BCBC In The News
Vancouver Courier: Metro Vancouver home values to drop this year, but recover in 2021: poll
Pavlov’s co-panellist, Ken Peacock, chief economist of Business Council of B.C., referred to the real estate industry as “the oil of the B.C. economy.” He observed that the downturn in the real estate market was having wider-reaching effects on the provincial economy, including a reduction in retail sales in sectors such as home improvement and furniture.
Peacock added that he found it “a bit alarming” for a provincial government to be celebrating falling real estate values and taking credit for this outcome.
Vancouver Sun: More court challenges expected over new Trans Mountain Pipeline decision
Business Council of B.C. president Greg D’Avignon said Thursday that if these types of projects can’t get built, there is a real problem in Canada, as they pay the bills for education, health and for fighting poverty.
Most concerning is that Canada’s investment confidence is increasingly being eroded as it becomes known as a place you can’t get things done, said D’Avignon.
While the rule of law in Canada allows for challenges to be filed in court, they are also being used as a tool when some parties don’t get their way, he said.
“That’s not how our country was built — catering to the minority,” added D’Avignon.
Also published in Fort McMurray Today.
BIV Today Podcast: B.C. Budget 2019
On BIV Today...
Leaders from B.C.’s business community break down the province’s 2019 budget. Guests include Business Council of B.C. chief economist Ken Peacock (17:02).
Tyler Orton hosts.
Financial Post: Few incentives in spending-heavy B.C. budget, global downturn worries business
British Columbia’s budget pays too little attention to the potential impacts of a slowing global economy and a shifting housing market, business leaders say.
Finance Minister Carole James is banking on continued strong economic growth to fund long-term social and economic programs amounting to $2 billion over the next three years, but that’s risky, B.C. Business Council president Greg D’Avignon said Wednesday.
He said the council, which represents many of the largest employers in the province, credits the government for the budget initiatives that support families and environment programs, but it should not take business for granted in a darkening economy.
“I would caution the government that to take the economy for granted is at their peril,” D’Avignon said. “There’s a complete absence of economic vision in the face of what we see are some increasing strong head winds facing the economy in B.C. and Canada.”
Also published in the Prince George Citizen.
Salmon Arm Observer (Black Press): B.C. business groups worry about looming economic decline in wake of NDP budget
Business Council of B.C. executive vice president Jock Finlayson said in a news release he budget did not acknowledge slower global growth, which has started to already affect B.C. He questions where the NDP plans to pull money from in the future to support its spending.
“British Columbia is not immune to the storm clouds darkening the global economy,” Finlayson said. “In fact, despite several years of solid GDP growth and low unemployment, we are starting to see mixed economic signals in the province, with sluggish retail sales, increased outmigration to other provinces, and a major adjustment underway in housing markets.”
CFJC Today: B.C. budget includes child fund, climate plan, Indigenous revenue sharing
A spokesman for one of B.C. major business organizations said the budget numbers are credible, but investors would have liked to have seen more efforts to stimulate growth in the budget.
"We expected to see a bit of a spending-oriented budget from the NDP and I think they delivered on that," said Jock Finlayson, vice-president of the B.C. Business Council. "It's a budget strong on the social side, but weak on the economic development side."
Also published in the Prince George Citizen.
Times Colonist: Businesses see ‘storm clouds’ as their costs increase
Jock Finlayson, vice-president of the B.C. Business Council, said “it’s more of a social budget, to be candid, which is fair enough. It’s an NDP government.
“We don’t think there’s enough around building a competitive, productive economy — nothing really that will increase productivity at B.C. companies, which is really the only sustainable way to raise wages in the long run.”
Vancouver Sun: B.C. Budget 2019: Government offers only modest new spending
“It’s a budget strong on the social side and quite weak on the economic development side,” said Jock Finlayson, executive vice-president of the B.C. Business Council. “It’s complacent. It says the relatively strong economy we’ve been operation on will continue. I’m not sure that’s necessarily true.”
