Taking Stock of B.C.’s Economic Performance
by Dermod Travis,
‘Tis the season of lists and stocking stuffers of economic forecasts.
But instead of soothsaying over what could happen in 2016, a look back at B.C.’s economic performance over the past few years might be more illuminating.
Deciphering economic forecasts is a murky task anyways, not that interpreting statistics is any less risky.
Consider the reaction of natural gas minister Rich Coleman to a recent report by the Canadian Centre for Policy Alternatives: “There’s two things I don’t believe any more, polls, and anything written by the centre.”
So to avoid that my stat is better than your stat taunt, automatic default to some of the B.C. government’s preferred statistical sources.
Coleman shouldn’t take issue with Statistics Canada, RBC Economics or BC Stats served straight up. Particularly the latter, citizens’ services minister Amrik Virk is in charge of that one.
Take a gander at the government’s economic report cards and one thing becomes readily apparent: an almost virtual absence of inter-provincial comparisons.
Good reason for that, compared to Alberta, Ontario and Quebec, B.C. doesn’t always stack up so well when it comes to job creation, economic expansion, exports or investments.
When Christy Clark was sworn in as premier, the employment numbers she inherited from former premier Gordon Campbell would have been for February 2011.
On the jobs front, that’s her baseline. The latest numbers from Statistics Canada are for November 2015, 58 months in all.
In that time, B.C. has created 82,900 new jobs. Alberta created 222,000, Ontario (245,600), and Quebec (131,900).
It works out to about 17,150 jobs on average per year, a little more than half the number (33,800) created annually between 2001 and 2010.
While 2.34 million people are working in the province, more than one in five (21.5 per cent) are holding down part-time jobs, the highest rate among the four provinces.
In 2011, B.C.’s unemployment rate was 8.8 per cent. Last month, it was 6.2 per cent, the lowest of the four.
But that rate is camouflaging something worrisome: the size of the province’s labour force is practically stagnant.
Between 2011 and 2015, it grew by 0.8 per cent or 20,200 workers. In Alberta, it went up by 12.3 per cent, Ontario (2.4), and Quebec (3.1).
And the participation rate – the pool of potential labour – has been steadily falling, counter to the government’s forecast in 2009, when it predicted the rate would continue to rise from the 66.6 per cent set in 2008.
Last month, it was 64.1 per cent, lower than it was 35 years ago. In Alberta, it was 72.9 per cent, Ontario (65.1) and Quebec (64.5).
To take a look at broader economic indicators, it’s all RBC Economics and BC Stats.
Between 2010 and 2014, the provincial economy (GDP) expanded by $34.1 billion. Quebec’s economy grew by $50.8 billion, Ontario ($109.5 billion) and Alberta ($112.3 billion).
Since it’s not an entirely fair comparison – as the four economies vary in size and composition – consider that B.C.’s share of Canada’s GDP was 12.6 per cent in 2010 and 12.0 per cent in 2014.
The value of B.C. exports in 2010 was $28.64 billion and $35.77 billion in 2014.
Not bad, until you learn that it was $34.16 billion in 2005 .
In 2010, B.C. was in ninth place among the provinces for international exports as a percentage of GDP with 24.9 per cent.
By 2014, we moved up to eighth place, just ahead of P.E.I. and Nova Scotia. However, the value of B.C. exports fell to 22.4 per cent of GDP.
In Alberta, the rate was 34.9 per cent, Ontario (33.6) and Quebec (27.7).
The government’s list of potential investments – valued at $350.1 billion – reads more like a Christmas wish list than an inventory of shovel ready projects.
Best to let the Business Council of B.C. handle this one: “Digging into the details and reviewing the factors behind some of the biggest proposed projects suggest that the inventory is inflated by a number of projects that ultimately may not proceed.”
The Olympics would be a dull affair if medals were only awarded for personal bests.
Same could be said for judging B.C.’s economic performance: provincial bests are fine, but the real test is how we perform against others.
-Dermod Travis is the executive director of IntegrityBC.
Comments
Sure the overall average is not the best. But for 2015, its been a stella year compared to most provinces.
As far as I am concerned BC has weathered the year very well forestry, mining and manufacturing all have continued to do well and even though oil took a big tumble the northern eastern part of the province has continued to perform well because they focused more on sour gas wells and most people stayed employed for most of the year
So it’s not perfect but compared to the other 3 provinces I think BC has done quite well. If anything our biggest downfall was not attracting trades because let’s face it nobody can afford to pay what trades are making in Alberta hell of a good way to go bankrupt real quick
Dearth, Attracting trades for what? The $350. billion worth of investments that might happen. The tradespeople at Site C are from Alberta.
Canada still a milk cow. Feed in the west and milked in Ontario and Quebec. It has not changed in years. Better take a re-take of Alberta they are in serious trouble
Think Alberta is in trouble? I would have to say BC is in trouble. Many people from BC were working in Alberta.
I have a few friends who recently quit a very good paying job to one paying a bit more and now they are laid off and sitting at home waiting for oil to bounce back..these guys where operators though.. Tradesmen are weathering the storm much better as of right now.
