BC’s provincial government has a key role to play in shaping the province’s economy. Taxation, access to natural resources, transportation, education and skills development, environmental regulation, labour rules and many other social programs all fall under the provincial government’s jurisdiction. The Council conducts research and analysis on all these topics and regularly contributes to public-policy development at the provincial level.
Finlayson & Peacock Op-Ed: B.C. tax regime hurts new investment in equipment, technology (Business in Vancouver)
While B.C. has recently posted some impressive economic numbers compared with the rest of the country, in a few areas we continue to underperform. The most glaring example is non-residential business investment.
Investment in “tangible” capital, such as machinery, equipment, structures, advanced technology products and engineering infrastructure, is essential to a thriving business sector. Increasingly, investment in “intangible” forms of capital, such as research and development, patents, trademarks, business processes and employee training, is also becoming a key ingredient in business success. Both kinds of capital contribute directly to economic growth and job creation in the short term. And with time, the benefits of such investments are magnified. Expanding and improving the stock of capital means that employees have up-to-date machinery and equipment, modern facilities, more efficient infrastructure and better intellectual property products to work with, allowing them to become more productive (and, hopefully, to earn more).
SUBMISSION in advance of the 2017 Provincial Budget
The Business Council's submission to the Select Standing Committee on Finance and Government Services in advance of the 2017 Provincial Budget
Finlayson & Peacock Op-Ed: B.C.’s economic buffer in the energy downturn: real estate (Business in Vancouver)
BC’s economy looks to be in decent shape. The province led the country in economic growth last year and will likely do so again in 2016. In the U.S., just six of the 50 states exceeded B.C.’s 3% GDP growth rate in 2015.
So why is our province faring so well? One reason is that we don’t produce much oil and so have avoided the worst fallout from the worldwide oil price collapse. The weaker Canadian dollar has also helped. Non-resource manufacturing, high technology goods and services, agricultural products, tourism, and film and television production have all enjoyed hefty gains, in part because a feebler Canadian dollar makes them more competitive in the North American market. But other provinces also benefit from a cheaper currency.
In fact, much of B.C.’s recent success reflects the unusual strength of the domestic economy. And supported by record low mortgage rates and steady inflows of migrants and wealth from outside our borders, the residential housing complex has had a starring role in B.C.’s robust domestic economy, via new home construction, high levels of renovation spending and escalating home prices.
New Regional Effort Aims to Establish Cascadia Innovation Corridor
British Columbia and Washington leaders come together to strengthen collaboration, create cross-border opportunity
Innovation for Jobs and Productivity:
Fostering High-Growth BC Businesses, Creating More High-Paying Jobs
How can British Columbia draw on its strengths to build a vibrant, diverse economy, one that produces rewarding employment opportunities and rising incomes for the people who work and do business here? Scholars and leading international organizations agree that the best route to sustained prosperity is by developing a highly productive economy.
Finlayson& Peacock Op-Ed: 15% property transfer tax should not apply to non-Canadians who move to Metro Vancouver for bona fide employment reasons (Business in Vancouver)
The way the government designed its property transfer tax scheme means that it will impose a stiff financial penalty on foreigners who locate here to take jobs.
The Lower Mainland’s frothy housing market continues to attract a great deal of media and political attention. In late July, the B.C. government responded to mounting public anxiety over soaring housing prices by instituting a 15% property transfer tax (PTT) on “foreign” purchases of residential real estate in Metro Vancouver. This measure predictably has raised the ire of the real estate industry, in part because it has captured, unfairly in our view, many in-process transactions that pre-date the effective date of the tax.
It is unclear whether the higher PTT will dampen housing demand. Initial evidence does point to some slowdown in the pace of real estate activity. The fact that foreigners have been responsible for at least 10% of all residential property purchases in the Vancouver region suggests that the new tax should have some effect.
An Updated Look at British Columbia's Parks, Protected Areas and Conservation Efforts
Conservation of land and marine areas is an important part of recognizing natural, ecological, and/or cultural values of biodiversity. British Columbia is a world leader in this regard.
Commissioned Paper: Fiscal Options for Building a Prosperous British Columbia - By Kevin Milligan
BCBC commissioned an independent review of the efficiency, effectiveness and fairness of British Columbia’s current tax system, and potential policy approaches to modernize the system in the context of today's economic realities. The Milligan paper notes that BC faces two key fiscal challenges: generating the government revenues needed to fund public programs and services going forward, and ensuring a healthy level of investment and business growth to sustain a strong economy.
