2013 Federal Budget: A Combination of Following Through, Fiscal Restraint and Some New Funding for Priority Areas
Against a backdrop of softer economic conditions, Finance Minister Jim Flaherty tabled a budget still centered around achieving the Conservative government’s 2015-16 balanced budget target. To meet that objective, the Budget imposes meaningful but not draconian spending restraint. In turn, this left little capacity for much in the way of new spending or tax relief. The Budget does, however, direct additional funding to a few priority areas such as skills training and infrastructure investment.
Pull Back in Resource Sectors Tempers Overall Capital Investment in BC
The release of Statistics Canada's annual Public and Private Investment survey indicates that capital investment in BC is poised to edge higher in 2013. In aggregate, businesses and government plan on investing $46.9 billion on new residential and non-residential structures, industrial sites, drilling activity, machinery and equipment and all other new capital outlays this year. This represents an increase of 0.9% over 2012. Looking at only the non-residential segment, planned investment is slated to fall slightly (by 0.4%) this year. Despite the slumping housing market, BC developers who responded to the survey reported that they intend to boost residential investment spending by 3.6% this year. There is probably some downside risk to this projection given the ongoing slowdown in housing market activity.
Water - Blue Gold
Water, water everywhere and not a drop to drink – many will recall the famous musings of English poet Samuel Taylor Coleridge, in The Rime of the Ancient Mariner. Mark Twain once remarked, "whisky is for drinking; water is for fighting over.” Both statements are true.
This paper is more of a primer on water and water management than a discussion of policy issues or options, although at the end we touch briefly on the Business Council’s views on water policy in British Columbia, a topic which has been under discussion in connection with the ongoing Water Act reform process.
Understanding Economic Development and Reconciliation with First Nations in BC: The Case for Accelerating Economic Engagement
Jurisdictions around the world have engaged in a wide variety of initiatives to reconcile the rights of indigenous peoples within post-colonial government and market economies.
As a province largely without ratified treaties, British Columbia has, by practical and legal necessity, developed a relatively unique set of public and private sector tools to facilitate natural resource development activity on the land base.
In this issue of Policy Perspectives, we highlight the diversity of initiatives underway in British Columbia to advance economic development on the land base. The paper makes the case that there is a promising, albeit challenging, opportunity to move progressively down a path of economic and social reconciliation that will provide tangible benefits to both First Nations and the province as a whole.
Mental Disorder Claims Under the Workers' Compensation Act
- A Human Resources/Labour Relations Perspective
Section 5.1 of the Workers’ Compensation Act (the WCA) was enacted effective July 1, 2012. The intent of the revision was to expand the scope of mental disorder claims arising out of and in the course of employment which would be accepted as compensable under the WCA. One aspect of this expanded coverage involves a mental disorder claim by a worker that “is predominantly caused by a significant work-related stressor, including bullying or harassment, or a cumulative series of significant work-related stressors, arising out of and in the course of the worker’s employment.”
An immediate concern for employers from the implementation of Section 5.1 was an anticipated significant increase in mental disorder claims that would be filed by workers with WorkSafe BC. For those employer representatives responsible for administering compensation claims, it is expected that dealing with mental disorder claims may well evolve into a significant component of their work responsibilities.
A 'Balanced' but "Challenging' Provincial Budget
In his inaugural budget, BC Finance Minister Mike de Jong delivered on the government’s long-standing promise to balance the operating budget by fiscal 2013-14. While some additional funding is provided for health care and a smattering of small-scale initiatives in support of the government’s Families First agenda, meeting the balanced budget target overshadowed all other aspects of the budget. Eliminating the fiscal shortfall of more than $1 billion on schedule required a combination of tax increases, provincial asset sales, and a hefty dose of spending restraint.
BC Poised for Small Bounce in Economic Growth in 2013
In the latest BC Economic Review and Outlook, the Business Council of British Columbia upgrades our economic growth forecast for 2013 to 2.3%, projecting a stronger year than 2012 which is estimated to have grown at 1.9%.
