Slow growth forecast for B.C. and Canada, says new BCBC report
Business Council tempering expectations of economic recovery while watching for positive policy signals in upcoming provincial budget
February 15, 2024 (Vancouver, B.C.) - In the lead-up to the B.C. budget, the Business Council of British Columbia (BCBC) has released its latest forecast report showing that economic growth in B.C. and Canada is expected to slow in 2024. While near-term momentum in the U.S. economy and favourable trade prices provide bright spots, lackluster global growth, higher borrowing costs, and weak private sector investment and job growth are acting as a drag on prosperity.
Report highlights:
Canadians face a sustained reduction in living standards as per capita GDP nationally falls 1.8 per cent in 2023 and another one per cent in 2024 [Fig.2/3]. An upturn should begin in 2025 but BCBC estimates Canada will not recover its pre-pandemic (2019) level of GDP per capita until at least 2027, later than most other advanced countries.
Large capital projects in B.C. fuelled strong gains in real per capita GDP, lifting B.C. above Canada on this important metric of prosperity [Fig.8]. However, with B.C.’s economy growing by just 0.9% in 2023 and a projected 0.7 per cent in 2024 and 1.6 per cent in 2025, B.C.’s real per capita income (GDP) is expected to fall back below the Canadian benchmark [Table 2].
B.C. saw weak job growth in 2023 with total employment advancing just 1.5 per cent, the lowest overall job growth in the country. Private sector employment declined by 0.2 per cent (6,000 jobs). This was offset by a 4.4 per cent increase in public sector hiring (24,000 jobs) [Fig. 9/10].
Net interprovincial migration turned negative in 2023 as we witnessed near-record net outflows of residents from the province [Fig.14]. However, with international migration adding more than 180,000 people, overall population growth remained strong.
Given current economic conditions and policy settings, many sectors face headwinds in the coming year. However, some sectors, including mining, tourism and film and television have more positive outlooks.
“The current investment climate is concerning,” says Ken Peacock, BCBC Senior Vice President and Chief Economist. “B.C. recently experienced an economic surge from the construction of LNG Canada, the Transmountain pipeline, Site C, and other large investments. With these projects winding down, provincial growth downshifts as B.C.’s economic expansion is further constrained by a diminished global backdrop, high intertest rates and weak private sector hiring.”
BCBC’s update and forecast comes just ahead of the provincial budget. The Business Council hopes the 2024 Budget contains policy adjustments including tax measures focused on supporting business growth, attracting capital investment and creating private sector jobs.
“Attracting large projects and new private sector investments is critical to the future prosperity of B.C.,” says BCBC President and CEO Laura Jones. “We’ll be watching the budget closely for signs the province is looking to improve the economic outlook, which includes ensuring taxes and regulations are competitive and affordability concerns are being addressed.”
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ABOUT BCBC
Established in 1966, the Business Council of British Columbia is a non-partisan organization dedicated to promoting prosperity for current and future generations.
Comprised of over 200 leading B.C. companies, post-secondary institutions and industry associations, BCBC provides credible information, fosters cross-sectoral relationships and advances bold and practical solutions to the policy challenges of our time.