April 16, 2005

BC Economic Growth

For those who don't read the Toronto Globe & Mail, it recently added three pages for BC that are tacked on to the front of the sports section. In its online edition those stories appear in the "across Canada" section. In a fashion that is usually reserved for the CanWest Empire, the Globe's Gary Mason's April 15th column appeared under a headline: "James and her party face a virtually unwinnable election battle."

Mason offered what he called "some facts" which were selective statistics that are sometimes used by the Liberals when they badmouth the record of the former government. Among Mason's "facts" was the assertion that "B.C. lost about 175,000 people who moved to other provinces between 1996 and 2001." According to BC Stats 328,812 people moved from BC to other provinces from January 1996 through December 2001; during that time, 296,595 people moved from other provinces to BC. Mason not only overlooked the inflow but he was no where close with his outflow figure. Of course population change consists of more than inter-provincial migration. When international net migration, births and deaths are taken into account, BC's population increased by 7% between January 1, 1996, and December 31, 2001. To hear the Campbell Liberals, and writers like Mason, one would think BC lost population.

Between 1991 and 2001 BC's population increased by 21% while Canada's increased by 11%. During that period BC's real GDP increased at an average annual rate of 2.8%, the fourth highest province, but because population grew almost as fast as real GDP, BC's per capita real GDP grew by slighly less than 0.9% between 1991 and 2001. That would be bad if it were a long term trend, but it is not. It simply reflects the phenomenal population growth that BC experienced in the 90s, 1.9% average annual population growth compared to Canada's 1.0%. BC's population growth has returned to the Canadian average so by maintaining the same average real GDP growth that was experienced in the 90s, real per capita GDP now increases. Some would argue that the population growth of the 90s helped to stimulate economic growth in the next decade on things like housing. One way or the other, forecasts for BC's economic growth are only slightly better for the next three years than was the average in the 90s and no year is expected to reach the 4.6% real GDP growth that BC experienced in 2000.

Objective observers know that the data show consistent growth of inflation adjusted (real) GDP between 2.8% and 3.0% no matter which five year period is examined between 1990 and 2004. The NDP wants that growth to continue just as much as any other party; it primarily depends on external factors including interest rates and commodity prices.

BC voters will determine whether James and her party face a winnable election battle. That battle won't be any easier if usually respected sources of news engage in selective reporting of statistics. The truth is that the Campbell Liberals overstate their performance and understate past performance. BC's economic growth has little to do with the policies of provincial governments and much to do with external forces. For 15 years it has shown remarkably steady growth averaging near 3% per year.