B.C. Business Matters:
BC Ports and Shipping Industry are Global Leaders
The shipping industry is one of the oldest in the world but is not well known -- even though many immigrants arrived by boat to North America. Settlers relied on ships to move supplies to the New World from the Old World. Today, shipping is still a fundamental means of conducting trade and transporting goods from place to place. In Canada, shipping represents the dominant mode of bulk deliveries for both exports and imports to and from markets other than the United States.
BP's Global Energy Outlook 2035 - Confirmation of Some Key Energy Trends
Given the critical importance of energy production and use to our societies (economic , social and environmental), the forecasting of energy supply and demand is an essential tool in helping to shape the myriad public and private sector policies and investment decisions required to ensure energy availability and effective energy resource use.
The Upside of a Lower Dollar for BC
In early May last year the Canadian dollar was trading near parity with the US dollar. Between May and mid-October it fluctuated between 99 and 96 US cents per Canadian dollar. In November the Loonie started on a more definitive downward trend and by early 2014 it had fallen sharply to about 91.5 US cents. This relatively rapid decline hurts Canadian residents inclined to shop in the US, snowbirds and residents vacationing south of the border. But on balance, the fall in the Loonie is good news for BC in an overall economic sense.
The Plight of the Overeducated Worker
One feature of today’s labour market is the swelling ranks of what appear to be “over-qualified” or “over-educated” employees.
BC Productivity Numbers Disappoint
Statistics Canada has just released productivity estimates for 2012, and for BC the news isn’t very heartening. Labour productivity in the province’s business sector fell by 1.4% last year, after posting a solid 2.8% gain in 2011.
Signs of Life: Retail Spending in BC Gaining Some Strength
After more than a year of moving sideways, retail spending in BC is finally showing some signs of strengthening.
What Does BC’s Triple A Credit Rating Have To Do With Dim Sum?
In a world that is riddled with debt-laden governments, BC’s comparatively low debt-to-GDP ratio and coveted triple A credit rating are increasingly being viewed as strategic advantages that can help to promote the province from a fiscal and investment perspective.
The Location of Corporate Headquarters in a Shifting Global Business Landscape
Emerging economies now account for roughly half of world economic output (measured using purchasing-power-parity exchange rates), and their share is projected to continue growing over the next several years and beyond. As they loom larger in global markets, emerging economies are also becoming more important as centers for all kinds of businesses, including the major multinational enterprises (MNEs) that traditionally have been concentrated in a handful of mature Western economies.
Canada and BC Greenhouse Gas Emissions – How are we doing anyway?
In the just published 5th assessment report of the International Panel on Climate Change, the authors tried to be less uncertain with their predictions about climate change than in the past. They concluded that “[w]arming of the climate system is unequivocal, and since the 1950s, many of the observed changes are unprecedented over decades to millennia. The atmosphere and oceans have warmed, the amounts of snow and ice have diminished, sea level has risen, and the concentrations of greenhouse gases have increased.” Canada is part of the United Nations Framework Convention on Climate Change and in 2009we signed the Copenhagen Accord, which committed thecountry to reduce greenhouse gas emissions to 17% below 2005levels (737 MT CO2e) by 2020 (~ 612 MT CO2e).
HST Era Food Services Receipts Rose and Fell, But Stronger Growth has Followed the Return to PST
BC reverted back the PST system on April 1st of this year. It is still too early to determine what specific impacts this important change in tax policy will have on BC’s economy. Economists and public finance scholars are virtually unanimous in believing that shifting back to the PST will have negative long-term consequences in key areas such as business investment, productivity and the growth of real wages. However, the picture is a bit less clear from a shorter-term perspective.
One sector where the return to the PST may have a favourable near-term impact is the food services industry. This is because the HST raised the tax-inclusive price of meals purchased from food services establishments, whereas restaurant meals are not subject to the PST – meaning the retail price is lower for consumers. While it is still early, data on restaurant sales receipts are available through July of this year, providing a full quarter of sales figures under the reinstated PST. The graph below shows the total value of all food services receipts in BC (full service and limited service food establishments, drinking places and special food services such as caterers). The data are seasonally adjusted to better show short-term changes and trends.