It would be nice to see the list of employees working at site C and where they are from, doubt we will see it though.
Lots of toys for sale in Calgary and Edmonton according to my uncle who lives in Calgary.. He says it a very depressed city right now. Seems like lots expected the dough to keep rolling in and didn’t prepare for this drop in oil.
We still have the coal mines in Tumbler Ridge (Walter Energy) closed down, plus Thompson Creek, Endako Mines. The Pulp Mill in Chetwyn that shut down in Sept. was supposed to start up in Jan 2016, however I haven’t heard anything about a start up yet. So lots of people in BC still out of work.
Exports through Port of Prince Rupert are down.
Export of loaded containers down YTD 3% over 2014. (Imports are up)
Export of grain products down YTD down 4.6%
Export of coal products down 39.3%.
So not much happening. Export of lumber to China down, while exports to the USA are up.
Governments don’t create jobs, unless they do so within the government itself, and we know they’re not really doing that. They are supposed to create policy that will allow for business to be successful here and then let nature take its course.
Well, the BC Liberal government hasn’t really done squat on policy for a long time, except maybe to raise the minimum wage and we have still had the highest child poverty rate in Canada for ten years running under BC Liberal rule. That will have social implications that will stretch for generations.
There is the HST change, whereby the BC Liberals tried to transfer $2billion in sales tax from business to consumers. We all know how that story ended. They had to reverse course. Did they take the opportunity that provided to fix the cascading effects of PST and in doing so increase efficiency and investment in BC, like they preached with the introduction of the HST. No.
Then they handed over control of the environmental review process to the federal government. That too proved unsuccessful though as the move, combined with the northern gateway pipeline plan, created a significant amount of public unrest. So, to save face on that one, they came up with their own, impossible to hurdle, conditions of their own. That combined with a couple of mine proposals being turned down and the environmental threat posed by the tailings pond breach to the South of us has had a chilling effect on resource extraction here.
LNG. Enough said.
The BC Liberals are buffoons that are long overdue being replaced. Problem is we don’t have a viable alternative. Here is hoping the Conservative Party gets its act together in time for the next provincial election, because I’m personally tired of the clown act.
Palopu the pulp mill in Chetwynd is an unusual case as it uses specialty wood namely birch and popular so when there is a demand for the product they make the mill runs when there is no demand the mill slows down or shuts down it is not uncommon for that mill to shut down several times a year but it makes a great news story for the masses who don’t know better
Tumbler ridge after the big mines shut down it struggled to regain customers the coal mined there is not as good quality as elsewhere and getting buyers for lower quality coal is a struggle so the mines that operate there now have shut down several times in the past 3 years due to market conditions
Joe Blow:- “The BC Liberals are buffoons that are long overdue being replaced. Problem is we don’t have a viable alternative. Here is hoping the Conservative Party gets its act together in time for the next provincial election, because I’m personally tired of the clown act.”
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It would be nice to think that the BC Conservative Party HAD an act to get together in the time remaining before the next BC election. So far there’s not too much indication it has. I think the big issue that effects everyone in BC isn’t anything shown in the statistics people like Dermod Travis use to try to indicate the present BC government’s shortcomings. It’s that our overall COST of living continues to rise faster than any increases in our average standard of living. If we were truly progressing economically we should be experiencing the reverse of this. Accordingly, it does little good for any government to tout how many jobs have been created under its watch, or how much exports have risen, etc., etc., if most of us here find we’re working harder and longer and getting ever the less for it in terms of the incomes we are paid. Incomes which may well be rising in their ‘dollar’ amount but are shrinking faster in terms of what they’ll actually purchase. If the Conservatives, or any other Party, for that matter, would simply recognise this FACT, perhaps they could look at ways to deal with it. But so far NONE do.
BC Conservative Party has how many seats in the house right now?
It is basically on par with the Green Party and the other independents, not sure how they could make their way to a governing party from that. The Greens had more votes BC wide than the Conservatives did plus managed to get one member actually voted in. After their leader resigned they were able to get Dr Weaver (his doctorate being climate science) who actually won a seat into the house as leader of the party. Although he is listed as “independent” for party on the actual legislative list. Sadly the Conservatives are currently sitting on the porch swing outside the Legislature.
Travis writes: “Deciphering economic forecasts is a murky task”
Reading his disjointed condemnation, he is not capable of making past economic performances any less murky.
The man is all over the place. He provides no background of the nature of the economical roles the 10 provinces of the country have played in the past – the provincial migrations as well as the international migrations to jobs and back when jobs dry up; the long term growths as well as the short term growths; the outside influences of the crash of the country’s major trade partner to the south; the new increase in the price of oil as well as the recent crash of the price of that as well as other commodities.
ALL western provinces- BC, Alberta and Saskatchewan – are reliant on natural resources to the extent that they impact the GDP, the resulting exports, as well as the associated employment rates. Wood fibre, gas, oil, coal, metal ore, and potash all have various peaks and valleys. They sometimes coincide and sometimes offset each other.
Take, for example, the Alberta unemployment stats.
The provincial unemployment rates in Canada were as follows in Nov. 2014 and in Oct. 2015. The final figure is the change over the 12-month period.
