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Times Colonist, Vancouver Sun, CTV, Global, News 1130, Business council says B.C.'s economy will lose momentum for 2017-18
The Business Council of British Columbia says the provincial economy is poised to "downshift" in 2017.
The council's annual economic review and outlook says the real estate market, consumer spending and exports are slowing, leading to the loss of momentum.
The report forecasts gross domestic product, or the value of goods and services provided, will slow to an average pace of 2.2 per cent for this year, with a similar performance expected for 2018.
The report says the biggest factor is the slowdown in the residential real estate market in Metro Vancouver, which ripples through the wider economy with less demand for services and some retail segments.
The council says the near-certain imposition of stiff U.S. penalties for softwood lumber imports from B.C. also weighs on the province's exports for 2017 and 2018.
Business in Vancouver: Liberals’ LNG fixation shortchanged other sectors: critics
[Excerpt] “On LNG, it is clear the government over-promised when it talked about five LNG plants by 2020 and a vast new prosperity fund largely financed with LNG-related revenue streams,” said Jock Finlayson, executive vice-president and chief policy officer for the Business Council of BC.
“That said, continued upstream gas investment in northeastern B.C. suggests that the prospect of LNG remains alive and that we may well see a couple of significant projects advance in the next few years.”
Finlayson said it’s odd that the Liberal government has focused exclusively on exporting B.C.’s abundant natural gas and not promoted its use as an energy source domestically “even though it’s the cheapest option.”
Journal of Commerce Video: Jock Finlayson at Buildex Vancouver
Finlayson also spoke to the Journal of Commerce about the current state of the B.C., Canadian and global economy, and addressed concerns and potential benefits of the new U.S. administration.
He also discussed why the Lower Mainland is seeing an economic and employment boom, while the rest of the province is not seeing similar gains.
Business in Vancouver: British Columbia’s not-so-revenue-neutral carbon tax
[Excerpt] Jock Finlayson, chief policy officer for the Business Council of BC, agrees with the Fraser Institute’s assessment.
“They presumably did this in an effort to persuade the business community that the carbon tax has not increased overall costs for companies operating in B.C.,” Finlayson said. “But for the vast majority of firms in B.C., the truth is that the carbon tax has increased the aggregate cost of doing business in B.C.”
Vancouver Sun: Christy Clark tells board of trade an MSP cut was best way to dole out surplus
[Excerpt] B.C.’s job market will strengthen with the MSP cut, and businesses that pay MSP premiums on behalf of employees will find it more attractive to retain workers, said Jock Finlayson, executive vice-president of the B.C. Business Council.
“I’m not saying 100 per cent of the cost reduction for the employer is passed to the employee on day one, but over time we’d expect a hefty chunk of that cost savings to show up in the form of an upward wage adjustment,” said Finlayson.
Times Colonist: Businesses cheer PST break on electricity, cut to corporate tax
[Excerpt] On the whole, the business community gave Tuesday’s budget a thumbs-up.
“In macro terms, it is a pretty good budget and it will have an impact on business and consumer confidence,” said Jock Finlayson, executive vice-president of the Business Council of B.C. He noted that when the PST on electricity, tax-rate cut and MSP initiative are combined, it has a solid impact on the bottom line.
“The MSP cut is a benefit to a lot of employers, a lot of large and mid-sized companies pick up that tab for employees. Those employers will see a reduction in payroll taxes, which should be good for jobs and hiring, as well as cash flow.”
The Chronicle Herald: Reaction mixed from interest groups responding to B.C.'s 2017-18 budget
Greg D'Avignon, Business Council of British Columbia:
"Delivering a balanced budget within a climate of modest economic growth and a mixed outlook for commodities sets B.C. apart and signals that the province is a stable place to invest and do business."
Goldstream News Gazette: B.C. BUDGET: Property transfer tax take to drop to $1.54 billion as hot market cools
[Excerpt] While the tax on real estate deals has become a huge cash cow for government, B.C.’s economic growth has also become increasingly reliant on the jobs associated with home construction, renovation, sales and related business.