Four Observations on Local Government Finances in BC
This week’s Union of BC Municipalities (UBCM) convention showcased a major new report on local government finances authored by a UBCM committee. Entitled “Strong Futures: A Blueprint for Strengthening BC Local Governments’ Finance System,” the report argues that the current municipal financing model, which depends in large part on property taxes to fund local services, needs to be overhauled. In particular, the paper advances a case that municipalities in BC should have access to more revenue sources – including revenue streams that are closely linked to economic growth, such as sales tax and even income tax. Local governments in BC, the paper notes, are “heavily reliant on the property tax, which neither grows with the economy nor distributes costs fairly” (p. 6).
British Columbia's Resource Sectors are the Foundation of a Diversified Economy
A review of BC Business Magazine’s Top 100 list of British Columbia companies by revenue for 2012 reveals the province’s economic mosaic, showcasing diverse organizations such as Telus, HSBC Bank Canada and Finning International. It also reveals the extent to which the foundation for British Columbia’s economic prosperity is our natural resource sector. More than 20 of the top 50 private sector companies are directly involved in mining, forestry or natural gas, and there are dozens more throughout the list which act as service providers to these core industrial sectors.
The Gender Gap
This commentary has nothing to do with the environment, or maybe it does.
Despite making up 51% of the global population, women are under-represented in overall economic participation by 40% and by 80% in political participation. Canada ranks 21st out of 135 countries on all measures of gender equality and we fell by one position between 2011 and 2012. We are 20th out of 135 countries in the number of women compared to men who are in the labour force and a disappointing 35th in wage equality. Women still only earn 73% of what men do in Canada (adjusted for similar types of work).
Why electricity rates have to rise - and why little can be done to reduce the impacts
For 50 years BC Hydro has been the jewel of BC's Crown corporations. A source of pride and a foundational source for much of the province's prosperity, BC Hydro provides an array of benefits to British Columbians – from comparatively low electricity rates to significant revenues for government. The tremendous benefits BC Hydro delivers underscore what can happen when big infrastructure planning is done right. However, such legacy assets operating in a dynamic, growing region such as BC eventually must be upgraded and augmented by new sources of electricity to keep pace with economic development and other changes. Failure to do so will result in the erosion of legacy asset benefits and, over time, an unacceptable degradation of the system along with a growing reliance on imported electricity.
Employment up slightly in August but still waiting for a sustained improvement
The August employment report contained a bit of good news for BC, but not enough to materially change the generally muted labour market conditions in the province.
Working Age People Drive Inter-provincial Migration
After many years of a net inflow of people from other parts of Canada, BC is now in a period of net interprovincial outmigration. As the graph below depicts, net migration tends to cycle up and down, largely reflecting relative economic strength and job opportunities. This is the fourth period of negative interprovincial migration BC has experienced since 1970.
New Census and National Household Survey Highlight Key Demographic Trends in BC
Statistics Canada has started to release data drawn from its 2011 census and a major National Household Survey which the agency undertook at the same time. The results confirm what most people already know: the population is aging, with the front-end of the baby boom generation having reached 65 in 2011; Canada’s society is urbanizing, as more of us are living in large and mid-sized cities; there are more one-person households, reflecting the high incidence of divorce as well as longer life spans; and the workforce and population are becoming more multi-ethnic, as immigration continues to shape the nation’s demographic profile.
All of these national-level trends are certainly evident in British Columbia.
Exports, Skills and Incomes
Small open economies depend heavily on trade to stimulate growth, provide employment and sustain incomes. The development of competitive export-oriented industries is particularly important for small regional economies that, by definition, aren’t able to reap the economic advantages associated with having large internal/domestic markets. British Columbia is a good case in point.
The Skills to Pay the Bills
BC’s post secondary education system is a source of both pride and frustration; thinking about the system can prompt a sense of either optimism or pessimism about the future. On the positive side, BC has a great mix of world class research universities and regionally diverse colleges and technical institutes among today’s 25 publicly-funded post-secondary institutions. The University of BC is consistently ranked in the top 30 in the world (of over 17,000 universities), and BC consistently compares favourably among Canadian institutions on key metrics that measure the quality and effectiveness of its universities. Overall, our post-secondary system has many attractive and in some cases even world-class attributes.