2012 BC Check-Up

In a year marked by on-going global economic uncertainty, BC’s economy held its own in 2011.

The province enjoyed a second consecutive year of strong export growth (13.9%) due to high

commodity prices. While export demand from the European and US markets was subdued -

due largely in part to their weakened economies - this was more than offset by growth in

the Asia Pacific markets, and BC’s exports rebounded to their pre-recession levels last year.

In addition, BC’s real GDP grew by 2.9% in 2011, and further gains were made in the first

quarter of 2012.

However, no one lives in a vacuum. Last year, investors in BC, and around the world, faced

growing uncertainty due to the European Union financial market crisis and ongoing US

economic stagnation. This continues to be the case in 2012, as the world waits to see how the

EU debt crisis will be resolved, and whether or not the Chinese economy will achieve a “soft

landing” (a rate of economic growth high enough to avoid recession, but slow enough to

avoid high inflation.)

BC is into its second year of recovery since the recession of 2009. While unemployment rates

remain higher than the historic lows recorded three years ago, the province’s current rate of

7.5% remains in step with the national average.

In an attempt to further stimulate their economies, BC and many other Canadian provinces have

run fiscal deficits, and seen a corresponding growth in their debt loads for the past few years.

Nevertheless, BC’s economy appears to be making positive inroads, with growth driven by

world demand for its high-priced natural resources. A key economic force underlying our

province’s renewed economic growth is its unprecedented number of major project

investments, primarily in natural gas, mining, utilities, forest products and non-residential

construction. This new wave of capital investment – for projects either currently proposed or

underway - promises to help pave the way for BC’s future position as an international leader

in both resource production and export. In addition, considerable public and private capital is

being poured into strategic infrastructure projects (water, road and air) that will strengthen

BC as a transportation hub and reduce both industrial and social transportation costs.

In this year’s BC Check-Up, we are featuring eight “big ticket” investment projects that are

either underway or in progress. This section looks at the details of these significant projects,

and identifies the different issues related to each venture. It should be stated that these

projects are only a small selection of a large number of exciting new investments, but each

will play an integral role in helping shape BC’s future economic identity.

INTRODUCTION

BC Still on Recovery Track in 2011

Most of BC’s LIVE, WORK and INVEST indicators showed

ongoing improvement in 2011, as the province enjoyed its

second consecutive year of economic recovery.

BC’s labour productivity rose 3.7% in 2011, the best

showing of all our comparison jurisdictions, which include

Alberta, Ontario, and Canada as a whole. Between 2006

and 2011, the province recorded a 3.4% growth in labour

productivity - an increase that partially explains a 5.5%

increase in real wage per worker during this time, despite

the fact that BC’s real wage sagged slightly in 2011.1

The value of BC’s exports per worker grew by 13.2% in

2011, the second year of positive growth, and within our

comparison jurisdictions, second only to Alberta’s

increase of 15%, which was heavily weighted by high-

priced energy products.

In 2010, BC recorded a 6.6% spike in the science share of

employment, however, this indicator declined slightly—by

0.1 percentage points (ppt)—in 2011. In contrast this

indicator rose during this same period in Alberta, Ontario

and Canada.

In 2011, BC’s government debt increased by 1.2 ppt,

reaching 16.4% of provincial GDP. Although this was the

fourth annual increase in a row, BC still enjoys a

government debt/GDP ratio well below that of Ontario

and the national average.

BC’s labour force grew by 18,200 jobs in 2011, and the

unemployment rate was reduced to 7.5%. Unfortunately a

large percentage of these new jobs were part time, a

trend not shared by the other comparison jurisdictions,

where the majority of job creation was full-time

employment.

Educational attainment in BC’s provincial labour force

rose by 1.5 ppt. This growth continues a trend that has

occurred annually for the past decade. While BC’s labour

force educational attainment is still below the national

average, this was the largest one-year gain of any of the

comparison jurisdictions.

1

1 Source:StatisticsCanada2 Thisisconsumerdebtheldatcharteredbanks,whichaccountsforapproximately¾ofallhouseholddebt.3 TDBankEconomics,Provincial Economic Forecast,July9,2012.

One of the most surprising developments in 2011 was the

national and provincial spike in debt per capita. Between

2010 and 2011, BC’s consumer debt per capita rose by

29.6%, to reach $53,130.2 Although this was the smallest

increase of all the comparison jurisdictions (the national

average increased by 33%), in comparison to Alberta,

Ontario, and Canada, BC continues to have the highest

absolute level of debt per capita. As such, BC’s residents

are the most vulnerable in the country to economic

shocks or interest rate increases.

Our indicators show that health care in BC continues to

be a government priority. In 2011, health care

expenditures per capita rose slightly, by 0.8%. BC

continues to enjoy the second highest ranking in the

Health Consumer Index, outperforming other provinces in

terms of consumer accessibility and friendliness.

The results for young workers in 2011 were mixed. The

Youth at Risk indicator improved, and the share of young

workers without high school education declined by 1.9

ppt, to reach 6.2%. This was the lowest of the comparison

jurisdictions, and below the national average of 9.5%.

However, the provincial youth unemployment rate rose

0.2 ppt, to reach 14%. On the positive side, two minimum

wage hikes in 2011 served to improve the purchasing

power of both young and lower income workers, a good

sign for a province with a very high cost of living.

Where are we going?

In 2012, the outlook for BC’s economy is a slower real

GDP growth rate (2.1%), and little change in the

unemployment rate.3 It is expected that this moderate

slowdown will be the result of reduced government

spending, as BC endeavours to eliminate its deficit, and

reduced activity in the provincial housing market.

However, ongoing demand in China, and the prospect of

renewed housing construction in the US, will continue to

fuel exports of BC coal, energy, and lumber. In the longer

term, major natural gas and hydroelectricity projects will

also stimulate continued economic growth in the north

and throughout BC.

