As the economy improves in 2014, British Columbia is forecast to once again become a magnet for new arrivals from across Canada and around the world.
Population growth is an important indicator of economic health, and the province has been a laggard in attracting new residents in recent years, especially with thousands moving to energy-rich Alberta.
Last year, British Columbia had a net loss of 4,300 residents to other provinces while gaining 32,980 people from other countries.
In Tuesday’s provincial budget, B.C. predicted a net gain in 2014 of 4,900 people from other provinces and 35,280 individuals from abroad.
But the recovery, particularly in the short term, could be bumpy.
“Although prices for most commodities have recovered since falling sharply in the 2008-09 recession, they may remain volatile in the near-term due to ongoing global economic uncertainty and the potential for further slowing of the Chinese economy,” the B.C. government said in its outlook.
Economists, however, are already beginning to factor in gains that would arise should British Columbia become an exporter of liquefied natural gas within four or five years.
The 13-member B.C. Economic Forecast Council advises provincial Finance Minister Mike de Jong in drawing up fiscal plans. The group notes that “strong economic growth and high wages in neighbouring Alberta have been drawing skilled workers away from British Columbia,” according to budget documents.
But the council emphasized that B.C.’s economic prospects are looking bright, after challenges in recent years with low prices for commodities such as lumber and coal.
While coal prices remain depressed, the lumber market has been on the comeback trail.
“The council also expects that China’s continued demand for commodities will have a positive effect on B.C.’s exports of materials such as lumber, pulp and copper,” budget documents say.
On average, the council forecasts real gross domestic product growth of 2.3 per cent in British Columbia this year, an improvement over last year’s tepid 1.4 per cent. The prediction for real GDP growth is 2.7 per cent next year.
“As business confidence improves, council members expect steadily rising employment in B.C. during 2014 and beyond, which would likely boost domestic activity in the province,” said the budget’s outlook.
With a slim budget surplus announced Tuesday, the government had little room to provide major tax breaks. It did, however, offer relief to some home buyers.
The real estate sector has been lobbying for tax relief, and there was a relatively small break announced in the provincial property transfer tax for eligible first-time home buyers. Those who qualify could save up to $7,500 on buying their first house, as long as that property is acquired for $475,000 or less, up from the previous threshold of $425,000.
Anne McMullin, president of the Urban Development Institute’s Pacific region, welcomed the change as a first step toward what she hopes will be more dramatic reform in the future to the property transfer tax. “This tax cut for the first-time home buyer is a good start,” she said.
Cameron Muir, chief economist at the B.C. Real Estate Association, said it is an encouraging sign that British Columbia is becoming a more attractive place for job seekers. “The stronger economic growth and employment opportunities in Alberta siphoned off many younger British Columbians,” Mr. Muir said. “But we’re seeing the economy in B.C. improve.”Report Typo/Error