SK 3.7% – 5.5% – 48.65%
AB 4.7% – 7.0% – 48.94%
MB 5.4% – 6.1% – 12.96%
BC 5.5% – 6.2% – 12.73%
ON 7.0% – 6.9% – -1.43%
QC 7.5% – 7.5% – 0.00%
NS 8.4% – 8.6% – 2.38%
NB 10.0% – 8.7% – -13.00%
PE 11.1% – 10.4% – -6.31%
NL 11.8% – 13.0% – 10.17%
Both Saskatchewan and Alberta had an incredible increase in the unemployment rate which shows the dependence of the provinces on a single industry. In fact, the provinces are akin to single industry towns which have not been able to diversify their economies.
When one researches past economic performance with the claim of objectivity, one needs to do a better job than Travis has shown he is capable of. Looking into the other indicators over longer as well as more inactive time periods will show the same biases in his review.
References:
economicdashboard.albertacanada.com/Unemployment
statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/lfss01c-eng.htm
In October 2008 the unemployment rate in Alberta was 3.3%. By May 2009 it was 7.0% with a high of 7.3% by the end of that year. It gradually dropped back down to 4.3% by August 2012. Now, over a 7 year period, it is back up to 7% and will likely climb higher, even with people leaving the province to find their way back home to BC, as well as Central Canada, the Maritimes and the USA.
One could look at this in a whole different way if one were to look at it from the Canadian rather than the Albertan perspective.
We are continuing to see the phenomenon of Alberta as well as the western part of Saskatchewan which has created an inflated petro dollar for the last 5 to 10 years. That has repercussions to international trade in the manufacturing sectors in other parts of Canada. Now we have to learn once more how to be productive in the same fashion that most of the other western industrialized countries have had to compete.
Speaking recently with a USA based geotechnical professional working in the Lloydminster region, there is a push to locate and extract the shale oil before other marketable energy sources are developed and further energy efficiencies are incorporated. They are looking at 30 to 50 year windows. At the moment they are finding that they cannot pipe the raw product in any direction from the landlocked provinces so they are looking at options of building refineries.
A 4 part series from Fort McMurray
bnn.ca/News/2015/11/13/Sneak-Preview-Canadas-economy-hangs-in-the-balance-amid-Fort-Macs-fall.aspx
Now they are asking for help from the rest of Canada.
How about Alberta first?
They created the Petro Dollar. They did not think about the effect of a boom region/province on the rest of the country. Easy money has really not helped at all, other than that part of the country. They have 4 lane highways to nowhere built over short periods of time. They were supposed to have money stocked up for a rainy day fund. Well, here is the rainy day and they have no money left. In fact, the province in in greater debt than before.
bnn.ca/News/2015/11/13/Sneak-Preview-Canadas-economy-hangs-in-the-balance-amid-Fort-Macs-fall.aspx
Part 2 bnn.ca/News/2015/11/17/Oils-collapse-drags-Fort-McMurrays-housing-market-down-with-it-.aspx
Part 3 bnn.ca/News/2015/11/18/Oil-sands-slowdown-forces-Fort-Mac-to-reassess-growth-plans-.aspx
Part 4 bnn.ca/News/2015/11/18/We-are-not-the-devil-Fort-McMurray-calls-for-support-from-the-rest-of-Canada.aspx
Part 5 bnn.ca/News/2015/11/20/Fort-McMurray-holds-out-hope-for-a-bounce-back-after-oils-crash.aspx
A less extreme version of PG after the turn around in 1981. Big dreams in the 1970s with projections of 200,000 population by the early 2000.
gopg2015:-“They created the Petro Dollar. They did not think about the effect of a boom region/province on the rest of the country. Easy money has really not helped at all, other than that part of the country.”
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I disagree. A lot of people from other parts of Canada commuted to work in the oil-patch. And the spending of their paycheques, largely back in the communities from which they came, assisted the economies in those communities greatly. In our business, I have (had) many customers whose incomes were derived from employment in Fort Mac and the surrounding area.
Also, the rise in the value of the Canadian dollar relative to its US counterpart made a great deal of American manufactured equipment, machinery that has no counterpart made in Canada, cheaper for Canadian companies to buy. Whether new, or used. And used equipment from major companies that was still perfectly good equipment for smaller businesses tended to stay in Canada. Now, with the current difference in the exchange rate, much of that equipment disappears back into the US.
In addition, why should we take 70 cents on the dollar for our resources or manufactures? This is shorting ourselves simply to try to provide employment.
gopg2015:-“They were supposed to have money stocked up for a rainy day fund. Well, here is the rainy day and they have no money left.”
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That’s largely because the current financial system is not fully ‘self-liquidating’, and becomes ever the less so over time. Money is really a ‘flow’, not a ‘stock’. When you ‘stock it up’, as in the sense a government might, you prevent repayment of the loans from which it originated. And that repayment can then only occur by there being an increase in loans overall. That’s not going to be long sustainable. For a variety of related reasons. In the end, in terms of what it will still buy, your government’s ‘stock’ is likely to prove worth way less.
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