Modest momentum driving B.C. economy as province set to unveil budget, but questions for the long-term remain

As the province prepares to table its budget, experts say B.C.'s economy is expected to remain moderately strong — based on low unemployment rates and a robust housing market last year — however questions remain over how it will sustain long-term economic growth.

According to Brian Yu, chief economist with Vancouver-headquartered credit union Central 1, B.C.'s economy weathered the pandemic better than most provinces — and he expects the budget to reflect that.

Central 1's economic outlook shows the economy is expected to expand by 3.9 per cent in 2022, after a five per cent increase in 2021, as the province continues to recover from the pandemic.

But it also shows the economy is expected to slow in 2023 and 2024.

"So I think what we're seeing, number one, is likely a balanced budget in my view ... [in] the latest quarterly report even in December they were getting pretty close to that," said Yu.

B.C. Lt.-Gov. Janet Austin's Feb. 8 throne speech outlined the NDP government's priorities on post-pandemic economic recovery, climate change, affordable housing, jobs, reconciliation, child care and land management.

When the budget is unveiled, Yu says he expects to see more investment in climate-proofing infrastructure after wildfires and floods hit the province in November last year, affecting highways and supply chains.

The province has yet to reveal a price tag for repairs to flood-damaged highways, although the federal government has earmarked $5 billion in flood disaster relief for B.C., and Yu says rebuilding costs aren't necessarily negative as "building is generally positive for economic activity."

Last week the province revealed its economic recovery plan, which includes supporting job growth through training and investment, and growing B.C.'s technology, trades and agriculture sectors.

Yu says those efforts support the labour market, but big, resource-based projects are key for economic activity and he questions what kind of investments the government is making on that front as existing projects come to completion in the years ahead.

"I don't think what we've seen is necessarily key levers or drivers of longer-term economic growth," he said.

Businesses look for more support

Nerissa Allen, president and CEO of the Black Business Association of B.C. (BBABC), says she's looking for support for non-profits like hers.

The BBABC offers operational support to Black entrepreneurs and small businesses; during the pandemic, they offered assistance with applying for grants and loans, and developing businesses' social media presence. 

"Most of the traditional grants are focused on cultural activities, which is great, but we need to start to focus on economic empowerment of local businesses," Allen said.

Bridgitte Anderson, president and CEO of the Greater Vancouver Board of Trade, says the province's economic recovery plan lacks detail. She says she wants lower taxes and regulatory reform to help ease the burden of high operation costs.

"There's an opportunity next week with the B.C. budget to look at a whole host of tax reforms and regulatory reforms that the business community has been calling for for some time," she said.

Addressing those issues, she adds, would attract more investment to the province.

Affordable housing

As in previous years, British Columbians will be looking for more investment in affordable housing and measures to help ease the burden of skyrocketing prices. In the past year, housing prices have risen by up to 40 per cent in the Fraser Valley, and up 16 per cent in Vancouver. 

B.C. Green Party Leader Sonia Furstenau says she will be looking for more investment in the budget for housing, in addition to health and mental health initiatives.

"We need obviously more action on the affordability crisis for housing. We need a lot more solutions that are non-market, non-profit solutions, co-operatives as an example," said Furstenau.

Newly elected B.C. Liberal Leader Kevin Falcon said Friday that recent announcements on jobs and the economy, leading up to budget day, are short on detail and lack measurable targets.

Finance Minister Selina Robinson is expected to table the NDP government's budget on Tuesday.