Ministry of Finance

Strategic Context

In 2007, British Columbia’s economy continued its strong performance after three straight years of over 3 per cent growth. The province’s real gross domestic product (GDP) grew an estimated 3.0 per cent in 2007. British Columbia’s strong pace of consumer spending and investment offset weakness in the province’s export markets.

British Columbia employment grew faster than the province’s labour force in 2007, pushing the annual unemployment rate down 0.6 percentage points to 4.2 per cent. This is the lowest annual rate of unemployment in more than 30 years.

The provincial government continues to implement sustainable fiscal management policies with its fourth consecutive surplus forecast for 2007/08. The importance of the province’s sound fiscal management is recognized by international credit rating agencies. Moody’s Investor Services, for example, is maintaining British Columbia at the coveted Aaa rating.

A diversified and robust economy, together with balanced and effective provincial fiscal management practices, puts British Columbia in a strong position to meet the ever changing challenges and opportunities that the province faces into the future.

Key Initiatives

Fiscal Sustainability — Prudent fiscal management and a growing economy will allow government to meet the priorities of British Columbians in the long-term. Treasury Board will continue to ensure the responsible allocation of the province’s financial resources within the policy framework set by government.

Economic Sustainability — While a provincial unemployment rate at 30 year lows brings many economic benefits, government is currently dealing with the challenge of a growing shortage of labour, particularly in highly skilled trades and professional areas. Other challenges faced today include a softening US economy, the strong Canadian dollar, high oil prices and the effects of the mountain pine beetle. Looking ahead, the province will continue to work to enhance the province’s economic competitiveness and adapt to the needs of an aging population and to the opportunities provided by growing international markets.

Key Economic Development Opportunities

British Columbia is in many ways uniquely positioned to meet approaching challenges as well as take advantage of potential opportunities.

Asia-Pacific Location — British Columbia is naturally situated to connect existing North American markets with rapidly growing Asian economies. The province’s plan to develop a world class infrastructure will provide the land, air and sea links essential for the efficient movement of products to and from the immense markets of Japan, China, India and the rest of the Asia-Pacific region.

Increasingly Diversified Economy — While traditional resources sectors remain an important part of the provincial economy, British Columbia is evolving into an increasingly diversified economy. The ongoing expansion of non-resource sectors such as tourism, film and various high-tech activities will enhance the province’s ability to weather downturns in international commodity markets.

Diversified Trade Markets — Significant growth in China and other Asian economies helps broaden the market for British Columbia’s goods exports. The Pacific Rim is the destination for more than one-quarter of British Columbia’s international goods exports. Greater diversity in export markets will help to limit the effects of possible downturns in one or more of the province’s traditional export markets.

Highly Educated and Healthy Population — A major underpinning of the provincial economy is British Columbia’s highly educated and healthy population. The province’s education and training system provides the province with a highly literate and well trained workforce that can meet the changing demands of the global economy. Access to a superior public health care system is one of many factors that supports the high quality of life enjoyed by British Columbians and helps to attract people to the province. Attracting high caliber immigrants is an important source of new workers as the province’s workforce ages.