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Economy

As trusted economists and policy advisors to business and government leaders, the Council relies on sound, evidence-based analysis to inform its policy recommendations. Through diligent tracking of BC’s economic performance, we help identify the opportunities and challenges the province must navigate in order to reach its full potential.

 

Federal Budget Delivers on Liberal Campaign Commitments...But Little New for Business

In his inaugural budget, Finance Minister Bill Morneau ushered in a new era of higher federal spending and sizable deficits. It is important to take note of the current context: a Canadian economy that’s still struggling to adjust to dramatically lower oil prices and a generalized downturn in global commodity markets. We should also take account of the federal government’s solid baseline financial position. Even with a string of deficits, the federal debt/GDP ratio is projected to remain essentially flat over the next half decade.

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BCBC Column: Budget 2016: What's in it for British Columbia? (Vancity Buzz)

Tuesday’s budget dips the country deeper into deficit to bring long promised support to lift up the middle class, First Nations, veterans and students. Although short on a clear path towards economic growth, the budget does offer some goodies that will compliment other efforts by the Liberal Government to advance innovation, infrastructure development and investment.

So – what’s in it for BC?  Here’s a closer look at what yesterday’s budget means for you and the BC economy.

How far into the red are we going?

While no one likes to accumulate debt, with today’s record-low interest rates and when spent strategically to support economic growth, deficit spending can help boost an otherwise lagging national economy. It is also important to keep some perspective.  The $30 billion in red ink that the Finance Minister is planning for each of the next two years should be seen against the backdrop of Canada’s $2 trillion economy.    The federal government’s  debt-to-GDP ratio is the lowest of the G7 countries. With that being said, the Business Council would like to see a strong focus over the medium term to bring the budget back into balance.   

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Post-Budget Economic Overview

Jock Finlayson presents a look at the global, national and BC economies in the context of the March 22nd federal budget.

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RELEASE:
Modest plans for economic growth supported by significant increases in spending
Council urges government to keep an eye towards Canada’s long term fiscal health

Vancouver, BC – March 22, 2016 – The Business Council of British Columbia welcomes today’s federal budget, which provides a modest boost to a sluggish Canadian economy and signals a renewed focus on stimulating innovation and infrastructure investments. 

With the government’s decision to run deficits over the foreseeable future leading to a significant increase in debt, fostering an environment for sustained economic growth is essential to ensure the debt is kept manageable relative to the size of the economy.  The Business Council believes the government should aim to keep the debt/GDP ratio on a downward track over the course of the updated fiscal plan outlined in Budget 2016.

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Growing Forward: Cultivating Productivity in BC’s Agrifood Supply Chain

The combination of $12B in annual revenue (in 2015) from the mix of agrifood-related activities collectively represents a sizeable contribution to the provincial economy. As for employment, the entire agrifood supply chain supports more than 300,000 jobs, although the bulk of these are in the retail/wholesale and food and beverage segments of the sector.

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Fast Facts on BC's Tech Sector

Tech is a good news story for BC – a story that we expect to continue. The province enjoys strengths in several different technology-based clusters – software and information and communications technologies; wireless technologies; bio-tech, life sciences and health innovation; clean/green technologies; and gaming and digital animation. Today's blog offers a few key facts about BC's Tech Sector.

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Consumers Helping Drive Growth in BC

Propelled by strong spending growth, the total value of retail sales in BC surpassed the $70 billion mark in 2015. Sales at stores, malls and shops are growing at a healthy clip and are a significant factor underpinning BC’s solid overall economic performance.

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Priorities for the 2016 Federal Budget

Business Council priorities for the 2016 Federal Budget.

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The 2016 BC Budget: High Marks for Fiscal Management...
But BC Must Do More to Improve Competitiveness

Unveiled by Finance Minister Mike de Jong on the afternoon of February 16, Budget 2016 tells a generally upbeat story of British Columbia’s economic performance and fiscal health. Economic and job growth are running above the national average, and BC is one of only two provinces expected to post a balanced operating budget (or surplus) both this year and in 2016-17.

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Finlayson Op-Ed: Commodity Slump weighing on Canadian and global economies (Troy Media)

The ongoing decline in the U.S.-dollar prices of most internationally traded commodity products has hit Canada’s economy hard, depressing incomes, triggering layoffs and capital spending cuts by hundreds of resource companies (and their suppliers), and hurting business and consumer confidence across swathes of the country.  It’s important to realize that the commodity carnage isn’t restricted to oil.  It’s also affecting natural gas, coal, base metals, potash, various industrial raw materials, and some segments of the agri-food sector.  Lumber prices have also beaten a hasty retreat in recent months.

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Finlayson & Peacock Op-Ed: British Columbia is out-performing most other provinces (Vancouver Sun)

Against the backdrop of slumping commodity markets and tepid global growth, British Columbia near-term economic prospects are surprisingly positive, creating a largely favourable backdrop for this week’s provincial budget. A recent Business Council report highlights some of the reasons why B.C. is doing better than Canada on several widely-cited performance metrics — including economic growth, job creation, retail sales, and housing-related investment.

