BCBC In The News
Vancouver Sun, Barbara Yaffe: BC's underground economy likely leads all other provinces
Have you ever paid a plumber under the table? Purchased pot from one of Vancouver’s proliferating marijuana dispensaries? Neglected to report rental income from a basement suite?
Such activities typically sidestep taxation, contributing to an underground economy the Business Council of B.C. believes is especially active in the province.
“We believe that unobserved, unreported and untaxed economic activity is more prevalent in British Columbia than in the country as a whole,” say council chief policy officer Jock Finlayson and chief economist Ken Peacock.
They contend B.C.’s underground economy could be equivalent to 10 per cent or more of reported GDP.
It is not so much that British Columbians are more dishonest or tax-averse than other Canadians. They just have greater opportunity to cheat.
“Our economy is heavily skewed toward self-employment and unincorporated small business, where unreported transactions are more common,” according to a report issued recently by the council.
Vancouver Sun: A nation of free traders? Not when other provinces are involved
[Excerpt} Ken Peacock, vice-president and chief economist of the B.C. Business Council, says the B.C.-Alberta deal’s biggest impact is probably the way it facilitates labour mobility, recognizing credentials of 130 to 140 professions or trades regardless of which province certified them.
This no doubt benefited Alberta when its oil-fired economy was running flat out, and now that B.C. is leading the economic pack, it will benefit us. Not to mention that it’s not much loss to the weaker economy when, as is often the case, workers who leave would otherwise be unemployed.
But it’s an embarrassment as well as an economic encumbrance to have so many vestiges of protectionism linger internally in an era when Ottawa is making such progress in opening up international trade. The CFIB members are right: it’s time for the premiers to get on with it.
Global News: BC's latest employment numbers provide cautious dose of optimism
Canada’s hobbled economy received an encouraging jolt Friday as the labour market showed a surge of 58,900 net jobs last month, many of which appeared in a sector considered key to the country’s rebound: factories.
The job-growth figures, released by Statistics Canada, provided a cautious dose of optimism the economy will begin chugging again after reversing in the first three months of 2015.
In B.C., the economy gained 30,600 positions, with 2,600 of the gigs in manufacturing.
“Trendlines show pretty weak job growth, frankly, for Canada and for B.C. looking over, say, three, six or nine months,” said Jock Finlayson of the Business Council of B.C. “Nonetheless, last month’s numbers are certainly hopeful. B.C., though, will do better than Canada, for sure, in terms of economic performance this year and next year.”
Times Colonist Guest Comment: Tourism Strengthens, diversifies our economy
[Excerpt] Similarly, tourism is important to the province of British Columbia and is a pillar of the B.C. Jobs Plan. This spring, Jock Finlayson of the B.C. Business Council remarked that: “The tourism industry and the advanced IT industry are the two sectors that will guide B.C. through this current resources slump.” Finlayson also remarked on how labour-intensive the tourism industry is, providing quality employment that keeps citizens engaged in the economy and gaining new skills.
Vancouver Sun: First Nations series: Staking claims in the B.C. economy
[Excerpt] Still, for every project being held up by First Nations opposition, there are many more examples of successful partnerships. Business Council of B.C. executive vice-president Jock Finlayson says his organization is nervous about growing aboriginal expectations and whether the cost of reaching agreements could make some projects financially unfeasible, but generally the council supports more involvement by natives in the economy through revenue-sharing and impact-benefit deals. "I think there are ways over time where we can potentially move to make this a bit of a competitive advantage for B.C.," said Finlayson. "I am struck that we are getting more done here jointly with First Nations in more of a 'kind of partnership' fashion than has been typically seen in other parts of the country where they have treaties."
Business in Vancouver: Million-dollar homes become symbol of growing inequality in Vancouver
[Excerpt] The Business Council of BC and BC Chamber of Commerce tackled the issue in a series of panel discussions and a 2013 report, which suggested modest investments in early childhood education, improving access to post-secondary education, introducing a tax credit for low-income working families and steady, predictable increases to the minimum wage.
Vancouver Sun First Nations Series: Staking Claims in the BC Economy
[Except] Still, for every project being held up by First Nations opposition, there are many more examples of successful partnerships. Business Council of B.C. executive vice-president Jock Finlayson says his organization is nervous about growing aboriginal expectations and whether the cost of reaching agreements could make some projects financially unfeasible, but generally the council supports more involvement by natives in the economy through revenue-sharing and impact-benefit deals.
"I think there are ways over time where we can potentially move to make this a bit of a competitive advantage for B.C.," said Finlayson. "I am struck that we are getting more done here jointly with First Nations in more of a 'kind of partnership' fashion than has been typically seen in other parts of the country where they have treaties.