2

With economic growth, political stability, and an excellent

Provincial Government credit rating, it is easy to become

complacent with BC’s economic performance. However,

at both the individual and policymaker levels, it is

important to remain cognizant of the economic risks

associated with accumulation of debt.

We must also gain a better understanding of why so

many new jobs in BC are part time, and why there has

been no improvement in BC’s youth unemployment rate -

the highest in the West - even as young workers’

educational credentials are improving. Our overall

economic prospects are very good, but we need to find

ways to ensure that the next generation of workers

participate in, and benefit from, this legacy.

In light of these important issues facing our province’s

economy, our focus section in this year’s BC Check-Up

centres on current investment trends in BC; as previously

mentioned, this section looks at eight new, large-scale

investment projects and how they will help shape not

only the province’s economic identity, but that of its

current and future inhabitants.

4 BCMinistryofJobs,TourismandInnovation,March2012andMarch2006.BC Major Project Inventory.

AProfileofSomeofBC’sBiggestInvestments

Investment Trends in BC

In 2012, BC experienced a third consecutive year of

economic growth and the province continues to steadily

recover from the downturn of 2008-2009. Factors

driving this economic renewal include rising international

prices, increased demand for our resources (both

globally and domestically), and large-scale injections of

capital investment. BC’s abundant resources, political

stability, solid fiscal record, and high credit rating make

the province an attractive place to invest.

In the first quarter of 2012, the value of all projects under

construction in BC totalled $78.9 billion - a 25% increase

over the first quarter of 2011, and one marked by

significant growth in investment activity in mining and

energy projects. For example, in the first quarter of 2012,

there were 70 mining, and oil and gas projects either

proposed or underway in BC; in comparison, in the first

quarter of 2006, there were 42 projects.4

These resource projects will provide substantial economic

benefits to a number of smaller communities throughout

the province, many of which have suffered from stagnant

or declining job markets. These benefits include job

creation and higher incomes, as well as greater spending

on local goods and services.

The largest resource projects are situated in northern BC,

where many of the province’s mineral, coal, oil and gas,

and timber resources are concentrated. Northern

communities, like Ft. St. John, are reporting strong

population growth, and ballooning school enrolments, as

more workers - attracted by good job prospects - move

there with their families.

33

Rising international demand for our province’s resources

has contributed to the growth of BC’s status as a key

Pacific Rim transportation and commercial hub. New

industry needs and consumer preferences have changed

the nature of major public and private sector

infrastructure investments. New container terminals in

Delta and Prince Rupert have bolstered the province’s

capacity for specialized cargo and its ability to trade with

Asian markets, while the proposed construction of

another terminal is currently under consideration. The

provincial government continues to invest in major

strategic infrastructure that will provide for the improved

and more efficient transportation of both people and

goods. This includes projects such the Prince George

runway expansion, new rapid transit, the Cape Horn

exchange and Port Mann Bridge, and twinning Highway

97A between Dawson Creek and Fort St. John.

What is the status of the BC’s biggest projects? There are

hundreds of capital projects, either proposed or

underway in our province; here are the profiles of some

big ticket items that promise to help shape a new future

for BC.

Kitimat Modernization Project: Kitimat, capital amount:

$2.7 billion

This modernization of the existing smelter in Kitimat will

boost future output of aluminum by 48% to 420,000

tonnes per year. Once finished, the upgraded smelter will

be powered by wholly-owned hydro-electricity. Project

approval was announced by investor Rio Tinto Alcan in

December 2011, and the first metal is expected to come

on-stream in the first half of 2014.

Rio Tinto is an international mining group headquartered

in the UK, combining Rio Tinto plc, a London and NYSE

listed company, and Rio Tinto Limited, which is listed on

the Australian Securities Exchange.

The permitting process for this investment was lengthy:

in 2007, a resolution of a long term labour agreement

with 16 unions was achieved, along with assurances on

environmental permitting issues. A full four years later in

2011, the BC Utilities Commission accepted the 2007

Energy Purchase Agreement (EPA) between Rio Tinto

Alcan and BC Hydro.

The major project benefits of the Kitimat Modernization

Project include a reduction in production costs (making

Alcan smelter more competitive worldwide), the creation

of 2,500 jobs during peak construction and 1,000 in

operations, and a 50% reduction in the smelter’s carbon

dioxide emissions. While aluminum prices declined in late

2011, this did not delay development of this project, and

prices are predicted to start to rise in late 2012,

continuing through to 2013.

Coal and Metallic Minerals

4

Quintette Coal Mine: Tumbler Ridge, capital amount

$500 million

After 18 years of production, poor market conditions

forced the Quintette Coal Mine, located near Tumbler

Ridge, to close its doors in 2000. Since this time however

a turnaround in international coal prices has made the

re-opening the mine a fiscally attractive venture. The

owner, Teck Resources, is expected to complete a

feasibility study by the second quarter of 2012; upon

completion the mine will be able to resume operations

for another 16 years - with the goal of producing

approximately 3 million tonnes of coal per year. Teck has

ordered long-lead equipment, including trucks and drills,

undertaken on-site work, and is presently working

through the required regulatory processes. If the project

is deemed to be feasible, and if it can satisfy all

regulatory and environmental requirements, the mine

could begin operations in late 2013.

Teck is a diversified resource company headquartered in

Vancouver with major business units focused on copper,

steelmaking, coal, zinc and energy. Re-opening the

Quintette mine would create 350 to 400 direct jobs, and

increased community related income. This would benefit

workers and their families in Tumbler Ridge, an area hard

hit by the mine’s closure in 2000, as well as those who

move to the area to work once it has reopened.

Energy

Kitimat LNG Terminal: Kitimat, BC, capital amount

$3 billion

This proposed project is a liquid natural gas export

facility at Bish Cove, located 18 kilometers south of

Kitimat. It would include natural gas liquefaction, LNG

storage, and marine on-loading facilities. Natural gas

would be transported by a 14 kilometer, 30 inch pipeline

from Pacific Trail Pipelines, and would then connect to

the existing Spectra Energy Westcoast Pipeline system

and the North American grid.

