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The Province: Retailers on both sides of Canada-U.S. border feeling effects of falling loonie

[Excerpt] Ken Peacock, chief economist and vice-president at the Business Council of B.C., said retail sales in B.C. are currently very strong, with the total value of retail sales increasing by 8.3 per cent this May compared with the same month last year.

Peacock said a number of factors are contributing to the growth, but a decline in cross-border shopping is “definitely a factor in helping boost retail sales.”

Another factor is an increase in the number of Americans coming to B.C., although most people in Washington find it easier and cheaper to shop close to home. The influx of American visitors is also bolstering the tourism industry.

“The weaker loonie already has resulted and will continue to result in more Americans coming up here,” he said.

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Vancouver Sun, Don Cayo: Federal measures to goose the economy won't mean much to B.C.

[Excerpt]  And, as noted in the B.C. Business Council’s mid-year economic review and outlook, the provincial economy is by no means booming, but rather merely holding its own.

“As a small trade-oriented jurisdiction, the province is certainly not impervious to the economic headwinds, whether they blow globally or from within Canada,” says the review, which is being released Friday.

“Sluggish commodity prices and the oil-driven recession unfolding in Alberta and Newfoundland are affecting all regions of Canada and have prompted us to trim our growth B.C. outlook relative to expectations back in January. However, by Canadian standards British Columbia looks well-positioned for a decent economic performance over the next 18-24 months.”

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To be fair, today’s nationwide economic woes — technically a recession, although both the Harper government and Poloz are having trouble saying the word — are mild, at least for now, compared to then.

But the monetary policy response, which is Poloz’s bailiwick, has been puny, and he can’t strengthen it much even if conditions worsen. And a fiscal policy response, which Prime Minister Stephen Harper controls, has been and is likely to remain non-existent.

Poloz can’t be forceful because, in the words of business council vice-president Jock Finlayson, “He’s running out of ammunition.”

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790 KGMI News Talk: Stronger dollar, weaker loonie a mixed blessing

At about 77-cents, compared to the U.S. dollar at the end of trading yesterday, the Canadian dollar’s at its lowest point since 2004. While a stronger American buck means the availability of bargains for Whatcom County shoppers willing to cross the border, it also results in fewer Canadian wallets opening here.

According to a Business Council Of British Columbia study cited by The Bellingham Herald, there have been about 148,000 fewer single day visits to Whatcom County each month since March, compared to two years earlier.

The study notes that the fluctuating exchange rate has substantially less of an effect, however, on Canadians who spend two nights or more here.

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The Bellingham Herald: Canadian dollar drops to 77 cents U.S.

The Canadian dollar sank to its lowest level in nearly 11 years as the Bank of Canada cut a key interest rate to try to restart a sluggish economy.

The loonie was hovering around 77 cents compared to the U.S. dollar at the end of the trading session on Wednesday, July 15. It hit the lowest level for the Canadian dollar since since September 2004. It was a one-cent drop from the day before and came after the Bank of Canada announced it was lowering its benchmark overnight interest rate to 0.5 percent.

While a one-cent drop itself won’t have a big impact on cross-border traffic, the overall weaker loonie could lead to further declines in cross-border shopping in Whatcom County, said Paul Storer, a professor in the economics department at Western Washington University.

The response to the lower loonie shows up most in same-day trips to the U.S., according to a study released last month by the Business Council of British Columbia.  By March 2015, southbound same-day border trips were down 28 percent compared to two years earlier, according to the study, translating into 148,000 fewer short-duration trips each month.

The weaker Canadian dollar doesn’t seem to have as much impact yet on overnight travel to the U.S., according to the report. in March 2015, the number of B.C. vehicles making trips in the U.S. that last more than two nights was down just 4 percent compared to two years earlier. 

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Business in Vancouver Editorial: Organized labour needs reorganization

The union business is under duress in Canada and elsewhere, and that’s cause for concern on both sides of the labour-management table.

According to a recent Business Council of British Columbia (BCBC) report, union membership is shrinking in most Western economies as manufacturing jobs give way to those in the service sector.

In Canada, where the percentage of workers who are union members has been relatively stable, numbers are now dropping as upcoming generations of workers, many of whom have virtually no cultural connection to the labour movement, see less need for representation by a union. BCBC numbers show unionization in the country had dropped to less than 29% in 2014 from 37.6% in 1981.

That continued weakening of organized labour’s leverage in the marketplace threatens to yield a corresponding erosion in worker wages and benefits, especially at the lower end of the job market.

But the other concern raised by the BCBC report, especially for taxpayers and private-sector companies that compete with government for workers or clients, is the growing concentration of unionization in the public sector.

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BC Business: Is BC's Treaty Process Dead?

