Skip to content

B.C. can't escape global economy

The B.C.

The B.C. government's new jobs "plan" has a number of good elements to it, but does anyone really believe that given the calamities afflicting the world economy that many of those new jobs will materialize anytime soon?

British Columbia does not exist in a bubble and is not immune to the severe ups and downs going on elsewhere. Our economy depends a great deal on world markets, particularly those in the United States, where the economy continues to struggle mightily.

To her credit, Premier Christy Clark's jobs plan - dubbed "Canada Starts Here" - is a relatively modest one that does not set some kind of lofty job creation target. She only promises that B.C. will be either first or second among provinces in economic growth by 2015, which doesn't necessarily translate into strong growth (just enough to outdistance other provinces affected by the same external problems as B.C.).

The details of the plan are fine, as far as they go. More money for the Ridley Terminal in Prince Rupert? Sure, that won't hurt. Eight new mines within a few years? Sounds good.

Increase our trade with Asia and particularly China? Well, why not?

Although her plan contained more nuggets than most observers thought before her big speech last week, they still don't add up to a huge, expensive initiative.

In fact, the guts of her plan are more process-oriented. Cutting red tape (didn't the B.C. Liberals promise to do just that in 2001?) and speeding up approval processes for industrial projects is the foundation of the jobs plan.

The theory, of course, is that if government bureaucracy gets out of the way, investment dollars will begin to flow B.C.'s way in earnest.

The trouble with this scenario, however, is that investment dollars around the world may be drying up.

Senior statesmen like British Prime Minister David Cameron have expressed gloomy fears of two more years of economic misery, and U.S. President Barack Obama finds himself leading a country that is completely devastated in some regions by huge unemployment levels that show no sign of coming down anytime soon.

Europe itself is teetering on the edge of the collapse of its currency system, as Greece, Italy, Spain, Portugal and Ireland lurch toward outright defaults on their massive debts. China has begun pulling back on its international trade to lessen its exposure to external problems.

As a result, stock markets are recording spectacular rises and falls (mostly the latter, unfortunately). Collectively, this is not a minor economic hiccup. This has all the earmarks of another global economic crisis, one that may be more serious and more entrenched than the 2008 meltdown.

And in the midst of all this comes little B.C., whose gross domestic product is about the same size as the GDP of the states of Louisiana or Alabama, touting a new jobs plan. Ironically, on the same day Clark touted the creation of eight new mines, commodity prices nosedived. That's a reminder of how fragile things are right now and why assuming investment dollars are going to magically materialize is not a reasonable bet right now.

Further hampering B.C.'s economy in the short-term is the lingering hangover that goes with getting rid of the HST. The housing and home repair sectors, in particular, may be hard hit because many consumers will put off building a house or doing major renovations until the tax is gone, more than a year from now.

Now, none of this is to say Clark and her government shouldn't do anything to create jobs. In fact, her government is already engaged in a fairly hefty stimulus exercise, spending almost $10 billion over the next few years to build such things as the Port Mann Bridge, the South Fraser Perimeter Road, new schools and health facilities, and massive upgrades to B.C. Hydro's infrastructure. The jobs that flow from that kind of capital spending will likely dwarf anything created by the new jobs plan, at least until the world economy is on much, much safer and firm footing.

The best thing Clark can hope for from her plan may actually be more about using it to turn political discourse in this province towards the issues of the economy and employment.

Even if there's a downturn, it may work to Clark's advantage. The NDP always seems to struggle in winning the trust of the voters on the critical issue of managing the province through difficult economic times.

Canada Starts Here may be a catchy slogan, but until the world economy settles down it may be little more than that.

Keith Baldrey is chief political correspondent for Global B.C.