September 26, 2002

Faltering BC Economy

Cheerleaders for the Campbell government would have you believe that the BC economy is taking off thanks to confidence inspired by tax cuts and deregulation. Numbers released by Statistics Canada this week show that hard data are not available to support that claim.

Statistics Canada released data from its Employment, Earnings and Hours survey on Wednesday. The preliminary payroll employment for BC in July was up 3,900 to 1,610,100. Up is better than down when it comes to the employment numbers but payroll employment for July 2002 was just 1.2% higher than it was in July 2001. The BC payroll growth from June to July was only half the Canadian rate. The payroll employment numbers stand in contrast to the 15,900 person increase in employment (including self employment) as measured by the Labour Force Survey between June and July.

The government is fond of exaggerating the increase in employment by pointing to the Labour Force Survey since December 2001 when it bottomed out. The increase from July 2001 to July 2002 was 34,300 (1.8%) measured by the Labour Force Survey and 11,800 (1.2%) measured as payroll employment by the Employment, Earnings and Hours survey. Focusing on those lower annual rates might be one reason why Finance Minister Collins showed no increase in forecast income tax revenue in his First Quarter Report.

This week Statistics Canada also released data on the number of employment insurance beneficiaries. In July 2002 the number of beneficiaries increased by 3.8% in Canada and 8.2% in BC relative to July 2001. That is not a good thing.

The Statistics Canada data on retail trade has shown strong growth in BC for almost three years; however, the numbers for July recorded a 1.7% drop relative to June. That took the annual growth rate down to 5.2% for BC compared to 6.5% for Canada.

Gordon Campbell has bet the farm, more accurately he has bet the welfare of more than 4 million British Columbians, on his assumption that he could cut taxes, deregulate and just stand back and watch the economy grow. He may have been wrong.