% depreciation of the Canadian dollar vis-à-vis the US currency has significantly changed the relative prices of traded goods and services.  Many exports from BC shipped into the US are suddenly more competitively priced. The opposite is true for imports coming into the province from the US. 

Cross-border shopping effectively amounts to individual consumers doing their own “importing.” With the devalued Canadian dollar adding an additional cost of 20% (and more after paying fees to convert currency), a large portion of the savings on items purchased stateside that existed when the Canadian dollar was at parity has now been eliminated. So the number of British Columbians venturing into the US, unsurprisingly, has diminished.

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A Milestone Looms: BC’s Economy Will Soon Hit $250 Billion

A steadily expanding population and ongoing modest economic growth are combining to propel the value of both spending and production in the province to ever higher levels. As a result, we are on the cusp of a significant milestone: by the end of this year or early in 2016, the value of all measured economic activity in British Columbia will reach one-quarter of a trillion dollars ($250 billion).

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D'Avignon Op-Ed: Great News for British Columbia

Remember June 11and 12, 2015. We will look back on this 24 hour period years from now as a point in which B.C. started to see a material change to its economy. Specifically, it was when some $44 billion worth of investment decisions were made in two separate projects that will strengthen B.C. as a significant player in two global sectors: energy and shipbuilding.

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Finlayson Op-Ed: Canada flirting with recession (Troy Media, Business in Vancouver)

The latest economic growth report from Statistics Canada casts a cloud over the country’s economic outlook for 2015.  Real gross domestic product (GDP) fell at a 0.6 per cent annualized rate in the first three months of the year, considerably worse than even forecasters of a pessimistic bent were expecting.  Digging into the details, it is clear that the slump in global oil prices is taking a measurable toll on Canada’s energy-centric economy. 

Non-residential investment plunged by 15 per cent in Q1, led by sharp cuts in capital-spending by the oil and gas industry.  In recent years, the energy sector has accounted for more than one-third of all non-residential investment, as well as for roughly one quarter of Canada’s merchandise exports.  So the epic downturn in oil and natural gas markets is dampening overall private sector capital outlays and weighing heavily on Canada’s export receipts.  

Harsh winter weather also played a role in the gloomy Q1 report -- consumer spending came in below consensus, as many Canadians apparently decided to stay indoors.

Economists define a “recession” as two consecutive quarters of declining real GDP.  We are half way there, and some recent economic data signal further softness into the second quarter. 

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BC Now a Growth Leader in Canada

According to recently released data from Statistics Canada, the BC economy grew by 2.6% in 2014.  Against the backdrop of sluggish commodity markets, sub-par global growth and ongoing turbulence in Europe and some emerging economies, this is very respectable showing.  In historical terms, it is just slightly ahead of the province’s 2.5% long-term average growth rate.  And measured against other provinces, our economic expansion was second among the ten provinces last year.  

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Presentation:
Jock Finlayson presentation to MacKay CEO Breakfast
Macroeconomic Musings in a Slow-Growth World

On May 27, 2015, BCBC Executive VP and Chief Policy Officer Jock Finlayson gave an economic update to a group of CEOs and Top Executives at a MacKay CEO Forums Breakfast Event.

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Could Canada Experience a “Technical” Recession in 2015?

Last week’s economic growth report from Statistics Canada casts a cloud over the country’s economic outlook for 2015. Real GDP fell by 0.6% (annualized) in the first quarter, considerably worse than even forecasters of a pessimistic bent were expecting.

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