The Kitimat LNG (KLNG) terminal is a joint venture

between Apache Canada Ltd. (a 40% owner), EOG

Resources Canada Inc. (a 30% owner), and Encana

Corporation (a 30% owner). Feed natural gas would be

transported to this facility from gas fields throughout

Northern BC and Alberta. Target export markets are

predominantly Asia-Pacific Rim based, including China,

South Korea and Japan.

The KLNG project has received approval under the BC

Environmental Assessment Act. Federal approval has

been also been received, and the National Energy Board

has approved a 20-year licence to export natural gas. A

front-end engineering and design study is underway for

the liquification facility and, when concluded, the venture

partners will jointly decide whether to proceed with the

project. Site preparation is now underway at Bish Cove,

with estimated completion by 2015.

The proposed facility enjoys close proximity to an

existing pipeline system that transports natural gas from

the Western Canadian Sedimentary Basin. It also enjoys a

location advantage, with easy transport to the Asia

Pacific market, and close proximity to one of the West

Coast’s best deep-water ports. Construction and

operation of this facility would generate a significant

number of new jobs and increased income, both direct

and indirect, to local communities. It is also expected to

help stimulate the BC energy sector in the long term,

generating further economic benefits and new industrial

clusters in both the North Coast Development Region,

and BC as a whole.

5

Forest Kerr Run-of-River Hydroelectric Project:

Iskut River, Northwest BC, $700 million

The 195 Megawatt (MW) Forest Kerr Run-of-River project

is situated 1,100 kilometers northwest of Vancouver in the

Iskut River Valley. When completed, it will consist of a

weir that diverts water through a 3 kilometer tunnel, into

turbines in an underground powerhouse, and then back

to the river further downstream. The electricity will flow

37 kilometers via the Northwest Transmission Line to the

substation at Bob Quinn Lake; from there it will be used

for northwest industrial development.

Forest Kerr is one of three hydroelectric projects

proposed for the Iskut River; together these would

account for one of the largest run-of-river projects in

North America. The Forest Kerr project is owned by

AltaGas, an energy infrastructure company with assets in

Canada. Construction on the project began in the spring

of 2011, and as of March 2012, most of the tunneling was

completed. The project is expected to be in service by

mid-2014.

The benefits from this project will be felt locally and

province-wide. The communities of Dease Lake, Iskut,

Telegraph Creek, Smithers and Terrace will benefit from

new employment opportunities this, and the other

hydroelectric projects, will create. At its peak, the project

will create over 400 jobs - stimulating demand for local

goods and services. A 2010 impact benefit agreement

(IBA) signed between the Tahltan Nation and Coast

Mountain Hydro LP (a subsidiary of AltaGas), outlined

agreements on environmental and cultural protections,

and ensured economic participation for the Tahltan. As of

December 2011, 93% of all work performed on the Forest

Kerr project site had been performed by either Tahltan

companies or joint ventures, while one third of all workers

belong to the Tahltan Nation.5 At the provincial level, the

Forrest Kerr project will contribute significantly to

economic development and government revenues, and

help move BC towards its goal of energy self-sufficiency.

Site C Clean Energy Project: Ft. St. John, capital amount

$8 billion

BC Hydro’s Site C Clean Energy Project (Site C) is a

proposed dam and hydroelectric generating station

located on the Peace River in northeast BC. The third

hydroelectric project on the Peace River system, Site C

would add up to 1,100 megawatts of capacity into the

provincial energy grid. Total capital cost would be

approximately $8 billion, with a construction period of

seven years.

This is one of several projects under consideration that,

once completed, would add to BC’s provincial energy

capacity and help meet the province’s goal of energy

self-sufficiency. The Site C project was first considered in

the late 1970s; due to strong local public opposition,

particularly from environmental interests and land

owners whose properties would have been flooded by

the reservoir, work on the project stalled. It was reviewed

again in the early 1990s, but again did not proceed.

In April 2010, the BC government announced that the

Site C project would proceed subject to environmental

approval. At present, it is undergoing an environmental

review by the Canadian Environmental Assessment

Agency and the British Columbia Environmental

Assessment office. This assessment began in July 2012,

and addresses economic, social, health, First Nation and

environment issues.

BC Hydro estimates that Site C would create

approximately 7,000 full time equivalent jobs of direct

construction employment during construction period, as

well as substantial direct and indirect income.6 The

impact of these benefits would be felt by local workers

and their families, as well as workers, contractors, and

suppliers throughout BC. At a time when oil, gas and

mining activity is strong in northeast BC, the Site C

project would add to what is already a very buoyant

economy.

5 TahltanCentralCouncilwebsite,http://www.tahltan.org/news/altagas-hydroelectric-run-river-updates.(AccessedJune2012).6 BCHydrowebsite,http://www.bchydro.com/energy_in_bc/projects/site_c/faqs.html(accessedJune2012).

6

Fairview Terminal Phase 2: Prince Rupert, capital amount

$650 million

Container ships have been calling on the Prince Rupert

Container Terminal since its completion in 2007. The

proposed Phase 2 is expected to quadruple the capacity

of this facility to 2 million TEUs (twenty foot equivalent

units) – an increase that will allow the Terminal to keep

up with BC’s growing role in Asia-Pacific trade. The

project will extend the wharf, increase the dock area and

on-site storage capacity, and quadruple the number of

post-panamax cranes. It also includes the creation of a

$90 million road rail utility corridor.

Prince Rupert Port enjoys the advantage of being the

closest major North American port to the Asian market.

Shorter ocean travel times and direct on-dock linkage to

the CN Rail network together translate into faster

shipping times. Between January and June 2012, the

Fairview Terminal handled 87.1% more containers than it

did during the same period last year.

