BCBC In The News
Times Colonist: Election brings unwelcome uncertainty to business
The uncertain B.C. election results might have sown seeds of doubt through the provincial economy.
“Uncertainty is not a friend of business,” said Greg D’Avignon, president of the Business Council of B.C. after the Liberals appeared to have narrowly won the election, but face the prospect of a minority government.
D’Avignon said the business community already had concerns about the cost of doing business in B.C. The added uncertainty could translate into capital looking for new markets and investment drying up, he said.
“We knew it would be a tight election, but for the first time in 65 years we have uncertainty around a government’s agenda,” he said.
D’Avignon noted the province is facing a situation where three political parties with very different priorities could have a say in how government is run. “Business is very simple — regardless of which party is in power, whether I am a small business hiring one person or a big business investing hundreds of millions of dollars — I want to understand what the rules are and what the government agenda is,” he said.
CBC: Oilpatch watches nervously as B.C. heads to the polls
[Excerpt] "Energy issues haven't figured very prominently in the campaign," said Jock Finlayson, vice-president of the Business Council of B.C. "Including the Kinder Morgan pipeline expansion, somewhat surprisingly, given how contentious that's been."
Finlayson said he wouldn't be surprised if the NDP, if elected, slapped a moratorium on new fracking permits during that review.
"That's my understanding," he said. "That's not something the industry would be keen to see, but I think a moratorium would include the appointment of a panel that would do a fairly quick review, because there has been lots of work done across North America on fracking."
Vancouver Courier: Raising income taxes is risky business: Finlayson
When politicians talk about how to pay for promised programs, Jock Finlayson goes into mathematical fact-checker mode.
“If you want to say, ‘Let’s raise taxes,’ you need to have the arithmetic in front of you,” says the executive vice-president and chief policy officer of the Business Council of British Columbia.
The BCBC’s research shows that the top 20 per cent of B.C.’s income earners are contributing 75 to 80 per cent of the province’s income tax revenues. The top one per cent of income earners provide 20 per cent of the province’s income taxes.
The Liberals’ recent balanced budget proposed a 50 per cent cut in MSP (healthcare) payments starting in 2018.The NDP and Greens are proposing to cut MSP payments altogether and replace the $2.5 billion in lost income with some combination of personal and payroll taxes, Finlayson said.
The NDP and Greens want to shift those costs to the province’s higher earners. Finlayson says, “Our back-of-the-envelope estimates suggest that top combined federal-provincial marginal tax rates on upper-income earners, which stand at 47.7 per cent today, could easily climb to 55 to 56 per cent (or more) under the tax plans contemplated by the New Democrats and Greens.”
High taxation rates make it harder to attract and retain highly skilled people, Finlayson said. They also make it tougher on businesses and discourage entrepreneurial risk takers.
“Brains have legs,” Finlayson says of the risk of losing highly skilled workers such as managers, professional, entrepreneurs and researchers to high taxation rates.
National Post: Why Canada may have missed the boat on building a viable LNG industry
[Excerpt] “It’s a challenge for them to explain why the projects … and the scale of this massive industry that they were talking about a few years ago, haven’t really come to fruition,” said Jock Finlayson, executive vice-president at the Business Council of British Columbia.
“The Liberals would be happier if one or two of these projects had commenced, because they made this a pretty central theme in the 2013 election, and until quite recently it was the No. 1 economic policy preoccupation of the government to bring LNG over the finish line.”
Still, Finlayson argues the province’s economy has performed well even without LNG. Indeed, it has led the country in economic growth and job creation during the past couple of years, thanks to tourism, technology, forestry and, particularly, housing — all helped by the low Canadian dollar.
The Globe and Mail: BC Liberals are (once again) faced with HST fears on the campaign trail
[Excerpt] The BC Liberal Party also issued a statement to reassure voters that a VAT is no longer under consideration. “A panel on tax competitiveness last fall recommended a number of measures including removing PST on capital purchases and creating a B.C.-based Value Added Tax. The only recommendation we are moving ahead with is our commitment to exempt some inputs that job creators pay like the PST on electricity.”
Greg D’Avignon, president of the Business Council of BC, said he hopes the government that is formed after the May 9 election will be open to a broader tax-reform agenda: “What happens when the global economy starts to slow again? We’re not ready for it. These kinds of reforms can’t just be tinkering around the edges,” he said. He said rising protectionism south of the border has made the need for tax reform to make B.C. businesses more competitive even more acute now.
“Frankly, we have to stop talking about it and embrace the reality that the world has changed. It’s no longer the 1940s and we have a small, open trading economy. We have to figure this stuff out or we are going to get left behind.”
CKNW: BC Liberals accuse NDP of plans for massive top bracket tax increase, warn of brain drain
[Excerpt] Economist Jock Finlayson co-wrote the analysis and admits it’s speculative, as the NDP has not specified plans for such an increase in its platform, however he says the logic plays out.
He says while higher taxes for the wealthiest might not seem like a big deal to an average worker, it could have a wider impact on the economy.