Although the economy slowed in the latter part of 2012, we anticipate the provincial economy will gain some momentum in 2013 with positive economic growth projected for our major export markets including China and the United States and strong non-residential construction anticipated in British Columbia.
Canada's Economic Immigration Program to be Transformed
The Conservative government is embarking on a major overhaul of Canada’s economic immigration program. The new approach will give employers a greatly elevated role in the immigration process and hopefully reduce lengthy delays that have long plagued the immigration system. If it runs as anticipated, the revamped program should help deliver skilled immigrants to sectors and regions of the country where they are needed – and do so faster.
Thinking Through the Economic Consequences of Higher Taxes
As policy-makers in various jurisdictions consider options to generate more revenue by raising tax rates, instituting new taxes, or modifying existing tax rules, it may be useful to re-consider the economic consequences of following this path.
Cumulative Impact Assessment:
Is It Just a Fancy Way of Identifying and Managing Risk?
What is cumulative impact assessment?
A Decade by Decade Review of British Columbia's Economic Performance
By historical accident, the last two new governments to take power in British Columbia did so at the start of new decades: the NDP in 1991, and the Liberals in 2001. Not surprisingly, it’s become popular to argue that one party’s ability to manage the economy was shown to be better than another’s, based on which decade apparently produced the best overall economic outcomes. The Business Council of British Columbia has prepared an analysis of key economic indicators in British Columbia over the 1980’s, 1990’s and 2000’s to provide more data and gain greater insights into longer-term trends. Also, and of particular importance, we examine per-capita measures of economic activity, which take account of changes in population. Lastly, in this report we compare BC’s economic record to that of Canada as a whole. Because world economic conditions tend to affect BC and Canada similarly, determining how BC did relative to the rest of the country can provide a better sense of the extent to which the province capitalized on the global economic conditions of the day.
Quarterly Update: Impact of Slowdown in Asia Showing UP in BC Exports
In our summer 2012 economic update, we held our forecast for BC’s economy to grow by 2% for the year, citing the fact that a slight improvement in the domestic economy would likely offset the impact of a somewhat weaker global economy on the province’s export sector. While recent developments in the housing market prompt some concern about the resilience of the domestic side of the BC economy, elevated activity in non-residential construction is providing a boost to overall spending. Recent data also paint a mixed picture for BC’s exports. The slowdown in Asia is already showing up in BC’s exports, but shipments to the US are gradually recovering.
While it is a close call, as shifting domestic and external growth drivers are largely offsetting, the softer economic outlook for Asia has convinced us to trim our BC GDP growth forecast this year to 1.9% from 2%. Having already cut the outlook for 2013, and anticipating that China’s stimulus efforts will have some traction, we are leaving next year’s growth projection for BC unchanged at 2.2%.
Key factors in impacting BC’s economic outlook:
- The value of BC’s exports to China is down 3.7% year to date
- Excluding natural gas, exports to the US are growing at their fastest pace in seven years
- Retail spending in BC is up 3.9% year to date
- The number of homes in BC sold through the MLS system is down 25% from year-ago levels, average price of a home sold is off by 9%
- Non-residential construction is back to peak, pre-recession levels seen in 2006/2007
A Snapshot of British Columbia's International Exports: Commodities (Still) Rule
The latest issue of the Business Council’s economic newsletter, Policy Perspectives, provides a snapshot of British Columbia’s international exports over the last decade. Resource based products as a share of total exports have increased from 76% in 2002 to 80% in 2011.
- Metallic minerals and energy products more than doubled their share of the composition of BC’s exports with coal, equal to one fifth of the province’s merchandise exports, being a significant contributor to the overall increase
- The value of BC”s wood product exports dropped from $9.3 billion in 2002 to $5.7 billion last year, however with a US housing recovery and the development of new offshore markets in Asia, wood products are set to rebound in dollar terms
- With 80% of BC’s workforce in the service industry, the export of services to international markets is often overlooked. Canada ranks among the top ten global service exports and while there are significant limitations in the available data on services trade at the provincial level, estimates suggest that this could be as high as 20-25% of BC’s international exports
Maintaining a competitive environment for investment and economic development across our key resource sectors – and primary export industries - is critical to BC’s future economic well-being.