[Excerpt] First Nations involved in the treaty process are not exactly enamoured with its current form either. Member chiefs of B.C.’s First Nations Summit, including David Michael Harry, acknowledge that the treaty process has been broken for years. In part, they attribute bogged-down negotiations to the fact that federal and provincial ministers have doled out very limited mandates to government negotiators. At a March conference in Vancouver, one seasoned negotiator reminisced about the time when then-prime minister Jean Chrétien flew to northern B.C. to hammer out final details of the historic Nisga’a treaty himself. 

B.C.’s business community—with several major resources projects, from LNG terminals to coal mines, hanging in the balance—also wants a more expedient and effective process to deal with outstanding land claims. Greg D’Avignon, president of the B.C. Business Council, acknowledges that the treaty process established a common table for all sides to come together and discuss issues.

“We need those kinds of forums to continue to advance reconciliation, whether it’s the treaty commission or some vestige of it.”

But he points to a best practices manual for revenue-sharing agreements, promoted by Campbell and ramped up by Clark, as the real forum where deals are done.

Since 2006, the province has entered 200 revenue-sharing agreements with First Nations; that’s in addition to 500 direct agreements between private companies—from BC Hydro to Imperial Metals—and native bands.  

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Globe and Mail, Jeffrey Simpson: Where’s the debate on our dire fiscal future?

What will the future look like in British Columbia and the rest of Canada? There are a host of imponderables, except one.

British Columbia’s population, like the country’s, will be much older. Aging will be the dominant underlying factor here and across Canada, its impact unfolding incrementally but irreversibly.

Aging will produce one change that no political party wants to tackle, certainly not in the federal campaign now under way: Governments of whatever stripe will need more money but will find their revenues shrinking.

B.C.’s population, for example, now has 31 people 65 years old or over for every 100 working-age persons. In a decade, the ratio will be 41 to 100. Ten years later, in 2035, the ratio will be 48 to 100, according to a recent paper from the Business Council of British Columbia’s policy analysts Jock Finlayson and Ken Peacock.

Put matters another way. The number of people in B.C. over 65 is growing at four times the rate of the number of people 25 to 64 years of age.

Fewer people working within the overall population means – at current rates of taxation – less revenue for government. Argue Messrs. Finlayson and Peacock: “Absent a major windfall from new resource development, demographic projections suggest that the province may need to explore ways to make the tax system less vulnerable to ‘revenue erosion’ linked to population aging and a slowdown in the growth of the work force.”

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Business in Vancouver: Moms go to work — and pay more taxes — when child care is affordable: report

[Excerpt] Jock Finlayson, vice-president and chief policy officer at the Business Council of British Columbia, was skeptical about how much Quebec’s child care program has boosted the province’s economy, given Quebec’s high public debt, low growth in GDP and incomes and lower levels of business investment compared with Canada and the western provinces. He noted that social programs such as universal daycare and comparatively low university tuition have resulted in high taxes.

A provincial child care program funded by tax increases would be much less risky if the federal government contributed a large share of the funding, Finlayson said.

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Globe and Mail: Living wage won't fix Vancouver's income inequality but it's a start

[Excerpt] This phenomenon prompts us to consider one of the many contentious aspects of the living wage/minimum wage debate: Is it in the best interests of the greater good?

Jock Finlayson, executive vice-president of the Business Council of British Columbia and one of the top economists in the country, says he sympathizes with what proponents of a living wage are trying to achieve.

“[However] I think it is problematic for a taxpayer-funded body, such as the City of Vancouver, to pledge to eschew future efforts to identify and contract for outside services/goods at the lowest cost to taxpayers,” said Mr. Finlayson in an interview.

“Stated bluntly: Who is looking after the interests of Vancouver taxpayers in this case?”

As well, if the City of Vancouver chooses, as a matter of policy, to impose higher costs on itself in terms of the future expenses procuring goods and services, on what basis can it then turn to governments in Victoria and Ottawa and plead poverty as the city is prone to do, Mr. Finlayson wonders.

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BC Business: Sink or Swim: an overview of 2015's Top 100

[Excerpt] But does it even matter if the province isn’t growing a new crop of companies to follow in the footsteps of its largest firms? Ken Peacock, chief economist with the Business Council of B.C., thinks it does. “It’s one thing having ICBC and WorkSafe doing well and being profitable, but you want a vibrant, robust export sector over the long term to grow wealth and prosperity in B.C.,” he says. “When a company starts exporting, it can take advantage of economies of scale and have access to much larger markets. It tends to be more productive, generally, because of the discipline of having to compete in the international marketplace.”

That’s not only good for the company, Peacock says—it’s good for workers, because better revenues often translate into better wages.

