Population gain in 2005 was higher that of Alberta and Manitoba combined
Richard Rees
Sun
Booming economy coupled with natural beauty lures Canadians from other parts of the country. Photograph by : Ian Smith, Vancouver Sun
When assessing British Columbia as a place to live, work and invest, there are very few measures that capture the economic health of our province as well as migration numbers. That’s because people vote with their feet and come to the province where they believe they have the greatest opportunities.
According to the 2006 BC Check-Up report, published this month by the Chartered Accountants of B.C, people are voting for B.C. in large numbers.
In 2005, B.C. gained 40,816 new residents — an eight-year high –from both international and provincial sources. The population increase for B.C. was 26-per-cent higher than Alberta and Manitoba combined.
Last year also saw more people move into the province from other parts of Canada than move out, with a net gain of 7,456 people. It was the second consecutive year of net gains in inter-provincial migration, after experiencing six consecutive years of losses. All indications are that B.C. will register another strong inflow of people from other provinces this year.
Our natural beauty and quality of life are obvious reasons why people want to live here, but our economy is ultimately what brings people here or motivates them to leave. In fact, inter-provincial migration is generally influenced by the economic and labour market conditions of B.C. relative to the rest of Canada.
The BC Check-Up report helps to put these population numbers in perspective. It showed that our province has a thriving economy, which grew by 3.5 per cent in 2005, ahead of the national average of 2.9 per cent. B.C.’s economy is on track for an even stronger performance this year. The Royal Bank expects B.C.’s economy to grow by 4.0 per cent this year, compared to 2.8 per cent nationally, and forecasts B.C. to outperform the Canadian average through 2008.
Another benefit of our economic growth outpacing the nation is that incomes are rising faster than the Canadian average. B.C.’s real personal disposable income (i.e., after taxes and inflation) in 2005 was $913 higher than in 2000 — an increase of 4.1 per cent, and ahead of the 3.1 per cent increase across Canada. The province’s strong economy suggests that further gains in disposable income are on the horizon, adding to the province’s attractiveness.
The economic growth has also benefited businesses. After years of stagnation, we are now seeing some good growth in corporate profits in B.C. According to the BC Check-Up report, B.C.’s after-tax corporate profits, as a share of private sector GDP, increased by 55 per cent between 2000 and 2005, compared to 25 per cent growth across Canada. The increased profitability means that companies have more money to invest and hire employees.
The report found that B.C. led all provinces in job growth in 2005, recording a 3.3 per cent year-over-year increase and adding 67,800 jobs. This represented 30 per cent of all new jobs created in Canada in 2005.
Not only did we see a 30-year low in the unemployment rate last year, it was also the first time since 1997 that B.C.’s rate bettered the national average.
B.C.’s employment situation has continued to improve in 2006, and our job growth continues to exceed the nation. In September, B.C.’s unemployment rate dropped to just 4.8 per cent, compared to 6.4 per cent across Canada. In fact, with an unemployment rate below five per cent, the issue for B.C. now is finding enough skilled workers to fill jobs.
With continued economic strength, B.C. can expect to keep attracting more people from other parts of Canada.
Unfortunately, the BC Check-Up report was not all rosy. Among the concerns in B.C. is the high cost of housing and its impact on personal debt levels. B.C.’s personal debt levels rose by six per cent last year, primarily due to rising mortgage debt. In fact, the study found that mortgages comprise 75 per cent of B.C.’s total personal debt, compared to between 55 to 68 per cent in other provinces.
While mortgage debt is not altogether bad, since it is for an asset, affordability is a concern as B.C. is the most expensive province in Canada for housing, and Vancouver is the 15th most expensive city in the world.
High housing costs make it more difficult to entice people to move to B.C., and this is a concern in today’s competitive labour market.
There are also concerns about the current state of the U.S. economy, particularly with its housing slump and its impact on B.C. wood exports.
However, overall, the BC Check-Up report found that B.C.’s economy continues to be strong, and our province remains a very desirable place to live, work and invest.
Richard Rees is chief executive officer of the Institute of Chartered Accountants of British Columbia.
© The Vancouver Sun 2006