The Trans Mountain Pipeline Outperforming the Entire B.C. Economy Should be a Wakeup Call | Canada News Media
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The Trans Mountain Pipeline Outperforming the Entire B.C. Economy Should be a Wakeup Call

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The recent completion of the Trans Mountain (TMX) pipeline expansion was celebrated as a success, for both Canada’s energy sector, and as a boost to the Canadian economy. However, the forecast that the TMX pipeline will contribute more to Canada’s growth (0.25 percentage points) than the entire province of British Columbia (0.23 percentage points) is a rude and sobering wake-up call.

That disparity, even if small, highlights the problems facing BC’s economy and shines a light on the pressing need to rebuild investor trust and make better use of our abundant natural resources.

Given its array of resources, BC should be one of the pre-eminent forces in the Canadian economy. While BC is certainly no slug, we are still witnessing Canada’s Pacific gateway province struggling to keep up with a single infrastructure project. This scenario exposes the issues affecting how BC chooses to handle and benefit from its rural economies.

BC’s economy on the whole has traditionally relied on its resource sectors for growth. From forestry and mining to energy and agriculture industries, these sectors have supported small-town BC for decades, and account for vast swatches of the province’s total international exports. However recent economic indicators in the province suggest a trend; a decline in the efficiency and profitability of these sectors.

A key concern lies in the diminishing confidence among investors in BC’s resource industries. The ever-changing policies of the provincial government, especially the uncertain regulations, have made it difficult for investors to make decisions in this province. While the government’s efforts to manage land use and resources have excellent intentions, they have caused great uncertainty among both the public and industry.

It is vital for British Columbia to work towards reconciliation, but shouldn’t come at the expense of excluding players, like industry and the public from policymaking processes.

Take, for example, the proposed changes to the Lands Act, the new strategy for watershed security, and the updated coastal marine strategy – all aimed at safeguarding BC’s environment, but unintentionally discouraging investment. The lack of transparency and perceived haphazard policymaking risks driving investors away not just from BC’s resource sectors, but from the entire province.

This situation is particularly challenging for communities that heavily rely on resource industries to put food on the table. According to the 2024 State of the North report, rural economies are already feeling the impact of declining traditional sectors like forestry, which saw multiple mill closures in the past year across the province. These forestry communities have been experiencing rising unemployment due to downturns across various resource sectors since 1997.

Nevertheless, there is still potential for growth and rejuvenation. BC holds huge reserves of the materials required for the energy transition, such as lithium and rare earth elements. These minerals play a key role in producing electric vehicles, solar panels and other innovative technologies.

The federal government is keen on boosting the development of new mines by improving the permitting processes, and offering financial incentives for investors, in addition to heavily subsidizing electric vehicle production in provinces like Ontario. It is therefore essential for provincial policies to align with these efforts.

BC needs to also simplify its own processes, ensure transparency and engage all stakeholders in decision making. A well-rounded approach that upholds Indigenous rights while fostering sustainable growth is key. The successful collaboration between the Haisla Nation and the Pembina Pipeline Corporation on the Cedar LNG project serves as a model for how Indigenous participation leads to benefits for all.

Moreover as urban areas in British Columbia undergo further economic diversification, it is crucial not to overlook the significance of rural economies. Investing in resource sectors should be seen as complementing the expansion of the technology and professional services industries. The prosperity of urban hubs, like Vancouver and Victoria, is intricately tied to the well being of the economies that supply the raw materials and energy for high tech sectors.

Realizing that the economic impact of the expanded TMX pipeline is exceeding that of the province of all of BC is a call to action. We need a revamp in how this province manages its resources and promotes economic development. Trust needs to be rebuilt among investors by adopting inclusive policy making practices and making the most of our resources in order to solidify BC’s role as a key contributor to Canada’s prosperity.

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Health-care spending expected to outpace economy and reach $372 billion in 2024: CIHI

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The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.

The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.

CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.

This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.

While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.

Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.

The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.

This report by The Canadian Press was first published Nov. 7, 2024.

Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.

The Canadian Press. All rights reserved.

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Trump’s victory sparks concerns over ripple effect on Canadian economy

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As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.

Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.

A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.

More than 77 per cent of Canadian exports go to the U.S.

Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.

“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.

“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”

American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.

It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.

“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.

“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”

A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.

Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.

“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.

Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.

With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”

“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.

“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”

This report by The Canadian Press was first published Nov. 6, 2024.

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September merchandise trade deficit narrows to $1.3 billion: Statistics Canada

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OTTAWA – Statistics Canada says the country’s merchandise trade deficit narrowed to $1.3 billion in September as imports fell more than exports.

The result compared with a revised deficit of $1.5 billion for August. The initial estimate for August released last month had shown a deficit of $1.1 billion.

Statistics Canada says the results for September came as total exports edged down 0.1 per cent to $63.9 billion.

Exports of metal and non-metallic mineral products fell 5.4 per cent as exports of unwrought gold, silver, and platinum group metals, and their alloys, decreased 15.4 per cent. Exports of energy products dropped 2.6 per cent as lower prices weighed on crude oil exports.

Meanwhile, imports for September fell 0.4 per cent to $65.1 billion as imports of metal and non-metallic mineral products dropped 12.7 per cent.

In volume terms, total exports rose 1.4 per cent in September while total imports were essentially unchanged in September.

This report by The Canadian Press was first published Nov. 5, 2024.

The Canadian Press. All rights reserved.

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