The B.C. economy has already slipped into recession this year, according to some of the blue-ribbon economists who help shape the provincial government's economic forecasts.
But Finance Minister Colin Hansen, who is finalizing a Feb. 17 budget that aims to level out the turbulence, refused yesterday to let the "R-word" cross his lips.
Last Friday, Mr. Hansen received updates from the dozen economists who had so recently helped him produce a consensus outlook that projected that B.C.'s economy would grow in 2009.
Now, many of those same forecasters, who in early December were largely still convinced British Columbia would ride out the global economic storm, are changing their minds.
"B.C. slipped into recession, certainly since the beginning of this year," said Darcy Rezac, managing director of the Vancouver Board of Trade.
What tipped the scales for Mr. Rezac are recent employment statistics showing December's job losses - in the United States, across Canada and in British Columbia.
Last month, British Columbia's long stretch of low unemployment rates took a hit when 7,500 people lost their jobs, indicating the province is not immune to the downturn.
Mr. Rezac spoke after meeting in Victoria yesterday with federal Finance Minister Jim Flaherty.
"The picture is so different even from November," Mr. Rezac said. The board of trade, one of the members of Mr. Hansen's private-sector forecast council, is now projecting the B.C. economy will shrink by at least half a percentage point and as much as 1 per cent this year.
Helmut Pastrick, chief economist for Central 1 Credit Union, is also downgrading his 2009 projections this week.
He said he will release a new estimate on Thursday, but it will be a negative number for the B.C. economy.
It means B.C. is heading into its fifth recession since 1961. The only question, it seems, is how long it will last. Mr. Pastrick noted that several sectors - particularly forestry - have already been declining, but this year will see the misery spread out across most sectors as companies, consumers and investors retrench.
Just the act of declaring a recession can make things worse, he noted. "The 'R-word' can produce a negative feedback loop that just adds to the downward movement."
Jock Finlayson of the B.C. Business Council said his forecast is still for 0-per-cent growth in 2009, but he added, "It's very conceivable B.C. could be in recession."
Since the business council handed in its Dec. 4 forecast to Mr. Hansen, Mr. Finlayson said, the outlook has deteriorated. "Forecasters are gloomier today. That tells you how quickly things are shifting," he said.
"The economy has slowed. It's a bit academic if it is zero or a bit below that. The export sector is struggling and the pillars that kept us growing - housing starts and consumer spending - are weakening or stalling."
In Vancouver, Mr. Hansen allowed that there is "some erosion of optimism" about the province's economic prospects and noted that he had asked for revised growth forecasts from the economists who advise the province. Although those updates were due last Friday, Mr. Hansen still stopped short of conceding that the B.C. economy will slide into recession.
