||Volume 17, Number 2, October 2004
Uneven economic growth
As Finance Minister Gary Collins makes his round of talk shows promoting the First Quarterly Report, he is claiming that B.C. is experiencing "broad-based" economic recovery. A lot of people disagree with that. Rather than rely on anecdotal evidence, we can turn to employment data by industry from Statistics Canada’s Labour Force Survey.
Since May 2001, employment has fallen by 26,000 in "education services," employment has fallen by 9,000 in "trade," and employment is down by 2,200 in the combined resource industries of "forestry, fishing, mining, oil and gas." The Campbell government would no doubt argue that one needs to look at the recent picture rather than at the past three-and-a-half years. When August 2004 is compared with August 2003, employment is down by 9,800 in education, down by 17,500 in trade, down by 6,000 in the resource industries, and down by 5,400 in manufacturing.
B.C.’s economy has some hot spots and some very cold spots. Construction, driven by low interest rates, is booming. Tourism has made some recovery, as shown by employment gains in "accommodation and food services." Although the service sector accounts for almost 80% of total employment, it has accounted for less than 50% of the job growth, both in the last 12 months and in the last three-and-a-half years. Construction alone accounts for three-quarters of the total job gain since August 2003. That is not broad-based growth.
Compounding the uneven economic growth by industry are regional disparities. Small communities in B.C.’s Interior are hurting. The Campbell government’s forestry policy that ends the practice of tying fibre supply to specific mills raises the spectre of more ghost towns.
Collins is doing his best to spin a myth that B.C.’s expected surplus is due to a robust economy. When asked about his tax hikes and service cuts, he responds with jargon about the need to put our fiscal house in order. Those who are paying $1,000 a year more in MSP premiums have every right to think that their payments created the surplus. Those who are looking at higher heating bills are unlikely to think it’s great that the government is getting a windfall profit from higher natural-gas prices. No amount of political spin will hide the fact that the expected surplus is due to tax hikes, service cuts, and high natural-resource prices. The Campbell government may get a few cheers from the six-figure set, who reaped the big tax payoff, but most British Columbians have a sense that the gains and the pains were not fairly distributed.
© David Schreck, StrategicThoughts.com