Opinion: You may be surprised by which of B.C.’s economic sectors show the most promise.
B.C. has been fortunate. Stunning mountains. Temperate weather. Natural resources. Outdoor lifestyles. Peace and good order. People from around the world eager to be here.
It’s as if we have become entitled to that sense of abundance, thinking neither ourselves nor our leaders need to make trade-offs to ensure economic well-being for all.
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Alas, that attitude is leading to B.C. falling behind. B.C. now ranks a disturbing 48th out of the 60 states and provinces of North America in terms of gross domestic product per capita, one of the best measures of a standard of living. The province’s economic pie is shrinking.
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B.C. has been infected by the national fiscal disease. The Bank of Canada’s Carolyn Rogers warned last week of an “emergency.” Productivity is down to where it was seven years ago. Except for Saskatchewan and Alberta, Canada is not doing well compared to the U.S.
David Williams, senior policy analyst for the Business Council of B.C., says the B.C. government’s own projections for annual GDP per capita come in at $53,500 for 2027 — which is $300 below 2019. With its latest spend-and-borrow budget from February, Williams says, the province faces an “eight-year recession.”
University of Calgary economist Trevor Tombe, co-director of the Finances of the Nation website, says B.C.’s economy is doing unusually badly, given we’re considered a “rich” province. The private sector is in retreat.
B.C. needs to either “immediately” raise taxes or cut spending, Tombe says, to bring its debt under control. If the private sector does not produce more revenue, he calculates Victoria needs to double its personal income tax or triple its sales tax for long into the future.
“There has been almost no private sector job growth in B.C. since 2019,” says Williams. The only sector where jobs are significantly expanding in Canada and B.C. is in government. The private sector is stagnant or worse, making things especially bleak for young people.
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Where does hope lie for real economic prosperity in B.C.?
Urban British Columbians tend to put faith in high technology, public services and the cool film industry as the foundations of a cleaner economic future. But what about the resource sector — forestry, mining, oil and gas, agriculture and fishing?
Politicians have also been lulled into self-satisfaction by the out-sized housing sector, which has expanded to respond to about 100,000 newcomers each year arriving as a result of international migration. Williams questions the way Canada, particularly B.C., depends on “record immigration levels to turbocharge population growth and housing demand.”
Don Wright, who retired as head of B.C.’s civil service in 2020, also believes B.C.’s economy leans too heavily on new arrivals to “buy real estate and support consumption with income earned elsewhere.” It creates the illusion of a healthy economy. But it has elevated house prices to among the highest in the world. And it’s not sustainable.
Along with realigning migration levels with the province’s “absorptive capacities,” Williams says B.C. has to re-examine taxation rates. “B.C. has the fourth highest top personal tax rate among the 60 U.S. states and Canadian provinces.” That, he says, scares away high-skill workers and entrepreneurs.
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Here’s Wright’s surprising rundown on the promise and pitfalls of various B.C. sectors:
Film industry
“Everybody loves Hollywood,” says Wright. But B.C.’s film industry, while employing tens of thousands of people, is so heavily subsidized that it ends up not producing much net revenue per employee for government coffers.
Tourism
A tourism industry adds economic diversity, says Wright. “But it tends to offer low wages and it also tends to be fairly seasonal.” An average salary in accommodation and food services is one third that of a salary in mining, forestry, and oil and gas.
High tech
This much-talked-about sector has promise, but there is a particular challenge facing B.C. and the rest of Canada. Although there are many excellent startups, it is often difficult for them to reach world scale while staying anchored here. Young tech companies are often acquired by larger foreign-based companies, which can mean their valuable intangible assets — intellectual property and trade secrets — will be owned and generate returns to other jurisdictions.
Manufacturing
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This supposedly boring industry is more important than people think, says Wright. Focused primarily in the Fraser Valley, it’s producing innovative products, including clean technology, and decent wages.
‘Gateway’ sector
Unrecognized by most, airports, marine ports and railroads account for about 14 per cent of B.C’s economic base, according to analysis by the B.C. government. “They generate quite a lot of jobs and many of them are quite high paying,” says Wright.
Resources
This has been and remains the heavy hitter for B.C., like it or not. Residents of the province, especially in the Interior, are suffering because the resource sector is not getting the backing they need, say Williams and Wright. Resources still account for 51 per cent of B.C.’s economic base.
While forestry, mining, oil and gas, and fishing are often targeted by environmentalists, regulators and city dwellers, Williams and Wright note they put far more money into tax coffers per employee than the film industry, tourism and even high tech.
