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BC economy shrank in 2008 despite Liberal claims

New figures from Statistics Canada show the British Columbia economy shrank in 2008, performing below the national average. The drop came despite past assurances from government finance ministers that the economy was growing.

“In British Columbia, [Gross Domestic Product] fell 0.3 percent, its first decline since 1982,” said an April 27 newsletter from StatsCan. That was worse than most other provinces. Nationally the GDP grew an average of 0.5 percent.

The drop is in contrast with the picture painted by successive B.C. Liberal Party finance ministers. Presenting the 2008-2009 budget, her last before resigning, Carole Taylor said the government was forecasting 2.4 per cent growth for 2008.

The province would fare better in bad times than the United States and the rest of Canada, she said at the time.

And here's what current Finance Minister Colin Hansen had to say in Nov. 2008 when the province, we now know, was already in recession: “British Columbia, according to all the leading economists, can still anticipate positive economic growth through this very difficult time.”

The 2009-2010 budget, which Hansen presented in February, was based on a projected GDP drop of 0.9 percent.

Hansen did not return a call by posting time.

According to StatsCan, only Ontario had a greater drop in GDP than B.C. in 2008, with a shrinking of 0.4 percent. Saskatchewan's economy led growth, with a 4.4 percent surge.

“British Columbia's forestry products were hit by falling export demand,” noted StatsCan. “Logging production fell 18 percent, while wood products manufacturing declined 21 percent.” Personal spending was also down, it said.

The Tyee reported in March 2008 that despite signs the province was entering a recession the government was doing little to acknowledge the severity of the situation, let alone to address it.

Andrew MacLeod is The Tyee’s Legislative Bureau Chief in Victoria. Reach him here.

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