Business in Vancouver: Site C dam energy cost concerns rising
[Excerpt] Business Council of BC executive vice-president Jock Finlayson agreed that there are many CEA [Clean Energy Act] upsides. They include its focus on tapping the province’s extensive renewable energy resources and fostering a greater role for First Nations in energy development.
But given the market realities of the shale oil and gas revolution and the huge reserves of natural gas the province has, he said B.C. “should take a fresh look at natural gas as a low-cost, and relatively low-carbon, energy source, including in the electricity sector.”
Vancouver Sun: Tax breaks that target small business hurt the economy more than they help
The big tax breaks that the feds and the provinces give to small business retard economic growth more than they foster it, says a new study from C.D. Howe Institute.
The study cites previous research suggesting that if small businesses are able to duck taxes, the cost of adding this amount to the load carried by other businesses or citizens could create a net loss to the economy. And the total amount of tax revenue lost to the federal provincial treasuries because some businesses choose slower growth over much higher tax rates was estimated to be $375 million a year — not huge, but significant.
This amount is made more significant, however, in the light of an analysis done last year by Jock Finlayson of the B.C. Business Council. He nailed down what ought to be obvious to policy-makers — that not all businesses are created equal.
For example, 55 per cent of B.C.’s businesses — all of which get major tax breaks — employ only their owners. The real job creators are the companies that grow to at least medium-size, if not large. Indeed, fewer than 10,000 businesses out of the nearly 400,000 in B.C. create 36 per cent of all jobs.
This reinforces the Howe analysts’ point that it’s better for the economy to spread business tax breaks among companies of all sizes.
BC Business: The #BCBiz Daily B.C.'s billion-dollar underground economy
B.C.’s underground economy is the third largest in Canada according to a recent Statistics Canada report. While this $5.9-billion industry may seem substantial when compared to other provinces, these figures may in fact be low. "The underground economy (UE) is a complex subject," writes Jock Finlayson of the Business Council of B.C. "Unsurprisingly, it is hard to measure transactions that are unreported, deliberately hidden, and/or undertaken in the 'shadows.'" As for the latter, the report explains: "For the purpose of this study, some illegal activities, such as those related to drugs and prostitution, have been excluded."
Vancouver Sun Editorial: Population changes pose policy challenges
Demographic projections for B.C. indicate that policy-makers need to start preparing now for several inevitable population shifts.
According to a new Business Council of B.C. report, a number of potentially problematic trends will soon become apparent.
B.C.’s population growth will be moderating in years to come, making economic growth tougher to achieve in the absence of significant, and alas unlikely, productivity gains.
The province also is poised to grow older and more urbanized, with smaller centres outside four key communities — Victoria, Vancouver, Abbotsford and Kelowna — finding it increasingly difficult to find workers.
By 2035, B.C. will be home to one senior for every two working-aged people.
The business council describes this stunning age shift as “an extraordinary and unprecedented development” which will have serious implications for government tax revenues and for the labour force. Seniors retire. They tend to pay less tax and consume more health care resources.
Troy Media: Vancouver needs to add head offices
[Excerpt] The Business Council of British Columbia (BCBC) is taking positive steps to attract Asian corporations to locate their head offices in the Vancouver area. The Council is providing funding and in-kind support valued at $1,221,000 - the Federal Government, through Western Economic Diversification Canada, is providing funding of $1,951,750 and the Provincial Ministry of International Trade is providing both funding and in-kind support valued at $3,385,250 - into its HQ Vancouver campaign, which was launched last February. This initiative puts Vancouver in competition with other cities around the world that are competing to get these and other firms and the benefits that come with them.
Business in Vancouver: India's sleeping economic tiger will take time to awaken
[Excerpt] But while B.C. business leaders and economists say India’s economic growth potential is impressive, it’s no China, and the growth of business opportunities in India will grow at a much slower pace.
“India is more about the future than the present,” said Jock Finlayson, executive vice-president and chief policy officer for the Business Council of British Columbia. “I think there is a potential and it’s a huge market. I think commerce with India will grow, but it’s going to grow slowly.
Kamloops This Week: Seniors set to dominate population
The city and region need to gear up for a decline in population growth, as well as a future in which the area has one adult over 65 for every two adults in the workforce.
A report from B.C. Business Council released this week found the province’s population increase is slowing from robust growth of the 1980s and 1990s. The report details a slowing in population growth that reached 2.6 per cent a year in the early 1990s to less than one per cent today.
Author Ken Peacock said Kamloops shares some urban aspects with those core areas and can expect to attract northerners looking for warmer climes, as well as Greater Vancouver residents seeking lower housing prices and an end to gridlock commutes.
Vancouver Sun, Editorial: Strong Alberta remains crucial to Western Canada
[Excerpt] An NDP government is bound to create a degree of uncertainty for business in Alberta, with a watering down anticipated of the so-called “Alberta Advantage.” Notley has pledged to raise provincial corporate taxes to 12 per cent, the same level as in B.C., and introduce a more progressive system of income taxes that would increase the revenue take from top earners.
An NDP government also is expected to review royalty rates for energy companies, strengthen environmental protections and encourage more refinery capacity in the province.
All this, says Business Council of B.C. president and CEO Greg D’Avignon, will probably result in more capital investment and workers coming to B.C. which would increase this province’s labour pool, reducing labour costs.
Business in Vancouver: What does Alberta's orange crush mean for BC?
[Excerpt] Greg D’Avignon, president and CEO of the Business Council of British Columbia, is concerned that Notley’s promise to raise corporate income tax as well as taxes on high income earners will dampen Alberta’s already-shaky economy.
"Companies, when they make investment decisions, look at a myriad of things and corporate tax is one of them,” he said.
“When you’re bringing in top talent and their job is to create wealth, [higher income taxes] can be a headwind against attracting that talent.”
Vancouver Sun: Get ready for an older population: report
If you’re a senior looking for a great place to play endless rounds of golf or games of bridge through your golden years, then the Okanagan Valley’s the place to be.
But if you’re a young parent and want a place where your kids will have plenty of friends and outdoor pursuits, you may choose to head up the Sea to Sky Highway to Squamish.
Those are two of the conclusions in a Business Council of B.C. report that found, among other things, that B.C.’s population growth has not only slowed, averaging 0.9 per cent annually, but that the number of people aged 65 and over is growing at four times the rate of the number of working-aged people (25 to 64), “an extraordinary and unprecedented development,” the study said.
Business in Vancouver: Role reversal? China's F-Pacific expands manufacturing, headquarters to Vancouver
[Excerpt] HQ Vancouver — a joint initiative between Ottawa, Victoria and the Business Council of B.C. (BCBC) aimed at luring Asian companies to Vancouver — worked with CFONSG to bring F-Pacific’s new regional office to the West Coast.
This marks the first time since HQ Vancouver’s creation in February that the organization has drawn a company from Asia to Vancouver.
Conservative MP for Richmond Alice Wong, Minister of State for Seniors, said at the announcement that F-Pacific’s decision to move to Vancouver reflects the strengths of the HQ Vancouver initiative.
Over the next three years, Victoria is contributing $3.4 million to HQ Vancouver, while Ottawa is contributing $1.9 million and the BCBC is providing $1.2 million in funding and in-kind support.
Vancouver Sun: Chinese fibre-optic firm to open North American head office in Vancouver
[Excerpt] Yuen Pau Woo, president of HQ Vancouver, called securing the F-Pacific investment a major win, which gives the province a manufacturing foothold in an emerging sector as China Fiber Optic seeks to expand its sales in North America.
HQ Vancouver is a public-private effort funded by the Canadian and B.C. Governments, along with the Business Council of B.C., to encourage medium-to-large sized Asian corporations to establish North American head offices in B.C.
Vancouver Sun: Chinese Manufacturer sets up BC plant for fibre-optic components
[Excerpt] The deal to bring F-Pacific to B.C. was two years in the making, and for the recently formed HQ Vancouver initiative aimed at attracting more Asia-based businesses to the province it represents an early success.
“The short-term significance is the establishment of a real facility that will employ hundreds of people and produce hundreds of millions of dollars of exports,” said Vancouver HQ president Yuen Pau Woo, formerly CEO of the Asia Pacific Foundation of Canada.
“That’s not trivial at all in a time when global economic conditions are tough,” Woo said, but the longer term significance is in F-Pacific’s ambitions to expand in North America.
While North America has a lot of fibre-optic trunk networks, Woo said the continent remains relatively under-served when it comes to fibre-optic connections directly to households.
“If (F-Pacific) can penetrate the North American market working with Telus, Rogers, Bell and Sprint, and all the other suppliers, imagine the kind of expansion we could see in North America.”
For Woo, who heads an initiative funded by Canada, B.C. and the Business Council of B.C., F-Pacific is something of a beacon for other Asian companies evaluating this province as a viable beachhead for North American operations.
“Location, business environment, IP protection, political stability, skilled labour force — we’ve got it all,” Woo said. “And if it’s true for F-Pacific, it’s true for other companies that want to locate here.”