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Times Colonist: Dollar drop cuts border trips, Canadians spend more at home

The drop in the value of the Canadian dollar has led to 148,000 fewer same-day trips to the United States from British Columbia over the past two years, a 28 per cent decrease, according to a report from the Business Council of British Columbia.

Overall, the drop in visits to the U.S. has led consumers to stay at home in B.C., where retail spending has increased by about $500 million annually, said Ken Peacock, chief economist for the BCBC.

“Consumers, as expected, have responded to the devaluation in the Canadian dollar and are not making as many trips across the border to make consumer purchases,” he said.

Retail sales increased by 2.5 per cent in 2013 and 5.6 per cent in 2014. While part of the increase has to do with economic growth in B.C., the decline in the number of British Columbians crossing the border to spend money in the U.S. has also been a factor, Peacock said. In the past two years, cross-border trips lasting two or more days have dropped 23 per cent to about 66,000 per month from 86,000.

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BC Business: Cross-border shopping is way down in B.C.: report

Fewer B.C.ers are heading south for deals, although that's no surprise.

"The fall in the value of the Canadian dollar, unsurprisingly, has led to a decline in the number of British Columbians making short-duration visits to the United States," says a new report from the Business Council of B.C., which cites a whopping 28 per cent drop in same-day trips to the U.S. among British Columbians since early 2013, when the dollar was high. 

Longer overnight trips are down substantially too: 23 per cent. But, as the report notes, there are at least two winners here: local retailers, which now have less competition from the states, and gas stations.

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24 Hours: Lower Canadian dollar could benefit B.C.

A lower Canadian dollar appears to be beneficial for the B.C. economy, according to a new study.

Ken Peacock, author of the Business Council of B.C. report published Tuesday, said a higher dollar means people are keeping their spending local.

“It makes imports more expensive, if you’re talking about outside cross-border shopping. That makes inflation a little higher,” he said.

And people used to cheaper groceries and gas would likely lose those savings, which takes away from extra money they have to spend locally.

But those negatives would struggle to stand out in the face of the $1.2 billion British Columbians are estimated to spend in the U.S. over a single year.

That billion-dollar figure was calculated based on short-term trips to the U.S. from 2009 to 2012 by the Business Council. The latest report showed short-term trips in March 2015 were 28% down from the 2013 high — a loss of about 148,000 trips each month. Longer term, two-day or more trips also fell by about 20,000 per month.

According to the business council, the rate of growth for retail sales in B.C. has more than doubled since the dollar’s fall.

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CBC: Cross-border shopping down 28 % since 2013: B.C. report

Cross-border shopping trips from B.C. to the U.S. are down 28 per cent since a peak in early 2013, according to a new report from the Business Council of B.C.

 In early 2013, the Canadian dollar was near parity with the U.S. dollar, but now trades at about 81 cents US.

"The fall in the value of the Canadian dollar, unsurprisingly, has led to a decline in the number of British Columbians making short-duration visits to the United States," stated the report released Tuesday.

The result is about 148,000 fewer same-day cross-border trips each month from B.C. to Washington state, the report found.

Over the same period, retail spending in B.C. has picked up considerably, which the report attributed to several factors, including more British Columbians buying goods — including gasoline — at home.

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Vancouver Sun: Cross-border trips from B.C. down 28 per cent due to dollar drop

The drop in the value of the dollar has led to 148,000 fewer same-day trips to the U.S. from B.C. in the past two years, a 28 per cent decrease, according to a report from the Business Council of British Columbia.

Overall, the drop in visits to the U.S. has led consumers to stay at home in B.C. where retail spending has increased by about $500 million annually, said Ken Peacock, chief economist for the BCBC. "Consumers as expected have responded to the devaluation in the Canadian dollar and are not making as many trips across the border to make consumer purchases," he said in a phone interview.

Retail sales increased by 2.5 per cent in 2013 and 5.6 per cent in 2014. While part of the increase has to do with economic growth in B.C., the decline in the number of British Columbians crossing the border to spend money in the U.S. has also been a factor, Peacock said. In the past two years, cross-border trips lasting two or more days have dropped 23 per cent to about 66,000 per month from 86,000.

Part of the retail sales increase has included a 10 per cent rise in the volume of gasoline sales in B.C. Meanwhile, Trans-Link reported an increase of $2.3 million or 0.7 per cent in fuel tax revenues in 2014 compared with 2013, according to TransLink's 2014 annual report.

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Globe and Mail: Europe’s struggle with underground economy offers lesson for Canada

[Excerpt]  According to a government report last year, tax evasion costs Italy around €91-billion ($127-billion) annually. It’s been estimated that Italy’s “shadow economy” relative to GDP is 21 per cent; that’s just behind Greece at 23 per cent. It’s a problem that plagues many European countries; one that they are only starting to get serious about addressing now.

