Trade, Productivity & Competitiveness
BC’s ability to adapt to a rapidly changing world economy will depend on how well we can find new ways of doing business, adopt new ideas and practices, and connect with new trading partners. The Council encourages public policies that support research and innovation, business practices that increase productivity, connections that open new trading opportunities, and processes to commercialize BC’s best research.
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.
Digital Infrastructure will continue to transform the Way People Work and Interact
The internet and wireless communication networks have become an essential part of society’s infrastructure in the 21st century. It has altered the way people work and interact and the way businesses operate and serve customers. And the transformation has been very rapid considering that in less than two decades the commercial internet has become fundamental to business operations. Already about 2.5 billion people are connected to the internet, a third of the world’s population; projections point to 4 billion users by 2020, equal to more than half of the global population
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Productivity and Wages
An important long-term challenge facing British Columbia is to improve upon the province’s rather lackluster productivity record. In recent years, BC has trailed the national benchmark on overall business sector productivity by around 10%. In 2012, BC ranked sixth in the country in business sector productivity. Moreover, the province has had very limited success in boosting economy-wide productivity since the 1980s.
On the Size Rankings of National Economies – and Where Canada Stands
The World Bank has just released updated estimates of the size of all national economies for which reliable data could be collected. A much remarked finding of the Bank’s new report is that based on one set of projections, China will soon overtake the United States as the world’s biggest economy.
The shifting meaning of 'market access'
Canada is an open and trade dependent nation – a significant portion of our jobs, wealth and government revenue derives from trade and other forms of commerce with markets around the world. In the simplest sense, market access in this context means the ability to have Canadian goods and services ‘freely’ enter foreign markets – and to ensure we have cost-effective access to imports from elsewhere. By any measure, market access is therefore essential for our economic well-being.
Finlayson: Rebound in global trade augurs well for B.C.'s economy (Troy Media)
Economic growth has been tepid in B.C. in the past two years, with inflation-adjusted gross domestic product (GDP) eking out an average annual gain of barely 1.5 per cent. But the picture should brighten over 2014-15, as consumer spending strengthens, some momentum returns to the job market, and the province’s export shipments continue to expand.
The latter factor – stronger export growth – will be particularly important in creating a more positive economic environment. According to the latest forecast from the World Trade Organization (WTO), the volume of global trade is on track to increase by 4.7 per cent this year, followed by a 5.3 per cent jump in 2015. This represents a significant turnaround from the sluggish 2.2 per cent annual pace recorded during 2012-13. It’s also good news for the thousands of B.C. companies involved in selling various goods and services to foreign customers.
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 or at least 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.
Business Growth, Job Creation and Innovation
Canada ranks as one of the best places in the world to start a new business, according to an annual survey done by the World Bank. But the country does less well when it comes to encouraging enterprises to grow – and in fostering private sector innovation.
Canada-South Korea Free Trade Agreement (CSKFTA) is Good News for BC
The conclusion of the protracted negotiations to establish a free trade agreement with South Korea is a positive step for British Columbia. South Korea is the fourth largest destination for BC’s merchandise exports (after the US, China and Japan), so improved access to its market will be helpful for a number of the province’s export industries. The agreement also lays the foundation for an expansion of services trade, business travel, and investment between the two countries.
D'Avignon: British Columbians support resource exports (Vancouver Sun)
British Columbians, as well as potential investors, are too frequently confronted by headlines declaring B.C., and Metro Vancouver more specifically, are paralyzed by conflict over natural resource exports with supposedly profound opposition to development among a majority of citizens.
Is this really the case?