Finlayson Op-Ed: B.C. needs to step up its game on innovation (Vancouver Sun & Troy Media)
The economic and business environment in which British Columbia operates is shifting. A number of trends are transforming the global economy in ways that can either help or hinder the quest for prosperity by countries and sub-national regions. The principal forces identified by the McKinsey Global Institute are: i) urbanization, particularly the rapid growth of cities in emerging markets; ii) accelerating technological change and the rise of the digital economy; iii) population aging and slower labour force growth; and iv) the onward march of globalization, via expanding cross-border flows of goods, services, finance, people and data – a trend that is heightening competition among jurisdictions for capital, talent and high-value business activity.
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.
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.
RELEASE: Business Council Welcomes Budget Surplus and Commitment to Tax System Review
The Business Council welcomes today’s provincial budget and supports the government’s plan to generate modest operating surpluses over the next three years. The Council also applauds the government’s announcement that it will launch a Commission on Tax Competitiveness with a view to strengthening the tax base and improving competiveness for business operating and investing in British Columbia.
An Overview of Canada’s Environmental Assessment Regime
As the Liberal government takes up the reins in Ottawa, it has signalled a shift in its approach to energy, environment and natural resource development, particularly in the context of resetting relations with Aboriginal peoples. As it sets out to review Canada’s EA processes, several key principles should be top of mind:
- The integrity of the regulatory process and institutions are best maintained when they are at arms-length from the political realm.
- A core purpose of a regulatory body is to evaluate technical matters in an impartial way, free from undue political or stakeholder influence.
- Regulatory reviews that set (and adhere to) timelines promote certainty for proponents and contribute to a favourable setting for investors.
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.
British Columbia Since 1995: A Brief Retrospective
As we ponder what British Columbia will look like in 2035 as part of our 50th anniversary programme, it is useful to review how the province’s economy and society have been reshaped over the past two decades, a period of time that has seen the rise of Asia, an expansion of BC’s gateway economy, the development of new and emerging industries, various commodity cycles, changes in the currency, steady inflows of migrants, population aging, and continued urbanization.
What follows is a brief snapshot of a number of significant, high-level economic and demographic trends that have influenced the province since the mid-1990s. But first, to provide a bit of context, we highlight a few features of the political setting and the wider external environment from two decades ago.
Overqualified Workers and the BC Government’s “Skills for Jobs Blueprint”
Late last month the provincial government provided some details on its planned re-engineering of the public post-secondary education (PSE) and training system, which will see additional funding directed to expand capacity to educate/train young people in high-demand occupations – and, presumably, result in fewer dollars being available to fund programs in other parts of the PSE system. One of the key factors behind the revamp is a belief among policy-makers that the “supply” of and “demand” for skills are out of alignment in the current labour market.
A Snapshot of Government Debt Across the Land
The start of the 2014 government budget season is an opportune moment to update the figures on accumulated public sector debt for Canada’s ten provinces as well as the national government.
BC Budget 2014 - Balanced and Uneventful
Operating within a very tight fiscal framework, Finance Minister Mike de Jong tabled a budget on Tuesday that projects a small surplus for fiscal 2014-15, followed by larger surpluses in the two subsequent planning years. Given the limited fiscal maneuvering room, the Budget contained only a handful of modest spending measures and a few small tax initiatives. Notably, there was nothing major in the area of skills training.
While some commentators will be critical of the limited spending increases, we recognize the accomplishment of keeping the budget in the black without imposing significant tax increases – something few other provinces are managing to do. Running surpluses puts BC in a strong fiscal position, especially at this juncture of the business cycle. The Business Council believes BC’s competitive position has eroded in recent years. Although fiscal circumstances prevented the government from cutting or restructuring taxes, this is an area the province will have to address in the future as some BC industries face challenges linked to the province’s move back to the antiquated Provincial Sales Tax (PST), while others are grappling with the steepest carbon tax in North America, skilled labour shortages, onerous municipal property taxes on industry, and steadily escalating electricity costs.
News Release: Business Council applauds budget for providing sound fiscal framework - Global competitiveness requires greater focus on skills training, efficient regulatory processes and effective tax structures
February 18, 2014 (Victoria, BC) – The Business Council of British Columbia applauds today’s provincial budget in which the government delivered on the commitment to keep the operating budget balanced and to manage the overall provincial debt, preserving BC’s Triple A credit rating.
“As the province moves into surplus and focuses on realizing new economic opportunities, there will need to be definitive action taken to ensure both new development opportunities and ongoing business operations are more competitive,” said Greg D’Avignon, President and CEO of the Business Council of British Columbia. “This focus on competitiveness will need to encompass infrastructure, human resources, regulatory systems and taxation policies that enable success in a highly competitive world.”
Submission: Water Sustainability Act for British Columbia Legislative Proposal
The Business Council's comments on the Ministry of Environment’s Water Sustainability Act for British Columbia: Legislative Proposal.