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B.C.’s economy has changed significantly since the pandemic, with the sudden onset of inflation and the resulting hikes in interest rates
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The federal government took a hammering during a Conversations Live forum on Tuesday night titled The Economy = Your Money.
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The forum included Jock Finlayson, former chief economist for the B.C. Business Council; Krista Thompson, former CEO of Covenant House Vancouver; Walter Pela, regional managing partner at KPMG in Greater Vancouver; Katrine Conroy, B.C. Minister of Finance; and Murray Leith, executive vice-president and director of investment research at Odlum Brown.
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It was hosted by Stuart McNish, with Vancouver Sun and The Province editor in chief Harold Munro.
All parties acknowledged that the economic climate in B.C. had changed significantly since the COVID-19 pandemic, with the sudden onset of inflation and the resulting hikes in interest rates to try to cool the economy.
“The cost of credit will be higher in the post-pandemic world and we are going to have to get used to that,” said Finlayson, who expects inflation will be at four per cent by the end of this year after peaking at seven per cent.
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He said the federal government’s spending programs were making it harder to get inflation down, adding that Canada was a no-go zone for foreign capital.
Finlayson was particularly critical of the federal government’s decision to heavily subsidize a Volkswagen battery plant in Ontario.
“Spending $16 billion to attract one VW factory is a horrifically bad deployment of tax money,” he said.
“The federal government has floundered in terms of creating a strategy to build an economy. Their idea is to increase population. Immigration is good, but is not the foundation for building a competitive and innovative economy.”
Thompson said that in Vancouver, young people had never seen a recession before and are no longer taking jobs for granted.
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She said she didn’t reach out to the federal government to talk about funding.
“It’s not an effective use of our time,” she said.
Conroy said the provincial government was always lobbying the federal government for support, especially around transportation infrastructure.
She said that while the federal government was responsible for funding for Indigenous housing, the provincial government had stepped in due to some housing that was in appalling condition.
“We have invested in Indigenous housing and we are the only province doing it,” she said. “It’s a fight, we shouldn’t have to drag them kicking and screaming to the table.”
Leith said the federal government needs to focus on encouraging investment in business and technology rather than housing.
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He said the economic outlook is uncertain in B.C., with decent odds there is going to be a recession.
“The stock market goes down the year before a recession and rallies in the year of a recession,” he said.
Pela pointed to a recent Vancouver Board of Trade study that highlighted a recent increase in indirect and direct tax burdens being placed on businesses.
“As a region, we need to look at our competitive advantage as a small and open economy,” he said.
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dcarrigg@postmedia.com
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