“We have become quite dependent in terms of the growth dynamic on the broad housing and real estate sector,” said Business Council of B.C. executive vice-president Jock Finlayson. “As that cools off, and I think it is cooling off, we’re like to see the economy lose a bit of momentum.”
Finlayson said he’s satisfied that the government’s budget has allowed for that cooling, with its 2.1 per cent forecast for economic growth, slightly below the average forecast of economists.
Merritt Herald: Medical premiums cut by half in B.C. budget
[Excerpt] Jock Finlayson of the Business Council of B.C. said large employers would benefit as well as individuals.
“A fair chunk of that MSP premium reduction is going to flow through to business or employers generally, including public sector employers,” Finlayson said.
Times Colonist: $50-billion B.C. budget trims medical premiums, boosts education
[Excerpt] As for business, it will benefit from a decision to phase out the seven-per-cent provincial sales tax on electricity. The B.C. Liberals promise to cut the tax to 3.5 per cent on Oct. 1 and eliminate it on April 1, 2019.
The budget trims the small business tax rate from 2.5 per cent to 2 per cent beginning April 1 — the second lowest rate in the country behind Manitoba.
The Business Council of B.C said the PST cut on electricity will particularly help forestry, mining and manufacturing.
“Today’s budget offers a series of tax measures which, together, will help to keep B.C. on a path towards a more productive and competitive economy,” Jock Finlayson, executive vice-president, said.
Business in Vancouver: Reactions to B.C. Budget 2017
Jock Finlayson, chief policy officer, Business Council of BC
“It’s going to be a fairly good budget from the perspective of business,” Finlayson said. “We’re happy with the removal of the PST on electricity. That’s going to be helpful for a lot of the export industries.
“The reduction in the MSP premiums, that will actually help employers because a lot of employers do pay MSP on behalf of their staff. And generally, the government’s stewardship of the of the province’s finances has been quite prudent and that tends top be well received in the business community.
“Having said that, there continue to be challenges around the competitive environment in B.C., especially for export industries, so we’ll be pushing the government – whoever it is – to implement the recommendations of the Commission on Tax Competitiveness.”
Vancouver Sun: B.C. budget offers cut to MSP premiums, but no reduction to PST or income tax
[Excerpt] Reaction to the budget was mixed – it earned praise from the business community and those who had long opposed MSP premiums, cautious support from teachers, and scorn from those who’d expected more money for child welfare and social services.
BC Business Council vice-president Jock Finlayson praised the PST reduction on electricity for businesses.
“It’s a pretty good budget, I think it will have a tangible impact on business confidence and consumer confidence,” he said.
Finlayson admitted that government’s decision to focus almost entirely on MSP instead of other tax reductions “took us a bit by surprise,” but the PST electricity reduction had been the top request of the business community for tax reform. “We’re really pleased to see that move,” he said.
That was echoed by Catalyst Paper Corporation and coastal mayors in mill towns who praised the PST electricity change as a necessary measure to help save jobs in the coastal forestry sector.
Journal of Commerce: B.C. economy charges forward while the world wavers
B.C.'s economy is pulling ahead of the rest of Canada and construction is leading the charge.That's the opinion of Business Council of British Columbia executive vice-president and economist Jock Finlayson, who was one of the keynote speakers at the Independent Contractors and Businesses Association's 20th annual CEO breakfast, held at Buildex Vancouver.
"Construction is a long-term growth industry for B.C. with growth over a 15-year period at twice the pace of the economy," Finlayson said, though he cautioned non-residential construction is much weaker than residential work. "It's not an exaggeration to say B.C. has a housing and construction-centric economy."
Jobs in the Lower Mainland are also "skyrocketing," he said, though most jobs in the province are concentrated in metro Vancouver and the Fraser Valley.
B.C. was also the strongest province in Canada in terms of overall growth in 2015-16 and real gross domestic product (GDP) was 2.9 per cent in 2016. Finlayson predicted the province's GDP would slow to 2.2 per cent in 2017, and stay at that rate throughout 2018.
"This is based on a slowdown in lumber sales to the United States, along with a slowdown in retail sales and a slight decline in housing starts," he said.