After experiencing over a decade of stagnant economic

activity and population outflow, this project has the full

backing of the community of Prince Rupert; the Prince

Rupert Port Authority has also enlisted local First Nation

support. The environmental permitting process for this

project is almost complete, and it is anticipated that

construction would begin by the end of 2012. The final

commercial decision will be made by the terminal

operator, Maher Terminals LLC of Newark, N.J.

Infrastructure

Seaspan Marine Corporation National Shipbuilding

Procurement Strategy Contract: North Vancouver and

Victoria, capital amount $8 billion

Seaspan Marine Corporation was awarded an $8 billion

defense contract by the Canadian federal government in

October 2011 for the construction of seven non-combat

vessels, including offshore science vessels, a polar

icebreaker for the Coast Guard, and two joint support

ships for the Canadian Navy. Seaspan Marine Corporation

is an association of Canadian companies primarily

involved in coastal and deep sea transportation,

bunkering, ship repair, and shipbuilding services in

Western North America

Seaspan Marine Corporation and the federal government

completed an umbrella agreement for this work in

January 2012. Construction of new buildings and

infrastructure at both Vancouver Shipyards and Victoria

Shipyards is expected to start this year, and work on the

first vessel is slated for late 2013. Approximately 80% of

the work will be done at Seaspan’s North Vancouver yard

and the remaining 20 per cent at its facility in Victoria;

major vessel construction will take place in North

Vancouver, and finishing and electronics will be installed

in Victoria.

This is not only a major economic stimulus for Southwest

BC, but is an important step in the renewal in our

province’s moribund shipbuilding industry. Economic

benefits to be enjoyed by the province include $15 billion

in investment throughout the life of the contract, and

over 4,000 new jobs over the next eight years.

While Canada’s Department of Defense was forced to

delay production on combat vessels in Eastern Canada

due to recent government budget cuts, this has so far

had no effect on Seaspan’s non-combat contract, and as

of July 2012 work on this project is full speed ahead.

Evergreen Rapid Transit Project: Burnaby to Coquitlam,

capital amount $1.4 billion

Population growth in the Northeast sector of Metro

Vancouver — Port Moody, Port Coquitlam, Anmore and

Belcarra — is exerting pressure on the sector’s existing

road system, and has resulted in increased road

congestion - a problem that effects individuals,

communities, businesses, and the environment. The

Evergreen Line is Metro Vancouver’s newest rapid transit

line that will extend from Lougheed Town Centre Station

in Burnaby, to Douglas College in Coquitlam, and will

provide a connection between Coquitlam and downtown

Vancouver via the Millenium and Expo lines. Construction

on the Evergreen Line began in January 2012, and

completion is expected by summer 2016.

In addition to providing better connectivity and more

choice for commuters, the Evergreen Line will expand the

existing transit and road system in Metro Vancouver. It

will also pave the way for more concentrated and

mix-use development along the corridor, helping to meet

municipal growth management targets outlined in Metro

Vancouver’s Livable Region Strategic Plan. By

encouraging more commuters to use public transit, the

Evergreen Line can help reduce road congestion,

therefore making road transportation more efficient for

commercial vehicles.

7

Conclusions

The major investments underway throughout BC, especially in the resource sector, point to an increased diffusion of

economic activity and wealth throughout BC’s Interior, Northeast and Northwest regions. These regions have the

resources — coal, minerals, oil and gas, and timber — that correspond to market demand, especially those of the rapidly

developing Asian countries.

These projects are paving the way for long-term prosperity throughout the province. While all of BC stands to gain

from a growth in exports from these regions, our northern communities will enjoy the most immediate benefits, in the

form of jobs, increased spending, and population growth.

BC’s new public and private sector infrastructure projects are strategically important because they will enhance our

province’s overall competitiveness, providing better and faster land, air, and sea linkages, and more efficient transport

of people and goods, both within, and between our cities. The Seaspan shipbuilding contract will not only generate

jobs and income throughout its construction, but pave the way for the long term rebirth of an old industry in BC.

All of these projects will, or have the potential to contribute to a future where BC increases its trade with other

countries, achieves self-sufficiency in energy production and consumption, improves cost competitiveness, and

enhances productivity gains. For some of the major private sector investments, such as unconventional gas

development or oil/gas pipelines, there is a wide array of environmental and social concerns that will need to be

addressed before they gain public acceptance.

The provincial government is actively working on reducing investment barriers and attracting new talent through

initiatives such as the BC Jobs Plan and the Natural Gas Strategy. Looking forward, it will need to continually monitor

its tax policies and regulatory system to ensure it is clear and predictable to investors and businesses alike.

8

Educational attainment is expressed

as the percentage of the labour force

aged 25 to 64 with post-secondary

accreditation.

Unemployment rate is represented by

the number of unemployed persons

as a percentage of the labour force,

which is defined as people aged 15

and older who are employed or

actively looking for work.

Job creation is represented by the

annual change in the number of

employed workers.

Real Labour Compensation per

Employee is remuneration received

by an individual for work done, in the

form of wages of salary, and including

employers’ social contributions,

before deducting government

transfers.

Real labour productivity measures

the efficiency of the workforce (how

much output can be produced in one

hour), and is calculated as the ratio of

real GDP to total hours worked by the

labour force.

Proportion of natural and applied

sciences jobs reflects the extent of

technical knowledge dissemination

throughout the workforce.

Exports per worker is the ratio of the

inflation-adjusted value of exports to

the number of workers (or exports

per capita). Exports include

shipments to other countries and

other provinces (both goods and

services are included).

Government Net Debt as a

Percentage of GDP measures the

fiscal position of a provincial

government.

Consumer Debt includes both

personal and mortgage debt.

Youth at risk is defined as the

percentage of the labour force aged

19 to 24 lacking a high school

diploma.

