B.C. is projected to outperform Canada with robust growth this year and ongoing modest growth thereafter, Finance Minister Michael de Jong said at the close of his annual meeting with the independent Economic Forecast Council.
B.C. economic growth is expected to outperform Canada in the coming years. On average, the council is forecasting B.C. real GDP growth at 3.0% in 2016, 2.3% in 2017, and 2.3% in 2018.
Average forecast growth is higher for 2016 and slightly lower for 2017 and beyond compared to the council’s previous forecast in January of this year. The council also projects B.C.’s real GDP will grow by an average of 2.2% for the 2019-21 period. An updated forecast from the council will be published with Budget 2017.
Discussion at the meeting focused on the B.C. housing market outlook, housing affordability and household debt; uncertainty around the U.S. economy and trade agreements (including the Softwood Lumber Agreement); slowing growth in China and throughout the world; and the importance of export market diversification. Economists also discussed the implications of B.C.’s aging population and the importance of immigration to the province’s long-term labour force and growth potential. Observations from the council include:
- “Looking ahead, we expect B.C.’s labour productivity to exceed the national average because of its advantageous positioning in high-end services and manufacturing, and its in-roads into export markets beyond the U.S….”
- “The impact on the B.C. economy from the slowdown in resale market activity should be tempered by near-record new residential construction and elevated renovation spending…”
- “In the long run, B.C. remains well-positioned to benefit from Asian economic growth, higher population growth, and investments in human and physical capital.”
The Economic Forecast Council includes some of the most respected independent economic forecasters in Canada. The 13-member council's mandate — as determined by the Budget Transparency and Accountability Act — is to provide economic advice to the Minister of Finance in advance of each year's budget and fiscal plan.
Minister of Finance Michael de Jong —
“B.C. remains well-placed to outperform the country in economic growth, but that growth is modest, which means we must continue to take a balanced fiscal approach and diversify our provincial economy and our export partners.”
“The importance of housing affordability to a strong local economy was a consistent theme, and it is reflected in the significant investments our government is making to ensure British Columbians have access to appropriate housing options.”
A backgrounder follows.