Modest momentum boosts British Columbia’s economy as the province prepares to unveil its budget, but long-term questions remain

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As the province prepares to table its budget, experts say BC’s economy is expected to remain moderately strong – based on low unemployment rates and a robust housing market last year – but questions remain about how it will support long-term economic growth.

According to Brian Yu, chief economist at Central 1 credit union, headquartered in Vancouver, British Columbia’s economy has weathered the pandemic better than most provinces – and he expects that the budget reflects that.

Central 1’s economic outlook shows the economy is expected to grow 3.9% in 2022, following a 5% increase in 2021, as the province continues to recover from the pandemic.

But it also shows that the economy is expected to slow in 2023 and 2024.

“So I think what we’re seeing, number one, is probably a balanced budget in my opinion… [in] the last quarterly report, even in December, they were getting close,” Yu said.

Lieutenant Governor of BC Janet Austin’s Speech from the Throne on February 8 outlined the NDP government’s priorities for post-pandemic economic recovery, climate change, affordable housing, jobs, reconciliation, childcare and land management.

When the budget is unveiled, Yu says he expects to see more investment in climate-proof infrastructure after the wildfires and floods that hit the province in November last year, affecting highways and supply chains.

The province has yet to reveal pricing for repairs to flood-damaged highways, though the federal government has earmarked $5 billion for disaster relief for British Columbia, and Yu says the costs of reconstruction are not necessarily negative because “construction is generally positive for the economy”. activity.”

Collapsed sections of bridges destroyed by severe flooding and landslides on the Coquihalla Highway north of Hope, B.C., are seen in an aerial view from a Canadian Forces reconnaissance flight Nov. 22, 2021. (Darryl Dyck/The Canadian Press)

Last week, the province unveiled its economic recovery plan, which includes supporting job growth through training and investment, and growing the technology, trades and agriculture sectors of British Columbia.

Yu says these efforts support the labor market, but large resource-based projects are essential for economic activity and he questions what kind of investments the government is making on this front while existing projects will be completed in the years to come.

“I don’t think what we’ve seen are necessarily levers or key drivers of longer-term economic growth,” he said.

Businesses seek more support

Nerissa Allen, president and CEO of the Black Business Association of BC (BBABC), says she seeks support for nonprofits like hers.

The BBABC offers operational support to black entrepreneurs and small businesses; during the pandemic, they have offered help in applying for grants and loans, and in developing businesses’ social media presence.

“Most traditional grants focus on cultural activities, which is great, but we need to start focusing on the economic empowerment of local businesses,” Allen said.

Bridgitte Anderson, president and CEO of the Greater Vancouver Board of Trade, says the province’s economic recovery plan lacks detail. She says she wants lower taxes and regulatory reform to help ease the burden of high operating costs.

“There is an opportunity next week with the BC budget to look at a whole host of tax reforms and regulatory reforms that the business community has been calling for for some time,” she said.

Addressing these issues, she adds, would attract more investment to the province.

affordable housing

As in previous years, British Columbians will be looking to invest more in affordable housing and take steps to help ease the burden of soaring prices. Over the past year, housing prices have risen 40% in the Fraser Valley and 16% in Vancouver.

BC Green Party Leader Sonia Furstenau said she would look to invest more in the budget for housing, in addition to health and mental health initiatives.

“We obviously need more action on the housing affordability crisis. We need a lot more solutions that are non-market, non-profit solutions, co-ops for example,” Furstenau said.

Newly elected British Columbia Liberal Leader Kevin Falcon said Friday that recent announcements on jobs and the economy, ahead of Budget Day, lack detail and measurable targets.

Finance Minister Selina Robinson is expected to table the NDP government’s budget on Tuesday.

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