British Columbia expects to lead the provinces with economic growth of 2.4 per cent this year as it weathers the resource sector’s slump and posts a fourth consecutive balanced budget.
Low prices for commodities such as coal, copper, lumber, pulp and natural gas have hurt the province’s mining, forestry and energy industries.
But the B.C. government said Tuesday that strength in manufacturing, retailing, technology, trade and film will help propel a diverse economy.
Population growth and a tourism boom will also contribute to the outlook for prosperous times, said B.C. Finance Minister Mike de Jong, who forecast a $264-million surplus on $48-billion in revenue for the 2016-17 fiscal year.
“Our economy continues to grow, and along with it, the revenues that flow into government,” he said in Victoria.
The B.C. government is predicting 2.4-per-cent growth in real gross domestic product in 2016 while the B.C. Economic Forecast Council is envisaging 2.7-per-cent growth.
“That positions us as the lead of the pack in terms of Canada,” Mr. de Jong said.
The B.C. Economic Forecast Council, comprising 13 economists in Canada, took note of Greater Vancouver’s hot housing market amid an influx of new residents from across Canada and overseas. The council said more data are required to determine levels of foreign investment in residential housing.
No government revenue is forecast over the next three years from exporting liquefied natural gas because no project backers have made the decision to even start construction. A newly created B.C. Prosperity Fund would include LNG revenue in the long term.
With LNG revenue still on the horizon and not yet booked for government budgeting purposes, Mr. de Jong is relying on momentum from economic drivers such as the migration of people to British Columbia. This year alone, more than 48,200 newcomers are forecast to move to B.C., including 13,000 from other provinces and 35,200 from other countries.
As Alberta gets hit by depressed oil prices, thousands of workers are moving westward.
“We are attracting people from other provinces who are seeking a safe harbour from economic storms,” Mr. de Jong said. “In the third quarter of 2015, B.C. saw the highest quarterly level of net interprovincial migration since 1995. We had a net inflow of more than 6,315 people from other regions of Canada, and yes, more than one-third of those arrived from Alberta.”
Film production has been one of the bright spots as projects pick up with the help of the lower Canadian dollar versus the U.S. currency. Budget documents estimate there are now about 20,000 people employed in the province’s film and television industry, which boasts eight major studios.
As the Vancouver region cements its reputation as Hollywood North, the B.C. Liberal government will be limiting growth in film tax credits, saying those incentives are already generous.
The B.C. government will be setting up a commission on tax competitiveness to take into account the diverse economy. “It is timely to examine if the province’s taxation regime has kept pace with its changing economy and whether current tax policy encourages business investment and growth as the province moves further into the 21st century,” according to budget documents.
The Vancouver Board of Trade praised the government for being fiscally disciplined. But Generation Squeeze, a group representing the views of Canadian workers in their 40s or younger, said the B.C. budget offers little to help tackle high housing costs in the Vancouver region.Report Typo/Error