VANCOUVER — The Business Council of British Columbia (BCBC) has released its last B.C. Economic Review and Outlook of the year, with the wrap up of several megaprojects taking centre stage.
According to the report, while B.C.’s economy is “weak” by historical standards, it is still better then the rest of Canada in recent years, and that can be attributed to the impact of such megaprojects as Trans Mountain, Site C, LNG Canada and the Coastal GasLink.
This reflects high levels of government spending and public sector hiring. In contrast, private sector investment and hiring remain weak, states a release.
“Now that provincial megaprojects are complete, BCBC expects B.C.’s economic performance will align more closely with the rest of Canada,” states a release. “Topline GDP growth is expected to be around one per cent in 2024 rising to 1.8 per cent in 2026 – a modest pace by historical standards, which are closer to 2.5 per cent.”
B.C.’s GDP per capita fell in 2023 and 2024. However, it should start to grow again in 2025 and 2026 as population growth slows and labour productivity improves, the report notes.
“On a population adjusted basis, Canada’s economy has been one of the worst performing out of the 38 advanced OECD countries and seen little or no growth for a decade,” said David Williams, BCBC’s vice-president of policy, in a statement.
“B.C. has done slightly better, owing to the lift from mega capital projects and very high government spending. The projects are now completed, and current levels of government spending aren’t sustainable, so it’s not clear what will drive future prosperity.”
The Business Council is urging policymakers to focus on improving the competitiveness of B.C.’s tax and regulatory environment.
In addition, while service exports like professional services and tourism are growing, these gains are offset by losses in forestry and manufacturing.
“Where will B.C.’s economic growth come from is the question we’re asking,” said report co-author Ken Peacock, BCBC’s senior vice president and chief economist. “We need a stronger private sector, but unfortunately investment and hiring in B.C.’s private sector appear weak.”
“Today’s report stresses the need for swift action to avoid stagnation. As Canada’s trade relationships become more volatile, particularly with U.S. policies, B.C. must reassess its economic strategies,” the release notes.
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