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Business in Vancouver: Falling oil prices could put $1.5 billion in BC pockets

[EXCERPT] "For B.C., it’s a net positive,” said Ken Peacock, chief economist for the Business Council of British Columbia. “When gas prices drop like they have, it’s a direct savings for families and households, and that gives them more money to spend, and that boosts the economy.”

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Vancouver Sun, Pete McMartin: Lessons for BC from Alberta

[EXCERPT] “If LNG comes to fruition in a significant way,” wrote B.C. Business Council executive director Jock Finlayson in an email to me, “let’s not repeat Alberta’s mistake by ‘spending/consuming’ virtually all of the economic rents associated with producing LNG. A substantial portion of such rents should be saved and invested for future generations.”
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“It is tempting at times,” wrote Finlayson, “to envy a jurisdiction like Alberta that is endowed with vast resource wealth, the exploitation of which has made them the richest province in the country. But because Alberta’s economic success is so inextricably tied to a single economic sector, it is in some respects in a very fragile and vulnerable position. The multi-decade oil and gas boom, interrupted at times by periods of falling prices, has made Alberta wealthy, but a case can be made that it also gave birth to a somewhat distorted economy in which labour costs, other business costs, and even public sector costs have been driven up across the board by high levels of activity and outsized paycheques in the energy patch.”

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CBC Television: Ken Peacock on oil prices

BCBC Chief Economist Ken Peacock discusses declining oil prices with Andrew Chang on the CBC Vancouver evening newscast.

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Times Colonist: Collapsing oil prices hit BC residents working in Alberta

[EXCERPT] B.C. Business Council chief economist Ken Peacock said the slowdown in Alberta from collapsing oil prices does have negative implications for other provinces.

But Peacock noted that not all of the British Columbians commuting to Alberta for work will be laid off or have their hours cut, so it is only a portion of the 1 to 1.5 per cent of the B.C. labour force that would be affected.

“But if people who are making good incomes who are commuting to Alberta get laid off, it will impact their households,” said Peacock.

He noted there are B.C. companies that do business in Alberta that will also be affected by the slumping oil-based economy.

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Vancouver Sun: Falling diesel prices won't affect bottom line for trucking companies

[EXCERPT] Business Council of B.C. executive vice-president Jock Finlayson said falling fuel prices may give trucking companies a short-term increase in profit margins, but doubts those higher profits will last.

“Truckers will obviously be happy to see lower diesel prices because they are a huge part of their overall cost structure,” he said. “But if these low prices are sustained over time, you will see downward pressure on (freight rates) because it’s a highly competitive industry. None of this happens instantly, and it could take months to play out.”

Finlayson said consumers will be the ultimate beneficiaries of falling petroleum product prices.

“If the price of food fell by 30 or 40 per cent, the primary beneficiaries wouldn’t be any of the suppliers or the intermediaries in the food value chain,” he said. “It would be the consumers of food products, and that’s what I see happening (in the trucking industry).”

Finlayson said no one could have predicted six months ago that global oil prices would plunge by 50 per cent, and he doubts that current low prices will last long-term, unless the global economy goes into a tailspin.

“But I think it’s true that the outlook for oil prices over the next couple of years is dramatically lower than people thought six months ago,” he said.

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Vancouver Sun: Collapsing oil prices hit BC residents working in Alberta

[EXCERPT] B.C. Business Council chief economist Ken Peacock said the slowdown in Alberta from collapsing oil prices does have negative implications for other provinces.

But Peacock noted that not all of the British Columbians commuting to Alberta for work will be laid off or have their hours cut, so it is only a portion of the 1 to 1.5 per cent of the B.C. labour force that would be affected.

“But if people who are making good incomes who are commuting to Alberta get laid off, it will impact their households,” said Peacock.

He noted there are B.C. companies that do business in Alberta that will also be affected by the slumping oil-based economy.

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Vancouver Sun: Economic Uncertainty clouds Premier's Natural Resource Forum

The provincial government’s 12th annual Premier’s Natural Resources Forum will convene next week in Prince George with a cloud shading some of the sunny optimism that has shone on British Columbia’s resource industries in recent years.

“The big story is the overall global setting and global backdrop, and for commodities, that’s relatively weak,” said Ken Peacock, vice-president and chief economist for the Business Council of B.C.

Peacock added that it is not all gloom though.

While slower growth in Asia has curbed prices for commodities such as steelmaking coal and copper — dulling the prospects for B.C. mining — forestry is experiencing more of a rebound due to recovery of the American economy.

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Vancouver Sun, Editorial: B.C. poised for strong economic growth in 2015

[EXCERPT] To some extent, B.C. and Ontario will be doing well by default, the result of the declining fortunes of the oil-producing provinces, Alberta, Saskatchewan and Newfoundland and Labrador.

But 2.6- or 2.7-per-cent growth for B.C. — projected respectively the Business Council of B.C. and the Conference Board of Canada — is nothing to complain about, and better than the 2.3-per-cent GDP growth of 2014.

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Globe & Mail, Gary Mason: Impact of plunging crude prices varies across the Western provinces

[EXCERPT]   "Among other things, plummeting global prices [for oil] will deliver a blow to Canada's terms of trade, which translates into slower growth in nominal incomes and GDP," says leading economist Jock Finlayson, chief policy officer with the Business Council of B.C.

