The year 2018 had its fair share of positive news for B.C.’s business community, from stable economic growth to strong employment numbers to the single largest private-sector investment in Canadian history.
However, as we turn the page to 2019, a growing sense of tension and nervousness looms over our province’s employers and job creators. In my recent discussions with CEOs, business owners and members of the Greater Vancouver Board of Trade, it has become clear that many believe we are overdue for a reality check.
Over the past 18 months, governments at all levels have announced a laundry list of tax increases, and 2019 is the year when the impact of those increases will fully hit the business community.
Whether it’s payroll tax increases, property taxes increases, carbon tax increases, Canada Pension Plan contribution increases, federal and provincial income tax increases for managers and professionals or corporate tax increases, the cumulative effect of these new cost increases will be significant.
Not to mention the introduction of new housing taxes that threaten to raise the cost of living in our region, and the new B.C. employer health payroll tax taking effect on January 1, which will substantially drive up the cost of doing business for many – including small businesses and non-profits across the province.
To be blunt, the business community feels the optimistic outlook of the various levels of government has not factored in the impact of their recent decisions. Despite some economic indicators saying we are doing quite well, we fear we are still riding the momentum of recent growth and are thus very anxious about the storm clouds gathering on the horizon.
Admittedly, our economy has had a great run over the past decade. But our concern is that the current 10-year economic cycle will soon run out of steam, at a time when governments are busy piling on new costs to doing business. The confluence of these scenarios would lead to a perfect storm.
Meanwhile, all of this is happening amid significant change in Greater Vancouver. In 2018, there were 16 new mayors elected across the Lower Mainland, who bring new perspectives – and new priorities – to the Mayors’ Council on Regional Transportation. This leadership transition on municipal councils will affect transportation priorities, regional economic development and, of course, the elephant in the room – housing affordability.
But there are some bright spots on the horizon. Perhaps the most notable among them is our growing tech sector here in Greater Vancouver, which promises to create jobs and generate economic activity.
The tech industry was bolstered even further in 2018 when the federal government launched the British Columbia-led Digital Technology Supercluster, an initiative that is estimated to create 50,000 jobs and inject $15 billion in GDP into our provincial economy over the next decade.
We are also very encouraged to see the federal government’s renewed focus on international trade diversification – a theme that both Finance Minister Bill Morneau and Prime Minister Justin Trudeau drove home in their speeches to the Greater Vancouver Board of Trade in late 2018.
As Canada’s gateway to the Asia-Pacific, our region will play a critical role in driving the Canadian economy in years to come – particularly in light of the new Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which was set to take effect on December 30, 2018.
There is much at stake as we peer into the new year. With a federal election slated for this fall and the possibility of a provincial election at any point, 2019 is shaping up to be yet another pivotal year for Canada, British Columbia and Greater Vancouver. •
Iain Black is president and CEO of the Greater Vancouver Board of Trade. He previously served as a provincial MLA and held multiple economic cabinet positions, including minister of labour and minister of small business, technology and economic development.