“If we’re going to have much higher top tax rates here than other provinces or other parts of the United States, it’s going to be harder to attract companies to put head offices here, it’s going to be harder to create high paying sustained employment here, it’s going to be hard to generate a bunch of business innovation.”
Finlayson says with major tax cuts on the agenda in the U.S., putting B.C.’s top tax bracket in this range — should it be borne out — could put rates 15-20 per cent higher than south of the border.
The Globe and Mail: A growing divide
[Excerpt] Jock Finlayson, the Business Council of B.C.’s chief policy officer, said this real estate-fuelled wealth gap is the most troubling.
“In the business community, we are worried about it, it’s forcing people to look at living elsewhere. It’s forcing people with children to live in accommodations that are not really designed for families,” he said. “Those who are established in the market have all enjoyed an unearned windfall in wealth. It’s also tax free. How equitable is that, from the perspective of the 30 per cent of renters, or those who bought at top-dollar prices?”
Prince George Citizen: NDP, Liberals play loose with jobs history
In the view of Jock Finlayson of the B.C. Business Council, some context is necessary.
He noted the Asian financial crisis of 1997-98 translated into reduced prices for some of the commodities B.C. exports.
"That was one factor that hit the economy in B.C. - something that obviously was not under the control of the provincial government," Finlayson said.
But that's as far as it goes.
"It's fair to say the NDP's overall policy agenda over the 1990s, particularly as it affected forestry and mining, also played a role in weakening labour market conditions in your region," he said.
Among the government policies he said impinged on the province's natural resource industries were higher corporate tax rates, a corporate capital tax on large firms and more and increasingly complex government regulations.
He also pointed to a dramatic expansion of parks and protected areas, removing significant amounts of Crown land from potential economic development activity, although this region remained largely unscathed.
"A number of these policy initiatives may have been well-intentioned, but the cumulative effect on business was enough to discourage investment and cause some natural resource firms in B.C. to scale back operations," Finlayson said.
That said, Finlayson gave credit to the steps taken under then energy minister Dan Miller to increase oil and gas activity in northeast B.C.
"That, in turn, set the stage for the subsequent expansion of the industry in the early 2000s," Finlayson said.
As for the B.C. Liberal regime, Finlayson said that while B.C. remains subject to elements beyond its control - commodity prices, the state of global demand, and the value of the Canadian dollar - the current government "deserves some credit for its overall stewardship of the economy."
He listed balanced budgets, relatively low taxes on households, and an "inclination to allow market forces to operate instead of intervening extensively in economic activity," among their accomplishments.
"This approach to economic and fiscal policy has had a positive impact on business and investor confidence," Finlayson said.
Business in Vancouver: Mixed reviews for NDP platform among B.C. business groups
[Excerpt] Greg D’Avignon, president of the Business Council of British Columbia, said he likes the NDP’s focus on education and training to address skilled-labour shortages. But he added that its tax hikes could make B.C. uncompetitive.
He also wonders how the NDP plans to make up the lost revenue from scrapping bridge tolls.
“By eliminating tolls on the existing infrastructure, it’s probably a $500 million stranded capital that’s going to have to be serviced,” he said.
Vancouver Sun: WeWork leases seven floors of Vancouver's Bentall III tower for tech startups, freelancers to share
A New York-based company is turning a big chunk of downtown Vancouver real estate into shared office space for tech startups and freelancers.
WeWork announced Wednesday that it’s taking over seven floors in the Bentall III tower in a bid to attract 1,500 people to what it refers to as a “community of creators.”
The development is good news for Vancouver’s entrepreneurs, said Ken Peacock, vice-president and chief economist of the Business Council of B.C., but it also speaks to a trend toward more short-term, project-based employment in the so-called “gig economy.”
Business in Vancouver: Clark’s BC Liberals score high marks on economy
[Excerpt] But Finlayson said the government deserves some credit for its fiscal management, its taxation policies and its focus on economic diversification, which has helped shield B.C. from the kinds of shocks Alberta and Saskatchewan have suffered.
“I would give the government pretty good marks overall on their stewardship of the economy, recognizing they can’t take credit for all the positive things directly,” Finlayson said. “But they’ve certainly made a contribution.”
Business in Vancouver: Liberal supporters troll Horgan campaign kickoff
[Excerpt] In fact, the GVBOT and BCBC both say that they support additional funding child care, but not Horgan's plan.
“The NDP have yet to explain the new revenue source of these funds, and how such a program would be delivered,” the GVBOT states. “Without clearer details, it is difficult to ascertain whether the B.C.’s costly plan would be of a net benefit to the province's economy, and its families."
"We support two things: increasing accessibility of spaces and targeted subsidy on a means tested basis for families that require it," said BCBC president Greg D'Avignon. "We don't endorse what is being proposed by Mr. Horgan. To mischaracterize our view is really frustrating."
Business in Vancouver: Why loonie, not legislators, may be No. 1 force in B.C. economy
For more than two years British Columbians have been enjoying job growth best described as “unusually robust,” according to economist Jock Finlayson. While 2013 and 2014 were fairly anemic years, the West Coast – or, perhaps more accurately, the Lower Mainland – has since been buoyed by a white-hot real estate sector and the dollar’s decline.
