What’s next for BC’s economy?
January 15, 2013
This week, Laila and I aren’t in full disagreement. We both agree we need more economic growth. However, Laila seems to have a lot of criteria about how she’d like to see this economic growth unfold. She seems to want more economic growth, more environmental protection, less natural resource dependence and more goods produced here in B.C.
Sounds to me like she wants her cake and to eat it, too.
Read Laila Yuile’s column here.
Our natural resources help make B.C. special and give us an advantage. We also happen to be really good at extracting natural resources, and it generates wealth for our province. In fact, more than half the wealth in this province is generated north of Quesnel.
If we put the environment ahead of the economy, what would it mean for B.C.? It means that either we can harvest fewer trees and mine less, or our forestry and mining products might be more expensive.
Either way that could cause our economy to shrink – meaning fewer jobs and less money for education, health care and police. I’m all for environmental rules, but they must be balanced with economic development.
The idea of becoming less dependent on natural resources is, on the surface, a good one. Diversification of the economy is a sensible step. But it is far easier said than done.
Taking money out of natural resource extraction and trying to set up our own industries that produce goods out of our resources is not easy. B.C. has never been a manufacturing hub. The hard truth is it is often cheaper to take our wood, ship it somewhere else, make furniture there and ship it back to us to sell, than it is for us to make it here.
A quick switch to a manufacturing economy (at the same time as this sector is on life-support in eastern Canada) could be a bad move for the economy, and the government services that economy pays for.
Right now, B.C.’s economy is built on natural resources and service industries. If we believe in diversification why would we favour the service sector over natural resources?
When it comes to natural resources B.C. is like Michael Phelps. We are world champions. Telling Phelps he is too dependent on swimming and should maybe work on his long jump makes little sense, just as it makes little sense for B.C. to turn our backs on natural resources.
Originally published in 24 Hours Vancouver