The BC Economy: Whose Numbers?

With BC's hotly contested election campaign in its final week, the BC Liberals shout ever more loudly their main message: We fixed the economy! But several reports released in the last week, including from Statistics Canada and the Social Planning and Research Council, bolster those who argue the economy isn't better than in the 1990s, and the Liberals have nothing to do with the recent improvements, and in fact have hindered economic recovery.

Statistics Canada released its final summary of BC's economic performance for the year 2004 showing in fact it has improved in the past year to the point of where it roughly was during most of the 1990s, while the NDP was in government. But one day earlier, the Social Planning and Research Council released its summary report on homelessness and poverty in BC showing that the "dismal decade" is in fact now, under the Liberals.

Falling earnings

In some of the Liberals' TV spots, actors pretend to be workers returning to BC praising the premier for what a good job his regime is supposedly doing. "It's time to feel good that BC is finally working again," says the closing line. Meanwhile, reports in Liberal-friendly news media talk about the "lowest unemployment rate in decades." Gordon Campbell repeatedly thundered over and over again on the May 3 televised leaders' debate, "we created the ground for prosperity."

They did?

First off, Statistics Canada says nothing about the supposed huge influx of people "returning to BC." In fact, according to Statscan reports over the last few years, it seems, despite media claims of "brain drains" and "mass exodus" in the late 1990s, there never were very many more people leaving BC than arriving, and, furthermore, in terms of total migration, BC enjoyed an immigration boom throughout the 1990s and has experienced a net growth every year right through to today.

Secondly, the BC Stats web site shows annual unemployment is still hovering well above the seven per cent mark. In addition, looking at unemployment stats from Statistics Canada, it appears BC's annual jobless rate has hovered roughly from the seven to nine percent mark since 1992, and in the 1980s, it was much higher -- often hitting well into the teens. Therefore, "lowest" rates in decades means little.

Furthermore, these agencies report that real average weekly earnings in BC have fallen by almost two per cent since the Liberals took office, and most wage rates are now not keeping up with inflation. Overall consumer spending has fallen since the 1990s; consumer savings are lower as well, and consumer debt is at an all-time high. The Canadian Centre for Policy Alternatives reports even capital spending, the supposed saviour of our economy according to the Liberals, still hasn't reached the levels of the 1990s.

Homelessness doubled

Add to this, the SPARC report shows homelessness has almost doubled in the last four years, and the services and affordable housing programs are no longer there to deal with situation. Similar reports have shown how poverty, especially among youth and the disabled, is growing.

So much for the Liberals being good economic managers.

Yet we keep hearing the 1990s called the "dismal decade", despite the obvious fact that BC enjoyed more economic prosperity during those NDP years than today.

Statscan reports BC's real GDP, as in the rate the total wealth output of the economy unaffected by things like immigration and inflation, in 2004 was 3.9 per cent, better than even what the Liberals are claiming. Yet this is after three years of being well under three per cent. More importantly, this one-time high GDP figure is not much more than BC's annual real GDP of around 3.1 per cent throughout most of the NDP years of the 1990s, and well below the record 4.6 per cent in 2000.

Similarly, average yearly job growth was about 2.2 per year during the NDP tenure, compared to only 1.6 in the last four years.

Furthermore, during the 1990s, BC's high job creation rates were largely offset by an immigration boom that often grew faster than the GDP and the economy. That's why the unemployment rate stayed at the rough seven to nine per cent constant.

Today, after four years of Liberal austerity, that immigration rate has tapered off. Yet the jobless rate has hardly changed at all.

Those NDP years

So what is fuelling the so-called "boom" in the last year? The recent rise in global commodity prices and 50-year low interest rates, along with the federal Liberals, after a series of grueling transfer payment cuts in the 1990s, is putting money back into provincial coffers.

Surveys by the major chartered banks this year have listed some of these as the main reasons for BC's recent moderate economic improvement. None of them are giving credit to any of the major policy initiatives of the BC Liberal regime.

And this is a key point. In the 1990s, BC had a strong economy without the benefits of record high commodity prices and record low interest rates and while having to endure huge funding cuts from the federal Liberals. This is because the NDP government engaged large amounts of public funds and resources in stimulating job creation. The BC Savings Bond program, as an example, was invested in the construction of schools, hospital, highways and other public infrastructure all over the province. In addition, the government of that day invested directly in the development of new economic sectors, such as film and high tech, and fostered the development of clean energy and engine technology, as well as comprehensive recycling programs and tourism.

This is exactly the opposite of what the Liberals have been doing: Raising taxes and user fees while cutting the very services people are paying taxes for; laying off thousands of people, closing schools and hospitals and other vital public infrastructures; cutting wages; removing local job protection measures for logging; gutting collective agreements, pressing on with privatization schemes, and introducing special low minimum wages and child labour provisions do not create economic growth or prosperity. They can make a small wealthy and well-connected elite that much more wealthy and powerful. But everyone else always suffers.

When May 17 comes around, voters will be asking themselves whether they are better or worse off than four years ago. The Liberals offer their numbers and some different ones can be found here. We'll see which ones reflect the experience of most British Columbians.

Marco Procaccini is a Vancouver journalist who writes for The Columbia Journal and other publications.