"It is also pushing down the exchange value of the Canadian dollar, which means a dollar of Canadian income buys less in global markets – that is, we have become poorer in a global sense. Because the oil, gas and pipeline sector has, in recent years, accounted for one-third or more of non-residential business investment, the fall in oil prices also has negative implications for the level of business capital spending in Canada, which will further dampen economic growth."

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iPolitics: The Drilldown: KXL showdown in D.C. leaves Prentice undeterred

[EXCERPT] A recent report by the B.C. Business Council is putting a damper on the size of megaproject investments like those in the LNG industry, notes the Vancouver Sun‘s Vaughn Palmer.

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Vancouver Sun, Vaughn Palmer: B.C.’s ‘whopping’ capital project list is a bit of a whopper

Inventory of projects inflated by LNG and others that likely won’t proceed, business council warns

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Vancouver Sun, Barbara Yaffe: Global forces dampen BC's economic outlook

Few could have predicted 2015 would see B.C. and Ontario competing to lead the pack on economic growth.

The Ontario-B.C. horserace reflects stalling economies — due to oil price declines — in formerly booming Alberta, Saskatchewan and Newfoundland.

The Business Council of B.C. forecasts provincial GDP will grow 2.6 per cent this year, up from 2014 growth of roughly 2.3 per cent.

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Business in Vancouver: Blue skies ahead for BC economy, analysts predict

[EXCERPT] The price of oil is predicted to stay low throughout 2015. That could have an impact on the price of LNG, which is tied closely to the price of oil.

Because of that link, don’t be surprised to see more LNG investment decisions delayed in 2015, wrote Business Council of British Columbia economists Jock Finlayson and Ken Peacock in a December 29 commentary.

“We would not be surprised to see more proposed LNG projects in B.C. postponed or deferred until global energy markets stabilize,” they wrote. 

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Vancouver Sun: Outlook for BC business in 2015 remains stable

[EXCERPT] Ken Peacock, chief economist at the Business Council of B.C., also said the U.S. recovering economy is a major factor in the province’s stable outlook.

He noted the U.S. economy is growing at a “much more meaningful rate,” topping three per cent.

Despite the increasing importance of exports to Asia, led by China, the United States accounted for nearly half of B.C.’s $33 billion in exports in 2013.

And Peacock noted that even though the forest sector is not as large as it once was, it is still the largest source of export revenue for the province.

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Reuters: Vancouver's high housing prices post headaches for job recruiters

[EXCERPT] "Housing prices are a concern for that exact reason," said Ken Peacock, the chief economist at the Business Council of British Columbia. "It makes it more challenging for younger people starting a family."

Vancouver's expensive housing also made it tough for companies to bring in new talent from other regions, in particular senior executives, he said

"There is a sticker shock phenomenon," Peacock said. "A lot of these people are coming from 5,000 square foot estates and here they get a three-bedroom bungalow."

Also posted online with the Financial Post and the South China Morning Post

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Vancouver Sun: Kathy Kinloch completes first year of reinventing BCIT

[EXCERPT] Greg D’Avignon, president of the Business Council of B.C., has followed Kinloch’s career for several years and sees her vision of bringing educators, businesses and students together as the next step in the elevation of B.C.’s economy.

“The battle is going to be for capital and for talent, and Kathy as much as anyone in the province really understands that,” said D’Avignon.

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Business in Vancouver: Carbon tax think-tank makes for strange bedfellows

With a board of directors that includes David Suzuki Foundation CEO Peter Robinson and former NDP politicians Mike Harcourt and Bob Rae, few might register surprise over a new think-tank called Canada’s Ecofiscal Commission calling for a national carbon tax.

But when Preston Manning, the father of modern Canadian populist conservatism, recently threw his weight behind a national carbon-pricing scheme, it shocked some conservatives.

Canadian business leaders, particularly in the oil and gas industry, might be less surprised, however. Suncor Energy (TSX:SU) CEO Steve Williams is an Ecofiscal Commission member – as is Manning.

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Business in Vancouver: Site C approval raises BC skilled labour concerns

[EXCERPT] BCBC CEO Greg D’Avignon agrees labour could be a challenge but points out that new major projects will start as others, like the Rio Tinto Alcan smelter expansion, are winding down, and that a slowdown in the Alberta oilfields may free up workers, many of whom are British Columbians who might welcome the chance to come home to B.C.

He added the B.C. government and BC Hydro have done a good job of providing skills and trades training and thinking about the timing and co-ordination of major projects.

Even so, B.C. is going to need foreign workers, he said, not only on the construction projects themselves but also in areas like food services in work camps, and that means the federal government is going to need to revisit the restrictions it has placed on the Temporary Foreign Worker Program.

“The federal government is going to have to review the unintended consequences of the temporary worker model,” he said. “The labour base in the north is just not big enough.

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Video - Vancouver Sun: Conversations that Matter featuring Tom Syer

This week’s Conversation that Matters features Tom Syer of the Business Council of British Columbia on the impact of the Tsilhqot’in Supreme Court decision and its impact on investment and resource development in the province.

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Vancouver Sun: Site C mega-project a welcome boost for construction industry

[EXCERPT] Greg D’Avignon, president of the Business Council of B.C., added that Site C could be an important component in developing the large workforce major LNG proponents would need, although they might wind up competing for workers.

“Any time you build capital projects like Site C you’re going to have workforce challenges,” said Ken Peacock, the business council’s chief economist. “The labour-market environment is going to change over a decade, you’re never going to be able to time (projects) perfectly.”

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