BC’s Jobs Economy Is Red Hot and Getting Hotter

British Columbia’s economy is on fire — the hottest in Canada by far and predicted to burn even brighter. So why are certain high-profile business representatives in the province so full of doom and gloom? Turn that frown upside down!

Statistics Canada’s latest monthly jobs report — officially called the Labour Force Survey — was released on May 10. A few highlights:

On a roll: B.C. in April racked up yet another positive job-creation period, a remarkable ninth over the last 10 months.

Canada’s star: Between June 2018 and the end of April 2019, Statistics Canada calculated that 96,000 British Columbians — on a seasonally-adjusted basis — had found new employment.

Across the country over the same 10-month period, the number of newly hired workers was counted at 395,600, which means B.C. since last summer has produced nearly one-quarter of all new jobs in Canada.

Looked at another way, consider that B.C. is home to approximately one in every eight Canadians, but since last June our provincial economy has created one in four of the country’s new jobs.

Two times higher. Simply, B.C.’s recent job-creation numbers over the last 10 months were about double the national average.

Nation’s only growth. And when Statistics Canada’s “unadjusted” jobs numbers — called “actual employment” — are considered, B.C.’s performance is even more stunning.

Looking again at the period between June 2018 and April 2019, the entire country of Canada lost — yes, lost — 126,400 jobs. Every single Canadian province, except one, recorded negative, actual job growth over the period.

B.C. was the exception, as the number of new, unadjusted jobs soared upward by 46,500.

Since last summer B.C.’s job market, and the overall economy, has been superb. And, incredibly, the forecast is for even better.

In March, economists with the Royal Bank of Canada predicted that B.C. in 2019 would lead the country in capital investment, which is expected to skyrocket over the previous period by a whopping 12.9 per cent.

Quebec and Ontario, second and third in projected capital-investment increases, are well behind at just 5.7 per cent and 3.8 per cent.

B.C.’s growth in real gross domestic product (GDP) also is expected to lead the country this year, with RBC’s economists forecasting a jump of 2.5 per cent. A similar hike of 2.5 per cent is projected for 2020.

Nominal GDP in B.C. in 2019 is anticipated to grow by 3.9 per cent, and then soar in 2020 to a sizzling 4.9 per cent.

And RBC’s economists are not alone in their rosy forecasts for the Pacific province. Their counterparts at the TD Bank believe B.C.’s nominal GDP will expand by an only slightly-less optimistic 3.4 and 4.2 per cent in 2019 and 2020, respectively — with both numbers well above the national average.

So, according to nearly all of the empirical data, along with analysis by non-partisan observers such as Statistics Canada and the country’s big banks, B.C.’s economy is in a very sweet spot.

Pick your own metaphor — “booming,” “fast-growing,” “firing on all cylinders” — B.C. is enjoying a period of significant economic expansion.

And the province’s business interests appear to be very unhappy about it. They don’t like it. Not at all.

In fact, they seem to be cheering for B.C. to fail.

“Our data shows there are storm clouds looming,” grumbled Val Litwin, a bare three months ago in response to B.C. Finance Minister Carole James’ annual budget and fiscal plan for 2019/20.

A cofounder of the Blo Blow Dry Bar and later a franchise manager with Nurse Next Door, Litwin three years ago became president and CEO of the B.C. Chamber of Commerce.

Notwithstanding the fact that the province was (and continues to be) in the midst of an economic expansion — and despite James’ “balanced” budget projecting a surplus (excluding the forecast allowance) of $774 million — Litwin complained that Premier John Horgan’s NDP government was “weighing down the backbone of B.C.’s economy.”

Hmmm. It might be worth noting that since the chamber head’s negative comments, B.C. has created another 17,400 new jobs. Oh well.

At about the same time that Litwin was bemoaning the province’s economic prospects, BCBusiness magazine featured a cover story with the provocative title “Is B.C. Losing Its Edge?”

Litwin popped up again in the piece with the dubious assertion that the province’s business community — whose members apparently all speak with a single voice — was saying: “Hey, you know what? It’s getting harder to do business here.”