Finlayson said James deserves credit for resisting what must be immense pressure from within her party to spend big. “The fiscal and economic projections I think are credible,” said Finlayson.
Business in Vancouver: Budget 2019
The Business Council of BC welcomed some of the programs designed to address the high cost of living in B.C., including a new child benefit, which is more than double the previous child tax benefit that it replaces, and applies for children up to the age of 18.
But it warned that the B.C. government does not seem to be taking seriously enough the signals that a global economic slowdown may be looming.
“While government is putting more resources into a variety of worthwhile program areas, including child care, housing and anti-poverty initiatives, paying for this requires a competitive and growing economy,” said Jock Finlayson, BCBC’s chief policy officer.
“The budget does not pay sufficient attention to the headwinds facing the economy due to slower global growth and rising tax and regulatory costs here at home. We wonder where future economic growth will come from to support the spending measures outlined in this budget over time.”
Global News: B.C. budget 2019: Government’s stand-pat, balanced budget includes moderate child care, housing boosts
“I think the government in this budget is coasting a bit on what has been a fairly strong economy,” B.C. Business council executive vice-president Jock Finlayson said.
“We do see a material slow down in the U.S. and globally. I don’t think this budget takes enough account of the economic risks that are there.”
Globe and Mail: B.C. forecasts seventh straight balanced budget, boosted by population, employment and thriving industries
Jock Finlayson, chief policy officer at the Business Council of British Columbia, said the BC NDP government is working with a slender surplus that could be easily thrown off if the economy weakens. “It’s a pretty skinny surplus on an almost $60-billion budget,” he said an interview.
LNG Canada has started work on constructing its $18-billion Kitimat export terminal and TransCanada Corp. is doing preliminary work on its $6.2-billion Coastal GasLink natural gas pipeline route from northeast B.C. to the West Coast.
The Unist’ot’en protest camp, supported by five prominent Wet’suwet’en Nation hereditary chiefs, opposes Coastal GasLink.
“If the LNG project is derailed at this point, it would be disastrous for the investment reputation of British Columbia,” Mr. Finlayson said.
Globe and Mail: B.C. budget predicts end to real estate correction, increase in revenues
“This is a spending budget, they are investing in some of the political priorities of a social democrat government,” said Jock Finlayson, chief policy officer for the Business Council of BC. “The budget does not pay sufficient attention to the headwinds facing the economy due to slower global growth and rising tax and regulatory costs here at home. We wonder where future economic growth will come from to support the spending measures outlined in this budget over time.”
He agreed with Ms. James’s assessment of the housing market: “The real estate adjustments under way look to be pretty big. I’m not sure they have run their course yet, and that may have a slightly bigger dampening effect on revenues than they have forecast," he said.
Times Colonist: $20 billion tagged for B.C. infrastructure
Jock Finlayson, executive vice-president and chief policy officer for the Business Council of B.C., said the organization is comfortable with the 15 per cent taxpayer debt-to-GDP, pointing out B.C. has one of the lowest ratios in Canada. “We do have a pretty strong balance sheet.”
“So B.C. looks pretty good on both of those measures. That’s been true for quite a few years,” said Finlayson, who was happy to see a $20-billion investment in infrastructure announced.
“There is a lot of unmet need for capital in this province” for projects such as roads, bridges, hospitals and school retrofits, he said.
However, Finlayson said that while the government is putting more money into worthwhile programs such as child care, housing and anti-poverty initiatives, a continued growing economy is needed to cover those costs.
“The budget does not pay sufficient attention to the headwinds facing the economy due to slower global growth and rising tax and regulatory costs here at home,” he said.
“We wonder where future economic growth will come from to support the spending measures outlined in this budget over time.”
Globe and Mail: B.C. Finance Minister says budget will offer gradual spending for affordable child care, education
But Jock Finlayson, executive vice-president of the Business Council of B.C., said he expects government will act within the confines of a barely balanced budget focusing on social, Indigenous and environmental priorities. Any actions, on child care, he said, will fall short of the government’s past commitment to $10-a-day daycare.
