How is BC’s economy shaping up for the rest of 2018 and 2019? How did its economic performance compare to Alberta, Ontario, and the rest of Canada? Find out below.
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Another great year for BC’s economy
Last year was the fourth consecutive year of solid economic expansion in British Columbia. Second only to Alberta’s real gross domestic product (GDP) growth rate, BC’s economy grew at a rate of 3.9% in 20171.
While the provincial government’s foreign buyers tax dampened home sales in late 2016 and the first quarter of 2017, real estate activity picked up again in the second and third quarter of 2017. BC’s buoyant real estate market and swelling consumer demand generated new employment opportunities across many industries.
BC’s population growth rate slowed in 2017 to 1.25%—an increase of 49,502 residents—bringing the total population to 4.82 million. Over 60% of new residents were international immigrants, while those who relocated from other provinces accounted for another 27%.
The provincial labour force rose in conjunction with population growth last year, gaining 87,300 new jobs and bringing the employed workforce to 2.47 million workers. Meanwhile, BC’s unemployment rate declined to 5.1%, its lowest level since 2008.
The value of BC’s exports grew by 12.7% to $43.7 billion in 2017, propelled by a depreciating Canadian dollar and strong demand growth for our resources. But BC still has the lowest value of exports per worker when compared to Alberta, Ontario, and the national average.
Our province’s strong performance in 2017 speaks to both solid economic fundamentals at home, and buoyant growth in the US and the rest of the world. However, 2017 was not a year without trials. The indefinite delay of several proposed liquefied natural gas (LNG) projects hurt employment prospects in northern BC, while future economic growth related to LNG is postponed across the province for the foreseeable future.
Controversy over the completion of Kinder Morgan’s Trans Mountain pipeline in BC compelled the federal government to offer to buy it in June 2018, but the future of this project and the benefits it would confer on both BC and Alberta is also unclear. These events raise questions about the future prosperity of BC’s energy sector, and what it means for employment and government revenues in the long term.
While BC’s housing market, especially in Southwest BC, generated many jobs and opportunities in 2017, it has also reached the point where housing is generally unaffordable for many families. The high housing prices BC experienced in 2017 could motivate mobile workers to leave the province and deter new ones from moving here.
The shift towards a protectionist stance by BC’s major trading partner, the US, also raises concerns about the future of the province’s export sector. BC needs to diversify its export markets and reduce it dependency on the US in the years to come. Having said this, the data shows that BC has room to grow its exports of goods and services, particularly in markets such as the European Union and Asia, where Canada enjoys favourable trade relationships.
1 TD Economics, Provincial Economic Forecast, Growth “Normalization” Underway After Banner 2017, June 19, 2018.