“Overall job creation is going to slow down,” said Finlayson, executive vice-president and chief policy officer at the Business Council of British Columbia (BCBC).
“We’ve been seeing job growth of 3%-plus, which is extremely brisk for a mature economy like B.C. The Lower Mainland has been closer to 5%. Those numbers are unsustainable in our view.”
Business in Vancouver: B.C.’s forest industry faces marketplace headwinds
Anyone who read the most recent federal budget could be forgiven for thinking that the most important sector in Canada is clean tech.
While there are opportunities to expand that sector, policy-makers would be wise to recognize that exports from natural resource industries like forestry are still the “lifeblood” of Canada’s economy, Jock Finlayson, chief policy officer for the Business Council of BC, told delegates at a Council of Forest Industries conference in Vancouver last week.
He added that, while Asia is where the greatest growth will be, “the U.S. economy really still matters” to Canada’s resource sectors.
The recent federal budget barely mentions traditional industries like forestry, which in B.C. accounts for one out of every four manufacturing jobs and 20% of all exports moving through the Port of Vancouver and contributes $12 billion in provincial gross domestic product.
Prince George Citizen: B.C. First Nations, industry collaborating
Industry and First Nations have been thrust into business together on the B.C. landscape, so 22 champions have come forward to lead the charge for success. Eleven of these champions are aboriginal leaders, the other 11 are select industrialists. They have been called together by the B.C. Business Council and the B.C. Assembly of First Nations.
"They will meet quarterly over the next three years and ultimately work towards the development of policy approaches, pilots and best practices for First Nations and businesses in B.C.," said a joint statement issued by the two founding groups.
Some of those champions took the stage Friday at the Nation 2 Nation forum being held in Vancouver. They gave their views on what is needed for the mutual benefit of all stakeholders.
The panelists included Chief Derek Orr of the McLeod Lake Indian Band, former Initiatives Prince George board member Byng Giraud (now vice-president with Woodfibre LNG) and Chief Joe Alphonse of the Tsilhqot'in National Government.
Metro Vancouver’s cooling housing market is biggest factor for BC economy downshift: BCBC
British Columbia’s economy is expected to lose momentum this year, as a slowdown in Metro Vancouver’s once red-hot housing market will no longer be able to sustain the province’s economy as it has in past years.
With home sales dropping, most notably in Metro Vancouver, since late spring 2016, fewer new homes will be built in the province this year, which will affect BC’s overall economic performance, according to a Business Council of BC (BCBC) report published last week.
“There’s still going to be a reasonable amount of activity but it’s not more than the previous year so it won’t be adding to growth. It will probably be detracting slightly from growth,” BCBC Chief Economist and Vice President Ken Peacock tells BuzzBuzzNews.
Vancouver Sun: B.C.'s working poor: Low-wage jobs keep many living paycheque to paycheque
[Excerpt] B.C. business groups say that being forced to suddenly pay much higher wages would harm small companies, lead to lost jobs and cuts in hours for employees.
“For B.C. businesses that employ low-wage employees, moving quickly to a $15-per-hour minimum wage would amount to at least a 40-per-cent increase in labour costs, likely creating a shock to the labour market and causing many smaller firms to scale back their demand for entry-level workers in particular,” said Jock Finlayson, executive vice-president and chief policy officer at the Business Council of B.C.
Business in Vancouver: Budget 2017 includes new national housing strategy
[Excerpt] Budget 2017 is more policy-oriented tinkering than spending-oriented, as the Liberal government’s major spending plans – including $120 billion in infrastructure over 10 years – were largely laid out in the 2016 budget.
“Given the expectations and some of the buildup in advance of this budget, it turns out it’s largely a kind of a status quo document and I think that reflects the unsettled environment we’re in," said Jock Finlayson, executive vice-president and chief policy officer for the Business Council of BC.
He said it might be rash for the Canadian government to consider any major changes to taxation policies when it’s not yet known what kind of shakeup might come south of the border with respect to tax policies there.
“In terms of any further tax changes, that’s really been punted out into the future, and wisely so,” said Finlayson. “Given developments in the United States, it would be premature for the government of Canada to be overhauling in any meaningful way tax policy in Canada until we have a better idea of what the U.S. is going to be doing.”
Business in Vancouver: Budget’s housing strategy too little to fix housing crisis: BCBC
Transportation and lack of affordable housing consistently rank as the top two concerns for Vancouver businesses and average citizens, so a new National Housing Strategy sketched out in the 2017 Budget is likely to get a lot of attention.
“That’s $1 billion a year for 11 years,” Finlayson said. “B.C. might get $110 million of that per year, so I put it to you: What is $110 million of incremental federal funding for a national housing strategy actually going to do that addresses any concerns that people have about affordability in the B.C. market? My answer is that it will do very little.
“If government has money to pour into this area, it probably should go into to incenting the development of purpose-built rental housing aimed the middle income households," Finlayson said. "And I don’t know if that’s the focus here because they don’t really give us much detail.”
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.