“There’s not a lot of flexibility,” Mr. Finlayson said in an interview. “If they’re not going to run deficits – and I don’t believe this government wants to run operating deficits – then it really raises the question of how fast and how big can they go on the social-spending side.”
Vancouver Sun: B.C. Budget 2019: What we got last year, and what we want this year
Finlayson would like to see a small reduction in one of the NDP’s taxes, arguing the tax bracket for higher income taxes should rise from $150,000 to $250,000, to align with policies in Alberta and Ontario. He also wishes for some type of relief for the industries that are the most affected by the increasing carbon tax.
Still, Finlayson anticipates James will produce a balanced operating budget. He would like to see a slight increase on the capital projects side — but wants B.C.’s current debt-to-GDP ratio of 14 per cent to stay below 20 per cent so that the province can hold on to its triple-A rating.
“We think there is a lot of unmet need for capital, both maintenance and to build new bridges and tunnels and infrastructure,” he said.
The throne speech was silent, he said, on attracting business investment in B.C. “To me that sends a signal that the budget won’t have much around building the economy. Because that has not been much of a major focus of this government. Their agenda has been more social and environmental.”
Abbotsford News: Opponents, business group pan John Horgan’s throne speech
That view was echoed by Greg D’Avignon, president of the Business Council of B.C.
“Where is the future economic growth necessary to sustain families and communities across the province going to come from?” D’Avignon said. “As economic activity continues to shift away from frothy housing markets and debt-financed consumption, we need to redouble efforts to build ‘tradeable’ industries that can generate export earnings and support good jobs.”
BIV: Businesses want government to table tax competitiveness
Second to trimming tax rates altogether, Business Council of BC (BCBC) chief economist Ken Peacock would like to see government address the threshold at which the province’s top marginal income tax rate kicks in. Earners currently pay 16.8% on income above $153,000.
“People living in Alberta can make twice as much before they start paying the top marginal tax rate in that province,” Peacock said. He said that has implications for B.C. businesses’ ability to compete for talent with neighbouring jurisdictions such as Washington state, where workers don’t pay state-level personal income tax.
Globe and Mail: Government interventions in real estate are cooling the market - how much success is enough?
Jock Finlayson, chief policy officer of the Business Council of B.C., said Ms. James should be bracing for greater losses ahead.
“If the NDP government wanted a cooler housing market, they must be quite satisfied with how things have developed,” he said. “The market has tanked, notably in the lower Mainland, with big drops in sales and a downward trend in prices that seems to be gathering steam.”
He said there are many factors for the changes – the province’s measures, the new mortgage rules and higher borrowing costs. But he said none of it is really helping restore affordability to the market for first-time homebuyers.
Curbing demand through taxation and lending policies is only part of the solution. What is needed is more supply, and he said it is local government that holds the key to getting new homes built.
“But this requires strong action and significant behaviour change at the local government level, and there is not much evidence that Victoria is pressing for any of this,” Mr. Finlayson said.
BC Business: Is B.C. losing its edge?
For Greg D’Avignon, president and CEO of the Business Council of British Columbia, it’s the best and the worst of times. “I’m really bullish on B.C. and Canada,” D’Avignon says. “We’ve got a huge opportunity.” Over the past three years, B.C. has tied Washington State for the highest gross domestic product growth in North America, D’Avignon relates. “But that performance is, frankly, inflated, and is increasingly being eroded by some real concerning fundamental competitiveness issues,” he maintains.
Since 2013, for example, the cost of running a company in B.C. has risen and regulations have grown more complex, D’Avignon says. “We’ve seen a $5.1-billion increase in the taxes alone on businesses operating in this province.”
Victoria News: B.C. businesses bracing for health payroll tax impact on jobs
Ken Peacock, vice-president of the B.C. Business Council, says one concern is that the tax adds another disincentive to employers to take on full-time workers and pay benefits. There is already a well-established trend to “gig economy” employment using part-time and short-term contracts, he said.
“It’s close to $2 billion when it’s all implemented, so it’s a big increase on businesses,” Peacock said.