Why B.C. needs to be pragmatic about resource development and the resulting opportunities

When investments are made, more opportunities are created for higher incomes and increased government revenue.

As we wait for the dust to settle on B.C.’s latest election, all three parties would do well to think deeply about the phrase coined by Bill Clinton’s adviser, James Carville, in the 1992 election: it’s the economy, stupid.

To modernize, substitute “affordability” for “economy,” and delete the word stupid. Although not perfectly interchangeable, economic and affordability concerns are closely related.

With inflation running hot, sticker shock at the grocery store is a common and relatable topic of conversation, as is the high cost of housing.

Reducing these costs has been the focus of conversations around affordability and something candidates heard a lot about as they were knocking on doors and talking to voters. Wallets are pinched and people are stressed as everything becomes more expensive.

But affordability isn’t just about costs, it’s also about income.

Rising costs are easier to handle when incomes rise enough to cover extra costs. So, what helps wages grow for households and revenues grow for governments? Companies investing in new equipment, technology, and projects in B.C. Yet, I strongly suspect that not many candidates were asked: How does your party plan to attract new investment to the province?

When companies spend money on new technology, workers become more productive. Earlier this year, Carolyn Rogers, deputy governor of the Bank of Canada, used the example of being equipped with a snowblower instead of a shovel to clear a driveway when she talked about the need to “break the glass” on Canada’s productivity emergency. Using a snowblower allows more driveways to be cleared, which in turn, allows for higher wages to be paid.

It’s a simple analogy but the same is true when companies invest in new technology for a sawmill in the East Kootenay or a greenhouse in Abbotsford.

When investments are made, more opportunities are created for higher incomes and increased government revenue. Take LNG Canada, for example — a facility in Kitimat that liquefies natural gas for export to Asia. It represents the largest private sector investment in Canadian history, creating tens of thousands of high-paying jobs, billions in government revenue, and benefit agreements and opportunities for the Haisla Nation.

British Columbians are fortunate to have many opportunities in our resource sector, with $80 billion to $100 billion worth of mining and natural gas projects that have the potential to lift household incomes and government revenues waiting for decisions to be made.

That sounds like good news, but it comes with a catch. As former Premier Glen Clark said at a conference earlier this year, “capital is a coward.” He meant that companies don’t want to invest where things are uncertain, or where they don’t feel welcome. This brings us back to the election, of which the results are still unclear.

It’s entirely possible that the Greens, having won two seats, will hold the balance of power. This will come with the responsibility of being pragmatic about opportunities to address affordability concerns, including supporting investment in the resource sectors, which provides some of the highest paid jobs in the province.

While the overall average compensation per job in B.C. is around $75,000, the forestry sector pays about $123,000, miners earn an average $146,000, and workers in oil and gas earn $209,000 in average. These jobs make both economic and environmental sense, as our modern resource sector uses some of the most advanced technologies in the world, ensuring high levels of environmental protection with low greenhouse gas intensity compared to the rest of the world.

A strong economy is the bedrock of a happy electorate. In politics, you take this for granted at your peril, as there is always another election on the horizon, and it might be sooner than you think.

Laura Jones is the president and CEO of the Business Council of British Columbia.

As published in the Vancouver Sun on October 25, 2024.