Environment and Energy Bulletin
Air Quality Regulation: Canadian and BC Developments
Over the last 35 years, the issue of air quality has become a predominant global environmental concern as a result of increased urbanization, industrialization, a growing demand for energy in all forms, and the world’s reliance upon vehicles as the primary mode of transportation.
Governments in Europe and North America took the initial steps at understanding and eventually regulating air quality in the 1960’s and 1970’s, with Canada implementing a formal regulatory approach in 1999 under the Canadian Environmental Protection Act. Since then, management of air quality has evolved in Canada and in British Columbia, which has its own provincial regulatory regime governing air pollution, including delegating responsibility to Metro Vancouver with respect to air quality in this region.
Post-Secondary Education A Key Determinant of Economic Success
Human Capital Law and Policy v2 n4
Reports from the BC Progress Board and the recent Commission on Reform of Ontario’s Public Services underscore some important facts about globalization and the acceleration of the knowledge economy: people are our most important economic asset – more important than resources, more important than financial capital.
Building Relationships with First Nations
(Published by The Province of British Columbia)
The purposes of this document are to: help companies understand the unique circumstances that frame the legal and business environment in British Columbia; and provide practical assistance and observations for building lasting relationships with First Nations. Relationship between proponents, as well as existing industries, and First Nations can provide solid foundations for effective consultation processes and business partnerships.
This document is divided into two broad sections. The first section provides an overview of the circumstances in the province and the role of proponents and/or existing industries in government’s consultation processes. The second section describes how some companies are building effective relationships with First Nations.
Changes to the Fisheries Act - The Sky is (Not) Falling
Recent changes to the Federal Fisheries Act had been the subject of considerable speculation until the Harper Government’s 2012 Omnibus Budget Bill was tabled earlier this year confirming the details of the proposed changes, some of which became law on June 29, 2012.
The Business Council’s latest Environment and Energy Bulletin clarifies some of the misconceptions about the changes to the original Act, which is nearly 100 years old, and outlines what these changes mean for the business community.
Canada Joins the Trans-Pacific Partnership
Canada is now actively negotiating for a formal spot in what many expect will become the world’s most exciting modern trade agreement – the Trans-Pacific Partnership (TPP). This is good news for British Columbia; as the country’s Pacific province we have more to gain than most other provinces. The benefits of the TPP could include increased exports to Pacific Rim markets, a boost to the local tourism sector and the development of stronger business-business and people-people connections between our province and fast-growing Asian economies. This partnership, however, is about more than trade. It will set a course for how nations manage future economic relations with China and there will be challenges for Canada along the way.
BC More Than Holding Its Own Amid Global Economic Turbulence
At a time of pronounced global uncertainty, BC's economy continues to grow at a decent pace and to outperform many other North American provinces and states. Although there are significant downside risks, BC's economy remains quite resilient with a rapidly shrinking deficit, an increasingly diversified export sector and steady population growth.
Over the 2010-2011 period, BC’s real economic growth averaged 3% - the fourth strongest in Canada and among the top jurisdictions in North America. Although growth will ease over the coming 18 months, this resilience will help to sustain provincial economic activity and keep BC in a relatively strong position even in the face of weaker international conditions.
The Business Council's mid year economic review and outlook anticipates that BC’s economy will grow by 2.0% for 2012 and 2.2% for 2013. Relative to our January outlook there is no change in the forecast for this year, but we have trimmed our growth projection for 2013 due to global turbulence and a slower local housing market.
Modest Growth Trajectory Continues for BC
BC Economic Index v11 n2
According to the latest reading of the Business Council's BC Economic Index, the provincial economy continued to grow in the second quarter of 2012. The pace of growth was moderate, with the Index advancing by a comparatively tame 0.2% from the previous quarter.