On November 9th Statistics Canada released revised gross domestic product (GDP) figures for the provinces and territories. Although the revision yielded slightly higher numbers for business investment in machinery and equipment, the figures still do not support the latest government ad campaign. You may have noticed that the smiling college students in the Achieve BC ads have been brushed aside in the latest version of the ad that boasts about investment. The Campbell government won't win any awards for truth in advertising. The initial government ads contained misleading claims about job growth. This time the ads would have viewers believe that BC is overwhelmed with new investment.

The key component of investment is new machinery and equipment. In the words of BC's Progress Board, "Significant and ongoing business investment in machinery and equipment is essential to ensure that a region is constantly adapting and restructuring itself - necessities for any economy that hopes to remain competitive." The graph shows business investment in machinery and equipment from 1996 through 2003. Preliminary data for 2004 won't be available until the end of April 2005. The red line shows the inflation adjusted data; the blue line shows the data in constant dollars. Between 1997 and 2000, investment in machinery and equipment increased by 18.0% in current dollars, 20.7% in inflation adjusted dollars. Between 2000 and 2003, investment DECREASED by 3.3% in current dollars, but it increased by 10.1% in inflation adjusted dollars. That strange outcome suggests that the cost of machinery and equipment declined so that more real goods were purchased even though fewer current dollars were spent.

The government that constantly refers to the 90s as a "lost decade" is overseeing an economy that isn't performing half as well in terms of business investment. That doesn't stop their TV ads which try to create the opposite impression.