However, says BCBC, the government’s ambitious capital plan comes with the risk that high levels of non-residential construction activity will strain the capacity of the B.C. construction sector and lead to escalating costs.
“We encourage the government to carefully manage the timing and sequencing of its capital plan to reduce this risk,” said BCBC in its analysis of the Budget.
Said Ken Peacock, BCBC chief economist and vice president, “Capital spending is up by about $3 billion compared to what it was three or four years ago. That’s something we’ve been pushing for years with both the Liberal and NDP governments.”
Peacock says B.C. needs more capital spending for such infrastructure as roads, bridges, hospitals, schools and communications.
“Interest rates are low and the government’s debt load has been low, so there’s been room for more capital spending,” he said.