The potential of an NDP-Green minority government is likely to add to what the Chartered Professional Accountants of B.C. have already prognosticated for 2017 as having uncertain economic prospects.
The uncertainty was illustrated in the CPABC’s annual economic report of the Thompson Okanagan Development Region, publicly released May 24.
The report cited the loss of about 11,500 jobs in the region’s manufacturing, transportation and trade industry sectors.
“Prospects for 2017 remain uncertain. A continued low Canadian dollar relative to the American dollar should continue to benefit our region’s tourism industry,” said Karen Christiansen, a partner at MNP LLP accounting office in Kelowna.
‘An expected, albeit slow, recovery in commodity prices and Alberta’s economy will also have a positive impact on our economy.
“However, with the renegotiation of the North American Free Trade Agreement ahead and a potential sift to a protectionist economy south of the border and in other parts of the world, it is unknown whether our economy will grow in 2017.”
Other economic prognostications since the start of the year have generally taken a more positive outlook for stable growth this year, but that was before the provincial election results, the U.S. imposing lumber import countervailing duties and now a political battle over the Trans Mountain pipeline proceeding with the pending new B.C. government on one side and Alberta and the federal government on the other.
Still, the Canadian Federation of Independent Business, said its own Business Barometer index survey found optimism among small business owners rose 2.3 points in May to 69.4.
The gain in May helped B.C. climb to the top of the rankings among provinces across Canada, 1.2 points above Ontario, next at a 68.2 rating.
An index of between 65 and 75 is indicative that the business community sees the economy growing at its potential.
“It is encouraging to see B.C. back on top. The past couple of months have a shown a strong upward trend, with more entrepreneurs expecting to grow their business,” said Richard Truscott, vice-president of CFIB, Alberta and B.C.
“Although business owners remain confident about the future, in B.C’s uncertain political landscape, it is critical all political parties work together to support the small business community and keep the economy growing.”
In its economic analysis, the CPABC said the transportation job losses, particularly in the trucking industry, could be due to a ripple effect related to Alberta’s wildfires and economic downturn, while over half the job cuts in the manufacturing sector were related to wood product manufacturing.
“This was surprising, given an increase in the region’s softwood lumber production in 2016. One possible explanation could be that the manufacturing activity occurred in neighbouring regions like the Cariboo or Kootenays,” stated the report.
Another unexpected loss was in the retail trade industry sector, as the region’s tourism activity remained positive and there was an overall increase of 6.4 per cent in retail sales across the province.
A further bleak point cited in the report was the region’s decrease in the value of capital investment projects.
But Christiansen noted there were some economic bright spots in 2016 as the region population grew by 3,766 residents.
“The increase was largely due to an influx of people from other provinces like Alberta and Lower Mainland residents cashing out on their properties and relocating to our region,” she said.
“This stimulated a surge in housing sales, new housing starts and construction employment,” Christiansen said.
“In addition, we had another busy year in terms of tourism and agricultural activity, and three of our region’s mines reopened.”
The Okanagan-Thompson region takes in five regional districts—Okanagan-Similkameen, Thompson-Nicola, Central Okanagan, North Okanagan and Columbia-Shuswap—and has the third highest region population in B.C. next to Vancouver Island and the Lower Mainland.