Globe and Mail: B.C. Liberals’ pile of surplus cash masks serious deficit in services
[Excerpt] Economist Jock Finlayson, chief policy officer for the Business Council of B.C., doesn’t believe Mr. de Jong will have much room to play with after all the spending promises have been accounted for.
“I think the surplus will be fully spoken for – and perhaps then some – by the time we pore through the details of the budget,” he said.
He said government can count on growing revenues, although growth will slow compared to the year just ending. “Tourism is firing on all cylinders, high technology is doing well, film and TV production is setting new records,” he said, as just a few examples.
“While there will be some room for targeted tax measures over the course of a three-year fiscal plan,” Mr. Finlayson concluded, “it’s hard to imagine the surplus is large enough to finance big-bang tax cuts.”
BIV on Roundhouse: B.C.'s 20-year roadmap to prosperity
At 21:15 the Business Council of B.C.’s Greg D’Avignon delves into a new policy paper, BC 2035 outlining recommendations to government and private sector for a 20-year path to greater economic prosperity.
Globe and Mail: Will the foreign buyers tax endanger B.C.’s housing windfall?
[Excerpt] Working from those figures, the Business Council of B.C. calculated that the real estate sector – including construction, renovations and other spinoffs – accounted for 35 to 40 per cent of the province’s economic activity.
“It has played a big role in B.C.’s growth story,” said Jock Finlayson, economist and chief policy officer for the Business Council. “It’s not the only thing, but it has made an outsized contribution. And the government’s stronger-than-expected revenues are due in part to the strength of the housing industry – which of course is now diminishing.”
Journal of Commerce: Buildex Blog: the ICBA CEO Breakfast
[Excerpt] Business Council of British Columbia economist Jock Finlayson also addressed the CEO breakfast with a look at B.C.'s economic prospects in what he termed "an uncertain world."
Finlayson cited the new and "untested" U.S. administration, Brexit, shifting tides in the European Union, and a possible shift in China-U.S. relations.
However the outlook in B.C. is generally good, Finlayson said. The global economy remains in low gear, with growth globally only around three per cent.
Vancouver Sun: B.C. Liberal government promises financial relief in throne speech
[Excerpt] B.C. Business Council vice-president Jock Finlayson urged government to first focus on tax reforms suggested by a recent tax competitiveness commission, which called for more exemptions on machinery and equipment to increase productivity.
Globe and Mail: Trump ban drives Christy Clark to refine B.C. foreign buyer’s tax
[EXCERPT] Last August, senior economists Jock Finlayson and Ken Peacock of the Business Council of B.C. warned that the new property tax on foreign buyers would make it even harder to lure outside talent to take jobs in the lower mainland. “Over time, sky-high housing costs threaten to precipitate a gradual hollowing out of corporate Vancouver,” they wrote.On Monday, Mr. Finlayson said the tax was a concern to more than just the tech sector. “As soon as the tax was announced, we began to hear from some of our members who were worried it would hamper efforts to recruit global talent to companies and academic institutions in Greater Vancouver,” he said. He said it is too early to measure whether the policies of the Trump administration will translate into opportunities to expand British Columbia’s tech sector. “But it’s an opportunity worth pursuing, not only for those with the qualifications to take mid-level and senior positions in B.C. technology companies, but also for academic researchers, senior-level executives, and perhaps even medical specialists with hard-to-find expertise.”
Business in Vancouver: Subsidized daycare can pay for itself, study finds
[Excerpt] Jock Finlayson, executive vice-president and chief policy officer for the Business Council of British Columbia, said there is support among his organization’s members for increased access to daycare, especially for lower-income families.
“Adopting a universal, low-cost model, paid for entirely by government, is another matter,” he said. “The latter would require a big tax increase, which would be expected to have negative impact on economic and job growth – thus partially offsetting the economic benefits of universal daycare emphasized in the Fairholm report.”
Finlayson and the Canadian Taxpayers Federation point to Quebec, which has offered $7 per day daycare since the late 1990s but has some of the highest tax rates in Canada.
And despite having subsidized child care, some parents in Quebec still find it hard to find available placements for their children and end up paying market rates for private daycare.