When examining the outlook for key components of British Columbia’s economy, moderate seems to be the adjective of choice with the economy, population increases and inflation on track to achieve, moderate growth. Yet British Columbia continues to enjoy its position as one of the top performing provinces in the country.

As a major trading partner, the US and its softening economic outlook could have a significant impact on the province’s economic growth; however the province’s diversified export market (primarily growing trade with Asia) should help to shield the provincial economy from an economic downturn in the US.

Economic Highlights and a Look Ahead at 2008

• The Province of British Columbia is Canada’s gateway to the Asia-Pacific.
• The province is Canada’s third largest generator of hydro electricity, providing one of the lowest power costs in North America, as well as being the second largest natural gas provider, with the oil and gas industry continuing to grow at a tremendous rate.
• BC offers some of the most modern education, transportation and telecommunications infrastructures in the world.
• New industries that are experiencing strong growth include eco-tourism, agri-tourism, film and high tech.
• Small business makes up over 98 percent of the province’s businesses and now employs over one million British Columbians (as of July 2006 the province’s population reached 4.31 million).
• BC is the third largest film and television production centre in North America after New York and Los Angeles, directly employing roughly 35,000 people. Indirect jobs generated by this industry fuel the construction, tourism and small business sectors.
• Finance Minister Carole Taylor’s 2007 provincial budget came with a 10 percent cut to personal income tax for those earning up to $108,000/year. British Columbians now boast the lowest provincial income tax rate in Canada.
• The budget also allocated $2 billion over the next four years for a housing strategy, including raising the threshold for first time home buyers to $375,000 and the homeowner grant threshold to $950,000 from $780,000.
• The December 2007 seasonally adjusted unemployment rate in BC was 4.2 percent, compared with a 5.9 percent national average and down from 5.2 percent in December 2006.
• While net exports, particularly lumber and wood products, are declining and expected to continue this downward course in 2008, consumer, government and investment spending on the domestic side of BC’s economy is keeping the province on pace.
• BC’s economic growth is predicted to be about 2.8 percent in 2008, slightly outpacing the national projected growth rate, with the best performing industries being construction (bolstered by Olympics related building), mining (excluding oil & gas) and trade. Industries expected to post below average growth include forestry and logging, wood and paper manufacturing, agriculture, education and health services.
• We should see a tightening of the labour market, a slightly higher overall inflation rate and a rate of inter-provincial migration that is expected to remain strong for the fifth consecutive year.
• The relentless strength of BC’s housing market, which has witnessed several years of double-digit housing price increases, should show more moderate to normal growth of 10 percent per year for the next two to four years.

Spotlight on Mineral Exploration in BC

• BC’s mineral exploration in 2007 surpassed the record-setting high of 2006, climbing to nearly $416 million. This represents a 57 percent increase over 2006 and 1,300 percent increase over 2001.
• The BC mining industry reported incredible earnings of $1.8 billion in 2005 compared to net earnings of $871 million in 2004. Gross revenues for 2005 reached a staggering $6.3 billion.
• Seventeen percent of the total amount spent on exploration in Canada in 2007 was spent in BC, compared to just seven percent in 2000.
• This boost in exploration spending comes on the heels of a global commodity boom that could endure for another 15 to 20 years, high international commodity prices and interest in BC’s coal and mineral resources.
• Increased mineral exploration has provided an exceptional boost to the province’s economy, and when this leads to mines it creates well paying jobs and helps build strong, vibrant communities.
• More than 100 exploration projects had budgets in excess of $1 million, representing a 42 percent increase over 2006.
• The number of people directly or indirectly employed by the mining sector reached 28,000 in 2007.
• Over 850 mining development and exploration companies have an office located in Vancouver.
• Major minerals produced in BC as a percentage of Canada’s total production are as follows: Coal (66%); Copper (40%); Silver (50%).
• Coal represents one third of industrial traffic at the Port of Vancouver (the largest port in Canada).

Excitement is building as BC prepares to welcome the world at the 2010 Olympic and Paralympic Winter Games. Situated between the Pacific Ocean to the west and the magnificent Rocky Mountains to the east, BC offers breathtaking landscapes and geographic diversity that supports a vast range of activities and adventure. The province is renowned for its mountains, rivers, forests, parks and lakes, as well as its world-class ski terrain. In fact, it is the only province where the outdoor enthusiast can golf and ski in the same day!

Key economic drivers include strong employment gains, healthy consumer spending, steady housing activity and continued strength in non-residential construction. Other drivers of the provincial economy include continued demand for BC's natural resources, growing trade with Asia and the provincial government's improved fiscal position. Taken together, these elements of the provincial economy help to secure British Columbia’s place among the best performing provinces in the nation.