COLUMN

Visible assets fuel an economy

British Columbia’s natural beauty underpins the province’s wealth and its hopes for future prosperity

DIANE FRANCIS August 24 1992
COLUMN

Visible assets fuel an economy

British Columbia’s natural beauty underpins the province’s wealth and its hopes for future prosperity

DIANE FRANCIS August 24 1992

Visible assets fuel an economy

COLUMN

British Columbia’s natural beauty underpins the province’s wealth and its hopes for future prosperity

DIANE FRANCIS

British Columbia’s most valuable asset is not its coal, timber or mineral potential. Its riches are mostly rooted in the fact that it is postcard pret-

ty. The province is miles and miles of stately mountains, trees, lakes and mighty rivers that are stunning to behold. Even its major cities—Vancouver and Victoria—are among the world’s most beautiful ports. Then there is its enviable lifestyle, with its moderate climate and access to many outdoor activities in fabulous surroundings. This has made it a chosen retirement haven for Canada’s aging population. All of these blessings mean that the province will remain one of the richest regions in Canada, and the world.

That is not to say that mismanagement could not ruin this wonderful advantage. After all, people cannot eat scenery. And forestry—the perceived engine of economic growth—sputters due to overzealous environmental regulations and inefficient operations. But the province, diversified into other areas of economic endeavor, has outperformed, and will continue to outperform, Canada’s economy as a whole in the shortand medium-term. That is because beauty, not resources, is becoming the province’s real engine of economic growth.

This means that British Columbia is one of the luckiest places on earth. After all, coal, timber or minerals can be exhausted or the cost of exploiting them can be too high. Manufacturing giants come and go, becoming inefficient or obsolete or uncompetitive. But unsurpassable scenery is a renewable, limitless “resource” for all eternity, which attracts people and their money. And tourism can prosper forever, providing that the waiters, hoteliers, bartenders, restaurateurs or their unions don’t price themselves out of competition.

Postcard prettiness is already spurring growth spontaneously. Migrants, often retirees from other colder parts of Canada, stream into this La La Land spending their savings and pensions on services, products, travel and housing.

Immigrants from Hong Kong and elsewhere in the world pour into British Columbia’s cities and towns, buying property, groceries and the good life. Tourists clamber to ski, fish, hike, drink, eat, gamble and be merry in surroundings as beautiful as any in Switzerland. Tourism contributes $4.5 billion each year, according to a report by the Investment Dealers Association of Canada, and since 1986 has grown at the rate of eight per cent each year. Last year, some five million tourists visited the province and visitors from Japan formed the biggest single group from overseas.

Then there is permanent migration, as the population of the country continued to shift westward, along with economic activity. Total net migration (foreigners and fellow Canadians) in the year to June, 1991, added more than 64,500 people. Of net new arrivals, more than 40,500 came from other parts of Canada, the rest from foreign countries. Since 1971, British Columbia has grown from 2.2 million people to 3.3 million in 1991, outpacing dramatically the rate of population growth for the country as a whole. Canada grew to 27.3 million in 1991 from 21.6 million in 1971.

Of course, not everything is rosy. British Columbia may be North America’s Switzerland

and Vancouver Island Canada’s Florida. But Vancouver has also been the Amsterdam of the Western Hemisphere—a port that has attracted sleazy elements from fly-by-night stock promoters to drug smugglers. There is also British Columbia’s wacky politics. Two out of its three previous premiers have been charged and dragged through embarrassing trials for all the world to see, before eventually being acquitted.

Forestry—considered the province’s engine of growth because it represents 18 per cent of employment directly and indirectly—has serious problems. In 1991, the B.C. forestry industry lost a record $869 million on revenues of $10.9 billion and may lose up to $500 million this year. While losses can be overcome with higher pulp, paper or timber prices—or a lower Canadian dollar—other problems facing this industry are obsolescence, U.S. protectionism and greedy unions. Price Waterhouse’s Michael MacCallum estimates the B.C. industry needs to spend as much as $10 billion to catch up to its U.S. competition over the next few years. While large, forestry’s problems are not insurmountable, given the correct political will, union realism and less onerous environmental guidelines.

Despite problems, estimates are rosy. British Columbia’s gross domestic product, or the total value of its goods and services, grew to $83.4 billion in 1991 from $48 billion in 1983. And in 1992, as other provinces barely recover from the recession, the B.C. economy is growing. The Canadian Imperial Bank of Commerce estimates that the province’s economy will increase by 2.9 per cent in 1992 and 3.9 per cent in 1993 compared with the country’s average of two per cent this year and 3.7 per cent next year. The Investment Dealers Association of Canada estimates a three-percent growth this year for British Columbia and the Conference Board of Canada suggests it will be the only province this year to experience any strong recovery.

Another reason for the growth is that, although the Socreds’ performance running the province was checkered politically and they have been turfed out of power, their track record in terms of government management is the best in the country. The provincial debt of $9.8 billion represents only 12 per cent of gross domestic product compared with the provincial average debt equivalent of 21 per cent of gross domestic product. This translates into lower personal, corporate and commercial taxes than most other provinces, plus no general tax on business capital or payrolls. But the spendthrift New Democrats are a worry with their deficit mentality.

“The fiscal position of British Columbia is in far better shape, reflecting conservative fiscal management through the boom 1980s,” says the Investment Dealers Association report. “Manufacturing and service sectors have broadened and diversified through the 1980s. Closer economic links with Asian markets, better access to U.S. markets through the Free Trade Agreement and the entrepreneurial drive provided by immigrants have been positive factors.”