british columbia economy

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Will British Columbia’s New NDP Government Abandon Past Spending Discipline?

Summary

  • In many respects, British Columbia can currently boast of having the soundest fiscal position of any Canadian province. While other provinces, including Ontario and Alberta, have struggled in recent years with comparatively large budget deficits and significant debt accumulation, BC recorded a $2.7 billion operating surplus last year (2016/17)—its fourth consecutive operating surplus and the largest positive fiscal balance among the provinces.
  • A key reason for BC’s favourable fiscal standing today is its relative spending discipline since 2001. After accounting for inflation and population, BC’s program spending increased at an average annual rate of 0.9 percent from 2002/03 to 2016/17—the lowest rate of any province. In Alberta and Ontario, program spending grew at faster annual rates—1.3 percent and 1.8 percent, respectively.
  • If BC had increased program spending at the same rate as Alberta, the province would today be spending approximately $54.5 billion instead of what it actually spent ($46.1 billion). If BC’s program spending had increased at the same rate as Ontario’s, its spending level would have been $55.0 billion—almost $9 billion higher than was in fact the case. If spending increases in BC had grown at the average rate of the Canadian provinces (excluding BC), program spending in 2016/17 would have been $56.4 billion, approximately $10 billion more than the actual figure.
  • From 2001/02 to 2016/17, BC ran nine operating budget surpluses and seven budget deficits, totaling an aggregate surplus of $10 billion over the period. Under each of the alternative spending scenarios, BC’s fiscal outcomes since 2001 would have been dramatically worse.

Returning BC to Prosperity

Historically, British Columbia has enjoyed a high level of prosperity expressed in high incomes, low unemployment, strong investment, and a wealth of opportunities. In a brief decade, the provincial economy has been transformed from a strong, vibrant entity into one characterized by weakness and mediocrity. Only a radical change in government policy will return British Columbia to its traditional place of economic prosperity.

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Over the last decade, British Columbia's economic performance stands in sharp contrast to its historical performance. Given the province's natural resources, access to foreign markets, educated workforce, and traditional level of economic performance

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The central conclusion of the report is that (as of 1998) BC's current economic crisis is a result of policies implemented by the provincial government since 1991. The evidence shows, in spite of claims made by the Clark government, that the 'Asian flu' is not the root cause of British Columbia's economic pain, rather, BC's economic troubles are mainly due to a home grown virus-courtesy of Victoria.

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