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BC's Growth Story Remains Intact...Despite An Uninspiring Global Backdrop

Against the backdrop of diverging growth prospects across the developed and emerging economies and substantial declines in the prices of many commodities, British Columbia is poised for another year of respectable economic performance in 2016.

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Canadian Head Office Survey: How Do Metro Vancouver and British Columbia Stack Up?

This issue of Policy Perspectives reviews the recently released Statistics Canada Annual Head Office Survey, comments on its implications for BC/Metro Vancouver, and offers a few thoughts on factors that contribute to a robust head office “ecosystem.”

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Commodity Price Slump is Weighing on the Canadian and the Global Economies

The ongoing decline in the US-dollar prices of most internationally traded commodity products has hit the Canadian economy hard, depressing incomes, triggering layoffs and capital spending cutbacks by hundreds of resource companies (and their suppliers), and hurting business and consumer confidence across much of the country.

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Jock Finlayson Presentation Peering Through the Gloom: The Longer-Term Outlook for Commodities Presented at the BC Natural Resources Forum, Prince George, January 20, 2016

On January 20, 2016, Jock Finlayson participated in the Invested in Resources - Finances panel moderated by the Honourable Shirley Bond, Minister of Jobs, Tourism and Skills Training at the BC Natural Resource Forum in Prince George. Jock's presentation provides an overview of the current global economic climate and describes how British Columbia is well positioned to benefit from growth in global demand for many natural resource-based products over the next 25 years. Key to this will be government policy that focuses on creating a competitive operating environment to attract investment in resource extraction and upgrading --as well as in related infrastructure development.

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D'Avignon & Finlayson: If we don't supply oil, others will (Vancouver Sun)

It is time for a mature conversation on oil exports, against the backdrop of the economic reality we face in Canada and around the world.  Simply put, the evidence confirms that all of us will continue to need all forms of energy, including oil, over the coming decades.  For Canada, the key question is whether we want to have the option to safely export our oil to global markets other than the United States, currently our only customer, and which pays less than the world market price and requires less of our product each year. In 2013, energy made up one-quarter of Canada’s merchandise exports, of which oil and gas constituted the vast majority.  Finding ways to access the world market for our country’s biggest export industry should be a priority for all governments in Canada.

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Finlayson & Peacock: Five key economic predictions for 2016 (Business in Vancouver)

It’s the time of the year when business and government decision-makers are tempted to throw caution to the wind and ask economic soothsayers to forecast what lies ahead.  Below we take up the challenge, knowing that we may miss the mark in one or two areas but confident that our overall assessment will stand up to scrutiny.

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10 things to watch for in 2016

Last December, we compiled a list of ten things to watch for in 2015, with a focus on those expected to impact the provincial economy.  This year we are again compiling a list of trends and developments we believe will shape the BC economy in 2016.

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Finlayson: Canadian economy will remain sluggish in 2016 (Troy Media)

As the clock ticks down on 2015, it is time to ponder what may lie ahead for Canada’s economy. The near-term picture isn’t particularly heartening.  After a disappointing 2015 that included a minor “technical” recession in the first half of the year, Canada looks poised for a somewhat better, but still generally lackluster, performance. 

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Finlayson Op-Ed: B.C.’ s industrial economy is fading (Vancouver Sun)

Statistics Canada recently reported that B.C.’s economy grew by 3.2 per cent after inflation in 2014, putting B.C. second among the provinces. Gains in residential and commercial construction and a solid advance in consumer spending were the key contributing factors. The job market, however, was surprisingly subdued, with employment rising by less than 1 per cent on a year-over-year basis.

As the clock winds down on 2015, it appears that B.C.’s macro-economy continues to perform fairly well, at least by Canadian standards. Economic growth should end up exceeding 2.5 per cent this year, with strength in retail sales, housing-related activity, tourism, film production, and parts of the advanced technology sector. At a time when Canada’s economy is being pummeled by a deep slump in global oil and metals prices, B.C. is holding its own.

Yet if we look below the surface, the economic picture in the province is less favourable. In particular, what might be described as the “industrial economy” is clearly struggling, with negative implications for business investment and exports.

The “industrial economy” consists of primary resource extraction and related downstream processing in the forestry, mining, and agricultural sectors; the production, transmission and exporting of energy; oil and gas refining, chemical production, and cement/concrete manufacturing; food processing; plastics; non-metallic minerals; metal fabrication; primary metal manufacturing; and beverage manufacturing industries.

Taken together, the industries carry significant weight in our economy. Collectively, they employ almost 200,000 British Columbians, most of whom enjoy wages and benefits that surpass the average. These industries also represent an important source of demand for the outputs of many B.C. service sectors, including transportation, engineering, scientific and technical services, other professional services, environmental consulting, and financial services. Perhaps most strikingly, the enterprises that comprise the industrial economy dominate B.C.’s export base, accounting for around four-fifths of the province’s international exports, year after year.

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