Health Care is measured by two

indicators:

• Provincial government health care

expenditure per capita, and,

• Canada Health Consumer Index

ranking among the provinces.

work invest live

B C C h e c k - U p i n d i c a t o r s

A b o u t t h e B C C h e c k - U p

Since 1999, the Institute of Chartered Accountants of BC (ICABC) has used

selected economic and social indicators to evaluate BC as a place to work, invest,

and live. In order to provide context, BC’s progress levels are compared with

those of Alberta and Ontario, as well as Canada as a whole. The data is obtained

from Statistics Canada, and supplemented with information from other credible

published sources.

9

Summary of WORK Key Indicators BC AB ON CAN

Job Creation (000’s) 18,200 77,500 121,300 265,200

Unemployment Rate 7.5% 5.5% 7.8% 7.4%

Educational Attainment 65.9% 64.4% 69.7% 68.2%

Labour Compensation per Employee $48,244 $67,220 $51,866 $51,397

Job Creation 0.8% 3.8% 1.8% 1.6%

Unemployment Rate -0.1 ppt -1.0ppt -0.9 ppt -0.6 ppt

Educational Attainment 1.5 ppt -0.3 ppt 1.2 ppt 0.9 ppt

Labour Compensation per Employee 1.6% 1.8% -1.6% 0.2%

Job Creation 5.9% 9.3% 4.4% 5.5%

Unemployment Rate 2.7 ppt 2.1 ppt 1.5 ppt 1.1 ppt

Educational Attainment 4.9 ppt 3.7 ppt 4.6 ppt 4.3 ppt

Labour Compensation per Employee 2.3% 7.5% -0.5% 3.2%

work

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Notes:

Anincreaseinthevalueoftheseindicators(exceptforunemploymentratewhereadecreaseindicatesimprovement)

meansanimprovementinthequalityoftheprovince’sWORKenvironment.

ppt=percentagepointchange

FouroutoffourofBC’sworkindicatorsimprovedin2011:jobcreation(0.8%),unemploymentrate(-0.1ppt),

educationalattainment(1.5ppt),andlabourcompensationperemployee(1.6%)wereallinpositiveterritorylastyear.

However,evenwiththeincrease,BC’srateofeducationalattainment(65.9%)stilllaggedOntario(69.7%)andthe

nationalaverage(68.2%).

BCalsorankedlast,andbyasignificantmargin,forlabourcompensationwhencomparedtoAlberta,Ontario,and

thenationalaverage.ThetablebelowshowshowBCcomparedwithAlberta,Ontario,andthenationalaverageon

ourfourkeyindicatorsoveroneandfive-yearperiods.

Job Creation

Job creation is one of the most important and commonly

used indicators to assess the state of the labour market.

After a 1.7% increase in this indicator in 2010, BC’s job

creation rate slowed in 2011, with an increase of 0.8%.

This marked an absolute increase of 18,200 jobs, with the

provincial total reaching 2.28 million. Most of these

occurred in Vancouver, where the number of jobs rose by

31,100. However, this growth was offset by job losses in

Victoria, Abbotsford, and other communities around BC.

As in previous years, the service sector led the way, with

a total gain of 13,400 jobs (an increase of 0.7%.) The

greatest gains were in accommodation and food services

(19,500 new jobs), professional, scientific and technical

(7,800 new jobs), real estate and leasing (6,800 new

jobs), and transportation and warehousing (5,500 new

jobs). In contrast, there were substantial losses in the

trade sector (-15,100 jobs) - a reflection of subdued

domestic and international demand for these services.

Other sectors reporting losses include finance and

insurance (-9,200 jobs); health care and social assistance

(-2,900 jobs); and public administration (-2,500 jobs), as

government sought to reduce its spending.

Compared to services, BC’s goods sector recorded a

much smaller gain of 4,700 new jobs in 2011, an increase

of 1.1%. Overall, employment in this area of the labour

market was boosted by major investments throughout

the province and 14,100 new construction jobs were

generated in 2011. Non-durable manufacturing saw

another 3,000 new jobs, while employment in mining,

and oil and gas rose by 2,000 jobs. Nevertheless, these

substantial gains were offset by losses in durables

manufacturing (-4,900 jobs); agriculture (-5,700 jobs);

and utilities (-1,200 jobs).

It is notable that employment in BC’s manufacturing

sector has steadily declined since the mid-2000s. In

2004, at its peak, it accounted for 206,000 jobs and 51%

of the province’s goods sector employment. In contrast,

by 2011, employment numbers had decreased to 163,900

jobs, or 37% of jobs in this sector. Rationalization and

greater efficiencies in the forest products industry

account for the majority of this decline.

In 2011, BC’s job creation rate of 0.8% lagged Alberta,

Ontario, and the national average (3.8%, 1.8%, and 1.6%

respectively). BC also has a much higher proportion of

part-time jobs than the other jurisdictions. Of the 18,200

new jobs created in BC, 48% were part time. Part of this

can be explained by the decline of the manufacturing

sector, where jobs are largely full time. In Alberta, 3.4% of

all new jobs were part time, while in Ontario the share of

part time jobs declined from 19.3% to 19%. In Canada

overall, part time positions made up 19% of new jobs.

11

Unemployment

The unemployment rate is a key indicator of economic

health, reflecting the balance between the number of

workers and available jobs. A sluggish US market, and

concern over the growing European Union debt crisis

dampened the BC economy throughout 2011, but was

mitigated somewhat by brisk export growth to the

Pacific Rim. The net outcome was a slight improvement

in our provincial labour market. In 2011, BC’s

unemployment rate declined by 0.1 ppt in 2011, to reach

7.5%. This marked the second consecutive year of decline.

While our province’s labour force grew in 2011, the rate of

participation declined slightly, and the growth in the

number of jobs slightly outgrew the number of workers.

