Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
per week
for first 24 weeks

Enjoy unlimited digital access
Cancel Anytime
Enjoy Unlimited Digital Access
Get full access to
Just $1.99per week for the first 24weeks
Just $1.99per week for the first 24weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(}function setPanelState(o){dom.root.classList[o?"add":"remove"](,dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

B.C. Premier and Liberal Leader Christy Clark uses an umbrella as she walks into a coffee shop for a campaign stop in Oak Bay, B.C., on Monday May 13, 2013. British Columbians go to the polls Tuesday for a provincial election.

DARRYL DYCK/The Canadian Press

A weakening B.C. economy will weigh heavily on whichever party forms the government after Tuesday's provincial election.

British Columbia's outlook is dogged by slower economic growth in China, slumping commodity prices and questions surrounding how durable the recovery in U.S housing starts will be.

And there's the slump in the local real estate market, which has seen both prices and sales activity fall.

Story continues below advertisement

"Whoever is going to win power in the election is going to come into office presiding over an economy that is growing at a very sluggish pace, with a lot of uncertainties and risks out there," Jock Finlayson, executive vice-president of the Business Council of British Columbia, said in an interview Monday.

In the short term, there is little influence that any newly elected government will be able to exert on the provincial economy, said Hamish Telford, head of the political science department at the University of the Fraser Valley.

While the NDP and Liberals have sought to highlight their differences on tax policies during the election campaign, "they appear to be different only at the margins," Mr. Telford said.

For instance, the NDP is proposing relatively small shifts such as raising corporate income tax rates slightly higher than the Liberals, he noted.

Over the longer term, greater policy differences emerge.

The NDP in particular has raised concerns about fracking in natural gas production, and the party has vowed to reverse a decision by the B.C. Liberals to streamline provincial environmental reviews with the Canadian Environmental Assessment Agency. The Liberals charge that the NDP would harm the economy, but New Democrats counter that they support job creation in a sustainable fashion.

The B.C. Liberals have been in power since 2001, while the province's New Democratic Party is seeking to win its first B.C. general election since 1996.

Story continues below advertisement

The business council forecasts that the province's economy will grow by 1.6 per cent this year, down slightly from an estimated 1.7 per cent last year. British Columbia's growth in real gross domestic product has slowed, compared with 2.6 per cent in 2011.

"We're not changing our 2013 forecast based on who wins the election. We will revisit the forecast later in the year once we see a new budget," Mr. Finlayson said.

For British Columbia, which is banking on increased exports to China to help bolster the province, strong lumber prices have been a pleasant surprise. The rebound in U.S. housing starts has provided a welcome lift to long-suffering B.C. lumber producers. Many of those producers have diversified beyond the United States over the years by selling wood products to Asian customers.

Natural gas markets are showing early signs of staging a recovery. But a range of other commodities have slumped over the past 18 months, notably prices for coal, copper and zinc – hurt by fears of China's economy taking a breather, PricewaterhouseCoopers said in a report on B.C.'s mining industry.

The Liberals and NDP have touted the potential in exporting liquefied natural gas. Still, it will take years for the fledgling LNG industry to become a reality, and even then, it is unclear how many projects will go from the drawing board to the production and pipeline phase.

Two oil pipeline proposals, Northern Gateway and the planned expansion of the Trans Mountain system, are touted by the energy industry as crucial to helping boost Canadian exports. Those proposals, however, face high hurdles. The NDP, for instance, opposes Kinder Morgan Canada Inc.'s Trans Mountain plans to increase oil tanker traffic at the Port of Vancouver. Both the Liberals and NDP have expressed major concerns about Northern Gateway.

Story continues below advertisement

In December, Moody's Investors Service cautioned that $39.8-billion of B.C. debt securities were at risk of a ratings downgrade because of a tepid economy. Moody's reduced its outlook on the province's debt to "negative" from "stable" at the time. In April, the credit-rating agency decided to maintain the province's triple-A rating, but warned that its outlook on British Columbia's debt is still "negative," reflecting the risks in the province's ability to produce balanced budgets and attack debts.

British Columbia's Liberal government estimated that the province had a $1.2-billion deficit for the 2012-13 fiscal year. In February, the Liberals forecast a balanced budget for 2013-14, but the NDP argued that the prediction of a slim $197-million surplus got a big assist from property asset sales totalling more than $800-million.

"If the province is unable to stabilize and then reverse the accumulation in debt, then downward rating pressure could emerge," Moody's said last month.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies