Panel data provided by Madison's Canadian Lumber Reporter.

The Vote is in: Prince George Gains with this New Government

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Now that the federal election is behind us, at least for a couple of hours, we can now look ahead to see what’s in store for Prince George in general and more specifically, Prince George’s business environment. 

One thing we can almost be sure of is that we are going to get more attention from the new federal government than we have for the past fifteen plus years. Having two sitting members of the elected party never hurts to garner attention, even from Ottawa. Of course we will have to share this with the rest of Western Canada, but at least this government will give more of a western focus to their policies and programs. This should translate into more initiatives and support for businesses located in our region, especially with our closeness to the large Asian market and our abundance of natural resources. 

Speaking of natural resources, both the Liberals and Conservatives talked about the pine beetle epidemic and even proposed some solutions, even if this only entailed throwing more money at the issue. Seeing as PM Harper actually took the time to tour the area, we can expect to quickly hear and see more from Ottawa on this issue. 

Another piece of positive news to this area should be the reduction in the GST and/or other tax reductions that both the Liberals and Conservatives were touting during the campaign. Neither party is likely to alienate the voters of Canada by voting against these tax cuts. Considering that there is a strong correlation between cuts in taxes and increases in spending, these cuts are good news for both the personal and business sides of the economy. Considering the surplus budgets we have seen with the Liberals and the need to become more competitive with our neighbours to the south, these tax cuts are essential to ensure businesses are allowed to operate on the same level as their global competitors. 

Prince George is also likely to see one of our elected members appointed to, at the very least, a junior ministry, or possibly a natural resource or energy portfolio. Due to the increased emphasis on oil and energy prices, the Prince George area certainly has to be in the running for government initiatives focused towards increasing and enhancing energy production and its accompanying revenue. Since one of our MPs resides in one of the most energy rich areas of Canada, it only makes sense for PM Harper to take advantage of this fact. Thus, between the pine beetle and the growing need for our natural resources, this area will continue to see growth and continued economic development. I don’t think our new PM wants to miss out on taking advantage of those opportunities. 

Of course not all the news is good. We will likely have another year or two of the country being in constant election mode until our new PM either proves himself, or doesn’t. This could be stretched out for a longer period if Martin resigns and the Liberals have to rebuild. No matter what happens this will have a negative impact on our economy. Unfortunately Canada needs to have a government which concentrates on ensuring we have a growing and prosperous economy, not just on surviving votes of confidence. So, once again, instead of making those tough decisions that are needed to move Canada to the forefront of the global marketplace, we instead will be faced with a government who becomes very proficient at tiptoeing around Ottawa. 

A final note on the Canadian economy is in order. While central Canada has very recently witnessed some bad economic news regarding the automobile industry, this will likely mean that the new government will be moving to boost manufacturing in that region. This will be compounded by the fact that we face another federal election within the next year or two. What this means is that we should see no significant changes to the Bank of Canada’s interest rate policies. This translates into stable economic growth for the next few years with controlled inflation and interest rates, which all add up to making Prince George a good place to do business for the next few years. 

-Myron Gordon owns TMSG Management Services Group, which provides management and financial services to growing businesses.


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