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

2006 2007 2008 2009 2010 2011

BC 2.6% 3.5% 2.0% -2.1% 1.7% 0.8%

AB 5.0% 3.9% 3.1% -1.4% -0.4% 3.8%

ON 1.2% 1.8% 1.6% -2.5% 1.7% 1.8%

CAN 1.8% 2.4% 1.7% -1.6% 1.4% 1.6%

Source: Statistics Canada, Labour Force Survey

Growth Rate of Job CreationAnnualGrowthinTotalEmployment

Labour market conditions worsened slightly for BC’s youth in 2011. Youth unemployment increased by 0.2 ppt for

the fourth year in a row, reaching 14%. As discussed in our regional reports earlier in 2012, there were some significant

exceptions to this trend. For example, in Northeast BC, the youth unemployment rate shrank to 4.7% in 2011, well below

the provincial average.

Looking to other jurisdictions, Alberta again enjoyed the lowest unemployment rate in 2011 at 5.5% when compared

to BC and Ontario (7.5% and 7.8% respectively). BC was on a par with the national average rate.

Educational Attainment

The level of educational attainment in the labour force reflects the degree of knowledge-based industry in an economy,

and is a hallmark of future productivity. In 2011, BC’s level of labour force educational attainment7 continued to rise,

reaching 65.9%. This is a marked contrast with a decade ago, when it stood at 57.8%, well below the levels recorded

by Alberta and Ontario.

Almost all of BC’s growth in this indicator occurred among workers with a bachelor’s degree or post-secondary

certificate. However, last year marked the second consecutive year that BC recorded a decline (-6.2 ppt) in the

number of workers with accreditation higher than a bachelor’s degree. This stands in contrast with the other

comparison jurisdictions, where the fastest growing labour group were workers with educational attainment higher

than a bachelor’s degree.

Overall, while Ontario, Alberta, and the western provinces have also watched their levels of labour force educational

attainment rise, BC has shown the fastest growth rate in the past one and five years (1.5 and 4.9 ppt respectively).

Our province still lags behind Ontario and the national average, but the gap appears to be closing.

12

7 Educationalattainmentisthepercentageofthelabourforcebetweenages25and54thathasreceivedsomelevelofpost-secondaryeducationincluding:post-secondary,certificatesordiplomas,

bachelordegrees,and/ormasters,andhigherleveldegrees.

3%

4%

5%

6%

7%

8%

9%

2006 2007 2008 2009 2010 2011

BC 4.8% 4.3% 4.6% 7.7% 7.6% 7.5%

AB 3.4% 3.5% 3.6% 6.6% 6.5% 5.5%

ON 6.3% 6.4% 6.5% 9.0% 8.7% 7.8%

CAN 6.3% 6.0% 6.1% 8.3% 8.0% 7.4%

6%

8%

10%

12%

14%

16%

18%

2006 2007 2008 2009 2010 2011

BC 8.4% 7.7% 8.5% 13.3% 13.8% 14.0%

AB 6.8% 7.2% 7.5% 12.2% 11.6% 10.7%

ON 13.3% 13.0% 13.7% 17.5% 17.2% 15.8%

CAN 11.7% 11.2% 11.6% 15.2% 14.8% 14.2%

Source: Statistics Canada, Labour Force Survey Source: Statistics Canada, Labour Force Survey

UnemploymentPercentageUnemployed

Youth Unemployment RatePercentageUnemployed

13

Real Labour Compensation

Real labour compensation per worker captures real

economic gains made by individual workers, netting out

inflation effects. It is defined here as the ratio of labour

compensation (wages and salaries and supplementary

income paid to employees8) to the number of workers,

adjusted for inflation with the Consumer Price Index.9

It is calculated on a gross, pre-tax basis.

Since the early 2000s, Canadians have generally enjoyed

rising real wages. A booming construction sector, and

increases in the price of oil and other commodities have

boosted wages in the resource industry. Higher

educational attainment has also contributed to this trend.

In particular, women with post-secondary education have

seen their real wages grow.

In BC, real annual labour compensation per employee

increased by 1.6% to reach $48,244 in 2011. This was the

third year in a row that real labour compensation rose in

BC. Strong commodity prices and a surge of

construction, particularly in southwest BC and the

northeast, translated into higher paying jobs in the

construction, manufacturing, and transportation

industries. BC’s steady rise in labour force educational

attainment also contributed to growth in real labour

compensation in the goods and services sectors.

In 2011, Alberta saw the largest one-year increase in real

labour compensation per worker of all jurisdictions,

growing by 1.8%, to reach $67,220, the highest level in

Canada. Employment in the province’s red hot energy

sector was the driving force behind this trend. Alberta’s

gain also boosted the Canadian average real

compensation by 0.2%, to reach $51,397. Ontario bucked

the national trend with a 1.6% decline in real per capita

labour compensation.

Looking at five year averages, Alberta enjoyed a

remarkable 7.5% increase in real compensation between

2006 and 2011. This was reflected in the national average

gain of 3.2% over the same period; BC’s real

compensation rose by 2.3%. In Ontario, however, real

compensation declined slightly by 0.5%, reflecting the

loss of many highly-paid manufacturing jobs, especially

in the automotive sector.

8 Supplementaryincomeincludesemployercontributionstoemployeewelfare,pensions,workerscompensationandemploymentinsurance.9 Includesfullandparttimeworkers.

