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In a federal election with a lot up for grabs, British Columbia is the golden ring. With four parties expecting to capture seats and as many as a dozen ridings too close to call, the province is very much in play in what is shaping up as one of the closest federal votes in history.

And because B.C.’s polls are the last in the country to close, the way its voters lean might tip the national scales on election night Monday – a rare role for a province that is more accustomed to the outcome having already been declared before its votes are counted.

It’s fitting that this election should come down to B.C. So many of the country’s most pressing economic policy issues at play in this election land right on the province’s doorstep.

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Energy infrastructure versus climate change? The controversial Trans Mountain pipeline extension will run right through the middle of the province. Trade conflicts with China? The ports along its coast are on the front lines of those shipments; its huge forest-products sector and its nascent liquefied natural gas industry rely heavily on the Chinese market. Housing? Vancouver is the epicentre of the country’s fading housing boom and the least affordable market in the country.

“B.C. is really at the heart of a lot of these issues,” says Allan Tupper, political science professor at the University of British Columbia. “They’re all here, in spades.”

During the past four years, while Alberta’s economic struggles have captured the headlines, B.C. has quietly taken over the mantle as the country’s fastest-growing provincial economy. It is the gateway to Asian markets, which grew at triple the pace of NAFTA exports. It has expanded as a hub of technology innovation. It is a huge centre for immigration, a critical component of the country's population growth that has expanded the skilled labour force.

But as the election nears, B.C. finds itself at an economic crossroads. The province is in the midst of its slowest year of growth since the Great Recession. Unemployment has swollen from 4.2 per cent a year ago to nearly 5 per cent today; jobs have declined in every month since May. Consumer spending, a key driver during the economic boom, has gone into a skid. The province’s biggest export markets are slowing. Its forest-products sector – historically B.C.’s economic staple – is struggling mightily, with slumping export demand, high costs and a growing list of mill closings.

At the root of this malaise is the shifting fate of what has become B.C.’s dominant industry: real estate. An unprecedented boom in the housing market not only was the catalyst for B.C.’s economic surge in recent years, but it created an economy increasingly dependent on a single sector for its well-being. Now, as the air leaks out of the housing balloon – the benchmark price in Greater Vancouver is down more than 7 per cent in the past 12 months, with some Lower Mainland municipalities down more than 10 per cent – the whole economy is caught in the impact.

Last year, the real estate services sector directly accounted for 17 per cent of B.C.’s gross domestic product; if you add in residential construction, it was 21 per cent. What’s more, the sector directly accounted for 27 per cent of GDP growth over the past four years (2015-18).

That’s not quite Alberta territory – where the oil and gas sector (including extraction, oil and gas services and petroleum manufacturing) made up 29 per cent of GDP last year – but it certainly indicates how big a deal the sector is for B.C.

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For the province’s voters, the primary concern is the hangover left from years of a red-hot market and runaway prices: They are trying to keep their heads above water in some of the most expensive communities in the country to buy a house. Even with this year’s downturn, the Real Estate Board of Greater Vancouver’s benchmark price for a typical home in the Lower Mainland region – where about 60 per cent of B.C.'s population lives – was $938,500 last month, up 60 per cent from five years ago. The average for a detached single-family house was a soul-crushing $1.2-million. The people in this region, encompassing Vancouver and a cluster of some of the closest races in the election campaign, have the highest average household-debt-to-income ratio in the country.

An online poll by Vancouver-based Research Co. found that housing was the top election issue among B.C. respondents, topping the environment. An Ipsos poll published last week indicated that housing is a much higher priority for voters in B.C. than anywhere else in the country, while the issue of affordability in general ranks a very close second to climate change among B.C. concerns.

In a campaign in which many important economic issues have received short shrift – the parties have shown little interest in talking about trade policy, for instance, or industrial competitiveness – affordability was one thing that all parties locked into early and often. They clearly recognized it as a hot-button issue in the election’s key battlegrounds, not only in B.C., but in Southern Ontario, too. The competing Conservative and Liberal proposals for billions in income tax cuts can be viewed through the lens of affordability in general – providing relief for middle-class voters who are feeling the financial strains of high costs and heavy debts, which in much of B.C. are tilted heavily toward mortgages. And it was no accident that the Liberal Party’s first major platform reveal of the campaign was its plan on housing affordability – and that it chose a townhouse development in B.C.’s capital of Victoria to make the announcement.

But while affordability is unquestionably a major concern for B.C. voters, it’s inescapable that the housing frenzy that created those unaffordable prices was also the primary reason for the province’s economic success in recent years. One of the great dilemmas for B.C. is that any measures that aid affordability by reining in the housing market also, by extension, apply the brakes to the province’s economy. (Indeed, that is what B.C. has already seen from the effects of provincial foreign-buyer taxes and tougher federal mortgage-qualification requirements, which combined to restrain the province’s housing market over the past two years.)

Andrey Pavlov, a finance professor at Simon Fraser University in the Vancouver suburb of Burnaby, says that most of the proposals in the federal parties’ election platforms focus on the demand side of the housing equation – such as taxes on foreign buyers and incentives for first-time homeowners – where these unappealing trade-offs reside.

“We shouldn’t be reducing demand, we should be increasing supply,” he says.

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Prof. Pavlov is among the proponents of creating incentives to dramatically expand housing supplies, as a means to alleviate price pressures while also sustaining strong activity in the construction and real estate sectors. Understandably, many of those proponents are in the real estate development industry; nevertheless, the concept does make a certain amount of sense as a longer-term economic solution to B.C.’s real estate dilemma.

“There’s no reason for it to be a trade-off at all. We can have both – we can have the housing sector be a great supporter of the economy and a great employer, and at the same time have affordable housing. The way we do it is increase supply.”

But beyond a vague pledge from the Conservatives to free up surplus federal properties for possible residential redevelopment, he sees little in the party platforms that even pays lip service to the supply side.

“In my view, that’s very misguided.”

In the bigger picture, perhaps this slowdown could represent an opportunity for the B.C. economy to start rotating away from its problematic over-dependence on housing and focus on reinvigorating other sectors. For example, economists say that construction of LNG facilities – the beginnings of an entirely new export industry for the province – will help make up for a moderating in housing market activity in the next couple of years. Strong population growth, owing to some of Canada’s highest levels of immigration, offer the province opportunities to leverage that influx of skills in such areas as exports, technology and value-added manufacturing.

But in this, the election campaign has fallen conspicuously short. There has been shockingly little discussion on the country’s competitiveness, and innovation needs to position our industries for future growth – something particularly important to an export-heavy economy such as B.C.’s.

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A poll by the Business Council of British Columbia, released last week, showed that the biggest issue for the province’s large private-sector employers was the need for a major overhaul of Canada’s taxation system. The notion of a more competitive tax structure was high on the political agenda as recently as last year, when U.S. President Donald Trump brought in his sweeping tax cuts. Yet, it wasn’t even on the radar screen in the campaign.

The second-most pressing concern in the survey – improving Canada’s innovation and productivity – has similarly had little visibility in the campaign. The third priority of B.C.’s business leaders was increased infrastructure investment – something one of the two leading parties vying to form the next government, the Conservatives, has actually vowed to cut.

“I think there’s a real disconnect between what the people running for office feel the voters want to talk about and hear about, and the thinking of leaders in the corporate boardroom. I think they’re really on different pages at the moment,” says Jock Finlayson, the Business Council’s executive vice-president and chief policy officer.

“They’re talking about almost everything other than how we grow the economic pie. It’s a little bit puzzling.”

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