Chiming in was Greg D’Avignon of the Business Council of B.C. who began his quoted remarks in the magazine article by asserting “I’m really bullish on B.C. and Canada.”

But he quickly pivoted to the negative with a grouchy declaration that the province’s economic “performance is, frankly, inflated, and is increasingly being eroded by some real concerning fundamental competitiveness issues.”

Shortly thereafter, D’Avignon’s Business Council colleague, Denise Mullen, was quoted at length in the April 4, 2019, issue of Business in Vancouver, with her own woeful prognostication of the province’s looming ruination. Here’s Mullen’s full quote (with emphasis added):

“A steadily escalating B.C. carbon tax, together with other government-determined cost pressures such as higher corporate tax rates and the new employer health tax as well as rising fees and regulatory costs, may lead to slightly lower greenhouse gas [GHG] emissions — not because of reductions in GHG intensity or stepped-up innovation by B.C. industries, but rather because of shut-in or avoided investment in industrial activities and a shift of investment dollars elsewhere.”

Yikes! In a nutshell, Mullen and the Business Council claim that policies introduced by Horgan, James and their NDP colleagues in government — a one-per cent increase in the corporate income tax, scheduled hikes in carbon-tax rates, and the abolition of Medical Services Plan premiums combined with a new Employer Health Tax — are destined to lead to a collapse in investment as precious capital flees B.C. for greener pastures elsewhere.

Of course, no examination of business interests and their view of the current government would be complete without a contribution from the Fraser Institute.

James’ budget and fiscal plan, analysts Jake Fuss and Milagros Palacios whined a bare three months ago, “did not acknowledge that B.C. is becoming an increasingly uncompetitive jurisdiction in which to do business.”

Total economic destruction hasn’t happened to B.C., yet — but just you wait! Oh, poor B.C.

Each and every time the New Democratic Party has taken the reins of power in B.C. — 1972-1975, 1991-2001, and 2017 to the present — interests in the province’s business community promptly have been transformed from enthusiastic cheerleaders to doom-and-gloom Chicken Littles with prophesies of imminent destruction.

One-time boosters of B.C.’s economic prospects suddenly become seers of doom.

It’s all so predictable — and, honestly, increasingly tiresome. Even more so when a wealth of empirical data points to the contrary.

Let’s take a look at just one indicator of B.C.’s current and booming economy: corporate profits.

One might think — given the over-heated rhetoric from Litwin, the Business Council, the Fraser Institute, et al. — that B.C.’s businesses were suffering enormous financial losses due to the misguided policies of the NDP government in Victoria.

But that’s clearly not the case. Indeed, corporate profits last year, in 2018, reached a record high (see page 85, ‘net operating surplus’) of more than $37.2 billion – yup, billion with a B.

To put that number in perspective, over the 2011 to 2017 period when Christy Clark was premier and the BC Liberals were in government, yearly profits racked up by B.C. companies averaged $27.2 billion.

Which means that under John Horgan and the NDP, annual corporate earnings in B.C. have been about $10 billion higher than they were under their predecessors.

Of course, B.C.’s economy is constantly is growing, so are corporate profits keeping up with rising GDP?

Under the Clark Liberals corporate profits averaged 11.2 per cent of nominal GDP. Since Horgan moved into the premier’s office in mid-2017, the comparable average is above 12.6 per cent.

The question, then, is why do B.C.’s business interests always, always complain and whine and moan when New Democratic Party MLAs are sitting on the government benches in the provincial legislature?

(A question for another day: Why does the province’s news media continue to give valuable space to the doom-and-gloomers when their punditry and predictions so often are manifestly wrong?)

Maybe it’s as simple as the fact that dogs bark and babies cry. It’s what they do.

Business representatives always bemoan a NDP administration in Victoria no matter the empirical facts regarding jobs, investment, corporate profits and so on — they just do.

Meanwhile, ordinary British Columbians are enjoying a booming economy, the province’s investment-growth is the highest in Canada, and business owners are raking in record profits.

And most important of all, a record number of British Columbians have jobs — and are taking home historically high wages and salaries.

Clearly, times are good in B.C., no matter the bleatings and lamentations from the province’s hand-wringing business representatives.