55%

58%

61%

64%

67%

70%

2006 2007 2008 2009 2010 2011

BC 61.0% 61.7% 62.6% 63.0% 64.4% 65.9%

AB 60.7% 61.6% 62.3% 64.3% 64.1% 64.4%

ON 65.1% 66.5% 67.4% 68.0% 68.5% 69.7%

CAN 63.9% 64.9% 65.6% 66.4% 67.3% 68.2%

$38,000

$43,000

$48,000

$53,000

$58,000

$63,000

$68,000

2006 2007 2008 2009 2010 2011

BC 47,161 46,971 46,903 47,068 47,468 48,244

AB 62,533 63,386 64,434 63,098 66,048 67,220

ON 52,131 52,547 52,020 52,821 52,688 51,866

CAN 49,785 50,222 50,340 50,786 51,312 51,397

Source: Statistics Canada, Labour Force Survey

Source: Statistics Canada

Percent of Labour Force Age 25-54 With

a Post-Secondary Certificate/Diploma or Higher

Real Labour Income per Employee (2010$)

Summary of INVEST Key Indicators BC AB ON CAN

Productivity 36.4 46.0 38.3 38.9

Employment in the Sciences 6.5% 8.3% 7.9% 7.4%

Value of Exports per Worker $13,312 $41,924 $21,295 $22,415

Government Net Debt as a % of GDP 16.4% -5.4% 37.2% 33.9%

Productivity 3.7% 0.2% -0.5% 1.3%

Employment in the Sciences -0.1 ppt 0.5 ppt 0.0 ppt 0.0 ppt

Value of Exports per Worker 13.2% 15.0% 5.5% 11.0%

Government Net Debt as a % of GDP 1.2 ppt 1.4 ppt 2.2 0.0

Productivity 3.4% -0.6% -1.0% 2.4%

Employment in the Sciences -0.4 ppt 0.8 ppt 0.76% 0.5%

Value of Exports per Worker -10.3% 7.0% -17.4% -4.6%

Government Net Debt as a % of GDP 4.7 ppt 6.8 ppt 10.4 ppt 4.0 ppt

invest

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Notes:

Anincreaseinthevalueoftheseindicators(exceptforgovernmentnetdebtasa%ofGDPwhereadecrease

indicatesimprovement)meansanimprovementinthequalityoftheprovince’sINVESTenvironment.

ppt=percentagepointchange

BC’sinvestmentclimatesawsignificantimprovementin2011,asthreeoutoffourindicatorshadpositiveresults.

BCrecordedthehighestproductivitygrowth(3.7%)ofallcomparisonjurisdictionsandrankedsecondtoAlbertafor

growthinvalueofexportsperworker(13.2%vs.15.0%respectively).BC’sgovernmentnetdebttoGDPratiowasthe

secondlowestincreaseinthecomparison.Howevertheprovinceexperiencedadeclineinemploymentinthesciences.

Whileprogresswasmadelastyear,BChadalargegaptocloseandrankedlastinthecomparisoninthreeoffour

indicators—theexceptionbeinggovernmentnetdebttoGDPratio—whereBC’swassignificantlybelowbothOntario

andthenationalaverage.ThetablebelowshowshowBCcomparedwithAlberta,Ontario,andthenationalaverage

onourfourkeyindicatorsoveroneandfive-yearperiods.

Productivity

Real labour productivity, or the amount of real GDP per

hour worked, measures the efficiency of the workforce.10

When more output is being produced with an existing

amount of labour and capital, this is a productivity gain,

which positively impacts the investment climate.

BC’s real labour productivity rose by 3.7% in 2011, the

highest rate of all comparison jurisdictions, and five-year

gains were also the highest, as BC’s labour productivity

rose by 3.4% between 2006 and 2011, compared to 2.4%

across Canada, -1.0% in Alberta, and -0.6% in Ontario.

A recent Statistics Canada assessment of provincial

labour productivity trends shows that the biggest

contributor to labour productivity gains in both BC and

Alberta between 1997 and 2010 was capital intensity -

investment in physical structures, machinery, and

equipment.11 However Alberta’s labour productivity has

been slowed by “multifactor productivity” (eg. the

change in extraction techniques to non-conventional oil

sources, such as oil sands).12

Statistics Canada’s Preliminary Intentions indicate that

between 2010 and 2011, the greatest absolute growth in

BC’s machinery and equipment occurred in mining, oil

and gas extraction, wholesale trade, and transportation

and warehousing.13 There were also notable investment

increases in finance and insurance, the public sector, and

manufacturing.14 These investments are likely to stimulate

future productivity gains in BC, both overall and in these

specific sectors.

Employment in the Sciences

The proportion of all workers employed in the natural and

applied sciences reflects the demand for, and supply of

jobs with high technical requirements. An increase in this

indicator means that more scientific and technical

workers are finding jobs in their fields of expertise.15 In

absolute terms, BC had the lowest proportion of workers

in the sciences of all comparison jurisdictions in 2011.

Approximately 6.5% of BC’s workers were employed in

the sciences, compared to the national average of 7.4%,

Ontario at 7.9%, and Alberta at 8.3%. In 2011, the science

share of employment declined by .4 percentage point.

Growth in this indicator has stalled in BC since 2006,

while it has risen in the other jurisdictions. This is

reflective of a slower build-up of science and

technological industries in BC. It may also help explain

BC’s loss of workers with a degree higher than a

bachelor’s, as discussed earlier in Educational

Attainment. However, this is not to say that these jobs are

not being created. In 2011, BC saw 7,800 new jobs (an

increase of 4.5%) in professional, scientific and technical

services, although this growth was smaller than the gains

reported in both Alberta and Ontario.

15

10 Ideally,aproductivitymeasureshouldaccountforbothlabourandcapitalinputsusedinproduction,butthisisdifficult,andlabourproductivityisgenerallyusedasaproxymeasurefortotal

changeinproductivity.11 StatisticsCanada,The Daily,March12,2012,Factors in the Growth of Labour Productivity in the Provinces.12 Multifactorproductivityreferstoincreasesresultingfromtechnologicalinnovationandorganizationalchangesinfirms.13 StatisticsCanada,2012,Private and Public Investment in Canada, Intentions.14 Ibid.15 Naturalandappliedsciencesincludeprofessionaloccupationsinphysicalandlifesciences,engineering,architecture,planning,andarangeofrelatedtechnicaloccupations.