The B.C. government received on average $50,000 to $60,000 in net revenue per employee in the energy and forestry sectors in the 2019-20 fiscal year. That compares to just $16,000 per tourism employee and $9,000 per film industry employee.
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“We’ve got to stop demonizing these industries,” says Wright. “They still have the potential to contribute disproportionately to the standard of living of British Columbians.”
Furthermore, B.C.’s resource sector can be a key to First Nations reconciliation. Natural resources industries will continue to be the dominant economic base for most regions outside the urbanized areas in the southwest corner of the province.
Virtually any new major resource development will involve a substantial partnership with the First Nations in the particular region where that development occurs,” says Wright.
Those who might oppose such projects “will essentially be telling First Nations in remote parts of the province that they don’t have the right to a higher standard of living,” says Wright. “I don’t think that’s going to be tenable.”
It’s time for British Columbians to think more realistically about the economy in order to achieve better standards of living for more people.
We have little to lose but our naivete.
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Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
The Canadian Press. All rights reserved.
TORONTO – Canada’s main stock index was up more than 250 points in late-morning trading, led by strength in the base metal and technology sectors, while U.S. stock markets also charged higher.
The S&P/TSX composite index was up 254.62 points at 23,847.22.
In New York, the Dow Jones industrial average was up 432.77 points at 41,935.87. The S&P 500 index was up 96.38 points at 5,714.64, while the Nasdaq composite was up 486.12 points at 18,059.42.
The Canadian dollar traded for 73.68 cents US compared with 73.58 cents US on Thursday.
The November crude oil contract was up 89 cents at US$70.77 per barrel and the October natural gas contract was down a penny at US2.27 per mmBTU.
The December gold contract was up US$9.40 at US$2,608.00 an ounce and the December copper contract was up four cents at US$4.33 a pound.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
The Canadian Press. All rights reserved.
VANCOUVER – Supervised injection sites are saving the lives of drug users everyday, but the same support is not being offered to people who inhale illicit drugs, the head of the BC Centre for Excellence in HIV/AIDS says.
Dr. Julio Montaner said the construction of Vancouver’s first indoor supervised site for people who inhale drugs comes as the percentage of people who die from smoking drugs continues to climb.
The location in the Downtown Eastside at the Hope to Health Research and Innovation Centre was unveiled Wednesday after construction was complete, and Montaner said people could start using the specialized rooms in a matter of weeks after final approvals from the city and federal government.
“If we don’t create mechanisms for these individuals to be able to use safely and engage with the medical system, and generate points of entry into the medical system, we will never be able to solve the problem,” he said.
“Now, I’m not here to tell you that we will fix it tomorrow, but denying it or ignoring it, or throw it under the bus, or under the carpet is no way to fix it, so we need to take proactive action.”
Nearly two-thirds of overdose deaths in British Columbia in 2023 came after smoking illicit drugs, yet only 40 per cent of supervised consumption sites in the province offer a safe place to smoke, often outdoors, in a tent.
The centre has been running a supervised injection site for years which sees more than a thousand people monthly and last month resuscitated five people who were overdosing.
The new facilities offer indoor, individual, negative-pressure rooms that allow fresh air to circulate and can clear out smoke in 30 to 60 seconds while users are monitored by trained nurses.
Advocates calling for more supervised inhalation sites have previously said the rules for setting up sites are overly complicated at a time when the province is facing an overdose crisis.
More than 15,000 people have died of overdoses since the public health emergency was declared in B.C. in April 2016.
Kate Salters, a senior researcher at the centre, said they worked with mechanical and chemical engineers to make sure the site is up to code and abidies by the highest standard of occupational health and safety.
“This is just another tool in our tool box to make sure that we’re offering life-saving services to those who are using drugs,” she said.
Montaner acknowledged the process to get the site up and running took “an inordinate amount of time,” but said the centre worked hard to follow all regulations.
“We feel that doing this right, with appropriate scientific background, in a medically supervised environment, etc, etc, allows us to derive the data that ultimately will be sufficiently convincing for not just our leaders, but also the leaders across the country and across the world, to embrace the strategies that we are trying to develop.” he said.
Montaner said building the facility was possible thanks to a single $4-million donation from a longtime supporter.
Construction finished with less than a week before the launch of the next provincial election campaign and within a year of the next federal election.
Montaner said he is concerned about “some of the things that have been said publicly by some of the political leaders in the province and in the country.”
“We want to bring awareness to the people that this is a serious undertaking. This is a very massive investment, and we need to protect it for the benefit of people who are unfortunately drug dependent.” he said.
This report by The Canadian Press was first published Sept. 18, 2024.
The Canadian Press. All rights reserved.
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