B.C. Business Matters:
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.
A Possible Strategy to Improve Post-Secondary Education and Training
The transition from school to work often poses significant challenges both for young people and the employers who hire them. Over time, the economy is generating fewer jobs and career options for young adults who lack any education or credentials beyond a high school diploma. For their part, many university and college graduates are finding the job market tough sledding, and a large proportion of graduates leave school with no clear idea as to what jobs or careers are available. Policy-makers and business leaders are voicing concerns over a perceived labour market mis-match between the supply of and the demand for skills. To the extent that such a mis-match exists and is sizable, it represents a loss of economic opportunity and implies that Canada is failing to fully mobilize its human resource potential.
A Post-Secondary Education Remains the Key Pathway to Higher Incomes
A recent analysis from the Organization for Economic Cooperation and Development (OECD) sheds useful light on the relationship between “tertiary” educational qualifications and employment opportunities and incomes.
Canada’s Environment for Entrepreneurship Compares Favourably
Entrepreneurship is an important source of innovation, economic growth and job creation. As such, greater attention is being paid to the role of public policy in fostering entrepreneurial activity. Governments and international organizations are working to better understand and measure the factors that influence and support entrepreneurial activity. The Organization for Economic Coordination and Development (OECD), for example, has developed a framework – Indicators of Entrepreneurial Determinants – that outlines some of the different factors it has identified as influencing entrepreneurship. The framework provides international benchmarks for factors linked to business entrepreneurship. Recognizing the need to better understand and quantify entrepreneurship, Industry Canada has prepared a research series that applies the OECD framework to the Canadian context. The first in the Industry Canada series examines how Canada performs on two of the OECD’s six categories: Regulatory Framework and Market Conditions.
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.
Small Jump in BC’s Minimum Wage Makes Sense
The province has decided to hike the statutory minimum wage to $10.45/hour, effective September 1, 2015. This amounts to an increase of 20 cents/hour from today’s level. Going forward, the government proposes to adjust the minimum wage based on inflation, as measured by changes in the all-items Consumer Price Index – an approach which the Business Council of BC has previously recommended. Assuming that inflation averages around 2% per annum, BC’s minimum wage can be expected to climb by a little over 20 cents per year. Within five years, the minimum wage would be roughly $12/hour.
The Intersection of Environmental Policy and Economic Growth
The argument often goes: increased environmental regulation makes for a better society and facilitates economic growth. Some in the business community may disagree. To date there have been academic studies in support of both sides of the discussion but the answer has remained elusive. There is no doubt that much environmental regulation helps shape the conduct of individuals and firms by creating limits and articulating responsibility for actions and performance. But a proliferation of poorly designed and badly implemented regulations may have negative consequences for the economy, deterring investment and undercutting the competitive position of affected firms in trade-exposed industry sectors.
An Update on Incomes
Statistics Canada recently published a fresh batch of data taken from the Canadian Income Survey. The picture that emerges is similar to what we have reported before. British Columbia remains a middling income performer within the national context.
Interest Rates in Canada - Lower for Longer
This week’s decision by the Bank of Canada to trim its overnight lending rate by 25 basis points (from 1% to 0.75%) caught the markets by surprise and also embarrassed the country’s economic forecasting community.
Plunging Oil Price Good for the BC Economy in 2015…
The rapid and steep decline in world oil prices has prompted a fair amount of commentary on the accompanying economic impacts. For Canada, much of the analysis points to modestly negative economic implications, stemming from reduced business investment, lower corporate revenues, a decline in the value of exports, and diminished job creation in the oil patch. Lower oil prices also translate into a decline in revenues flowing to the federal government and to provinces like Alberta and Newfoundland.
Charting BC’s Economic Prospects in 2015: Ten Developments to Watch
The Business Council outlines the top ten developments that will affect British Columbia's economy in 2015.
Income Inequality: Canada and the U.S. Marching to Different Drummers
Canada has long been known as a country that promotes the values of equity and fairness within our society. That helps to explain why the issue of economic inequality resonates with the media and among many of our political leaders. With a federal election expected sometime in 2015, inequality is sure to get more attention in the months ahead.
The Link Between Post-Secondary Education and Employment Earnings
Does post-secondary education make a difference? It most definitely does.
A Note on Infrastructure Investment and Government Debt
The Business Council recently published a white paper on infrastructure policy and financing in British Columbia. One of the points made in the paper is that investing in certain categories of infrastructure assets – particularly transportation, communications and energy infrastructure -- can help to strengthen the foundations for prosperity by boosting productivity, expanding the economy’s ‘supply side’ capacity, and improving the competitive position of local industries engaged in global commerce.
The global and Canadian gender gap, 2014
The global and local conversation about the economic potential of women and the foregone opportunity from not yet achieving full gender equality is heating up again. The last really big and prolonged discussion happened in the late 1970s, the heyday of feminist activism.
A tale of 2 countries – Canada and US (reversal of) fortunes in the post financial crisis period
For the majority of the post financial crisis time period, Canada has outperformed the United States on key economic metrics such as GDP growth, unemployment rates and median income growth.
These results were (yes, past tense) impressive:
- In 5 of the past 6 years, Canadian enjoyed stronger growth in GDP than the United States;
- Canada’s employment performance was better than the US, post financial crisis through 2013, reversing a long standing trend of American unemployment rates being lower than Canadian;
- Over this same time period, Canadian incomes moved up faster than in the US.
However, our half decade of economic success relative to our American neighbours has come to an end.
Port Metro Vancouver an Economic Bright Spot for BC
The transportation and logistics industry centred in Greater Vancouver comprises a big part the region’s economic and employment base and also makes significant contributions to the larger BC economy. So it is encouraging to learn that business has been rebounding at Port Metro Vancouver – the most important piece of the Greater Vancouver Gateway cluster.
Review finds higher pay levels and outsized wage increases in BC's municipal sector
Concerned about rising taxes at the local level? Employee compensation in your municipality is probably a factor.
A couple of years ago the Business Council published a report documenting steady and significant increases in local government operating costs in Metro Vancouver’s 20-odd municipalities. Although the picture varied across communities in the region, collectively municipal expenditures in Metro Vancouver soared by 80% over a ten year period. Ongoing inflation and population growth mean that municipalities must spend more to meet the service requirements of local residents and businesses. But we found that even after adjusting for population and inflation, municipal operating costs in the Metro Vancouver area jumped by 32% between 2000 and 2010. This is three times higher than the comparable rate of growth in provincial government operating expenditures over the same period -- despite the fact that the province pays the lion’s share of costs for health care and education.
An Aging Population…Let the Games Begin
An update on Canada’s demographic future from Statistics Canada confirms what is readily discernable through casual population: the population is growing modestly but is becoming greyer at an accelerating pace.
Healthy Gains in Retail Spending in BC
After a number of years of sluggish growth, retail sales in BC have made some impressive gains recently. A year ago, retail spending in the province was basically flat. In the second half of 2013 and through the first quarter of this year the retail environment improved, with annual growth in retail sales advancing to around 4%. Over the past three months, spending has accelerated again, climbing to a 7% annualized growth rate.