It’s a subject that the Business Council of British Columbia has been giving some thought to as well.

According to a recent report issued by the council, the size of the underground economy in Canada falls in the range of 5 per cent to 8 per cent of GDP. However, the study suggested that the issue of “unobserved, unreported and untaxed economic activity” was more prevalent in B.C. than the country as a whole.

The council suggested that the reason this was the case was because British Columbia was more heavily weighted toward small, unincorporated businesses and the self-employed, where underground activities are more likely to occur. As well, the construction industry is proportionately larger in B.C. and as a business is historically prone to hide economic activity. Finally, B.C. has a thriving illegal drug industry that generates billions of dollars in untaxed revenue each year.

“Add it all up and it would not be surprising if the overall UE [underground economy] in British Columbia is equivalent to 10 per cent or more of the province’s reported GDP,” said the report.

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Victoria News: Grey power puts crimp in health-care system

Look around folks. There are more of us than there is of them. Or so it seems when I’m elbowing my way to the Geritol section of the pharmacy.

Is it finally the dawn of Grey Power? Or are more of us being let out unsupervised? More of the latter, I fear.

In fact, the ranks of B.C. seniors aged 65 and over are growing four times faster than the ranks of working-aged citizens age 25 to 64.

Business Council of B.C. chief policy officer Jock Finlayson calls that “an extraordinary and unprecedented development.” 

A BCBC report indicates the province currently has about 31 people, 65 and over, for every 100 working-aged persons. In 10 years that climbs to 41 seniors for every 100 working age BCers.

In 15 years on Vancouver Island the numbers look like this: Victoria -- 57 seniors per 100 working age citizens (37 now); Comox Valley – 61 per 100 (45 now); Cowichan Valley – 64 per 100 (42 now). In the Kootenay-Boundary country the ratio rises to 77 per 100 (45 now) and on the Sunshine Coast it is a staggering 80 per 100 (52 now).

Finlayson says this older population will put additional pressure on public expenditures while the capacity of the government to raise revenue is diminished with a smaller fraction of the citizenry working.

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Vancouver Sun, Barbara Yaffe: BC's underground economy likely leads all other provinces

Have you ever paid a plumber under the table? Purchased pot from one of Vancouver’s proliferating marijuana dispensaries? Neglected to report rental income from a basement suite?

Such activities typically sidestep taxation, contributing to an underground economy the Business Council of B.C. believes is especially active in the province.

“We believe that unobserved, unreported and untaxed economic activity is more prevalent in British Columbia than in the country as a whole,” say council chief policy officer Jock Finlayson and chief economist Ken Peacock.

They contend B.C.’s underground economy could be equivalent to 10 per cent or more of reported GDP.

It is not so much that British Columbians are more dishonest or tax-averse than other Canadians. They just have greater opportunity to cheat.

“Our economy is heavily skewed toward self-employment and unincorporated small business, where unreported transactions are more common,” according to a report issued recently by the council.

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Vancouver Sun: A nation of free traders? Not when other provinces are involved

[Excerpt} Ken Peacock, vice-president and chief economist of the B.C. Business Council, says the B.C.-Alberta deal’s biggest impact is probably the way it facilitates labour mobility, recognizing credentials of 130 to 140 professions or trades regardless of which province certified them.

This no doubt benefited Alberta when its oil-fired economy was running flat out, and now that B.C. is leading the economic pack, it will benefit us. Not to mention that it’s not much loss to the weaker economy when, as is often the case, workers who leave would otherwise be unemployed.

But it’s an embarrassment as well as an economic encumbrance to have so many vestiges of protectionism linger internally in an era when Ottawa is making such progress in opening up international trade. The CFIB members are right: it’s time for the premiers to get on with it.

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Global News: BC's latest employment numbers provide cautious dose of optimism

Canada’s hobbled economy received an encouraging jolt Friday as the labour market showed a surge of 58,900 net jobs last month, many of which appeared in a sector considered key to the country’s rebound: factories.

The job-growth figures, released by Statistics Canada, provided a cautious dose of optimism the economy will begin chugging again after reversing in the first three months of 2015.

In B.C., the economy gained 30,600 positions, with 2,600 of the gigs in manufacturing.

“Trendlines show pretty weak job growth, frankly, for Canada and for B.C. looking over, say, three, six or nine months,” said Jock Finlayson of the Business Council of B.C. “Nonetheless, last month’s numbers are certainly hopeful. B.C., though, will do better than Canada, for sure, in terms of economic performance this year and next year.”

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