30.0

35.0

40.0

45.0

50.0

2006 2007 2008 2009 2010 2011

BC 35.2 34.6 34.4 34.7 35.1 36.4

AB 46.3 45.2 44.8 44.6 45.9 46.0

ON 38.7 38.7 38.1 38.1 38.5 38.3

CAN 38.0 38.0 37.8 37.7 38.4 38.9

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

2006 2007 2008 2009 2010 2011

BC 6.9% 6.4% 6.6% 6.0% 6.6% 6.5%

AB 7.5% 7.9% 7.7% 8.2% 7.8% 8.3%

ON 7.2% 7.3% 7.5% 7.4% 7.9% 7.9%

CAN 6.9% 7.0% 7.0% 7.1% 7.4% 7.4%

Source: Statistics Canada Source: Statistics Canada

Real Labour Productivity High Tech Employment Share

Exports per Worker

The exports per worker indicator is defined as the

nominal value of provincial international exports, divided

by the number of persons in the labour force. This

indicator allows for a more in-depth economic

comparison between provinces. An increase in the value

of exports per worker indicates an economic

improvement.

The export of goods and services to other provinces and

international markets constituted over 42% of BC’s GDP

in 2010.16,17 Our province’s total international exports of

goods were valued at $32.75 billion in 2011, almost on a

par with pre-recession levels. Given the importance of

trade to our provincial industries, and the variability of

market conditions, there is little question that BC’s

economy is vulnerable to developments and market

prices around the globe.18

In 2011, BC exported $13,312 of goods per worker. This

was a 13.2% increase over 2010, and marked a second

consecutive year of solid growth that saw the value of

BC’s exports reach their early 2000s level.

All jurisdictions saw this indicator rise in 2011, as demand

for Canadian resources and products grew in both

traditional and new markets. The value of Alberta’s crude

petroleum and petroleum products largely accounts for

its high level of exports per worker, which rose by 15%, to

reach $41,924. BC’s exports per worker growth rate

ranked second, while Ontario’s rose by 5.5%, to reach

$21,295. On average, in Canada, the value of exports per

worker rose 11%, to reach $22,415.

There are a number of reasons that account for the low

value of BC’s exports per worker in comparison to other

jurisdictions: first, the export of services and inter-

provincial shipments are significant in BC, but not

captured in the Customs Canada export data which

focuses entirely on goods. Second, the national average

is bolstered up by the export values of those provinces

that export petroleum and petroleum products – Alberta,

Saskatchewan, and Newfoundland and Labrador. Thirdly,

our product profile may also be lower value-added.

In 2011, BC’s greatest gains in exports took place in the

Asia Pacific market, with China and South Korea

recording the most dramatic demand increases, for

natural resource exports in particular. Together, these two

countries accounted for 23.5% of all of BC’s international

exports in 2011, compared to 8.5% in 2006. Volumes to

the US market were slightly up from 2010, but the US

share of BC exports has declined from 61% in 2006 to

43% in 2011.

16

16 Source:BCStats,July2012,BC GDP at Market Prices and Final Domestic Demand 1981-2010.FromStatisticsCanada,13-212-PIB.17 ExportsarecalculatedbyBCStatsonaBalanceofPaymentbasisandwillnotmatchinternationaltradedatafromothersources,whichisonacustomsbasis.18 Ouranalysisofexportsfocusesonthevalueofphysicalmovementoftangiblegoods,calculatedwithCustomsCanadadata.Customsdatadoesnotcapturetradeinservicesorinterprovincial

trade.

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

2006 2007 2008 2009 2010 2011

BC $14,843 $13,579 $13,939 $10,505 $11,758 $13,312

AB $39,170 $39,513 $51,743 $32,227 $36,459 $41,924

ON $25,780 $25,293 $22,944 $17,573 $20,183 $21,295

CAN $23,491 $23,481 $25,013 $18,247 $20,196 $22,415

Source: BC Stats and Stats Can LFS

Domestic Exports per Worker (Current $)(Worker=labourforce,bothemployedandunemployed)

17

Government Debt as Percentage of GDP

Chronic growth in government debt exerts a burden on

taxpayers, ultimately affecting a province’s credit rating,

and deterring future investors. A decrease in this

indicator is regarded as an improvement in the

investment climate.

The fiscal year 2011/2012 was the BC Provincial

Government’s third consecutive year of budget deficit,

recording a total shortfall of $2.5 billion. Part of the

increase in the budget deficit was due to a refund to the

federal government of the $1.6 billion HST transitional

tax, after voters eliminated the HST in August 2011. BC’s

government debt grew to $34.79 billion in 2011/2012, and

its debt/GDP ratio rose to 16.4% from 15.2% in the

previous year, a 1.2 ppt increase.19

By law, the government is allowed to run one more year

of deficit, and projections are for a 2012/2013 deficit of

$968 million.20 The provincial government will use a

combination of increased revenues and reduced costs to

achieve a balanced budget in 2013/2014, including

retaining a small business tax rate of 2.5%, and freezing

wages in the public sector, among other measures.

Global financial uncertainty and the prospect of rising

interest rates, however, could make it a challenge to

achieve this goal.

In this year of booming resource revenues, BC, Alberta,

and Saskatchewan are enjoying the lowest government

debt/GDP ratios in Canada. In 2011/2012, Alberta’s ratio

was -5.4%, while Saskatchewan’s was 5%. The Canadian

average government debt/GDP ratio was 33.9%, no

change from the previous year.

BC’s provincial taxpayer-supported debt is forecast to

rise from $34.79 billion in 2011/2012 to $43.7 billion in

2014/2015. The ratio of government debt/GDP will

move in tandem, reaching 18.3% in the latter fiscal year.

19 Source:RoyalBankEconomics,July2012,Provincial Fiscal Tables.Theratiofor2011/2012isapreliminaryestimate.20 Ibid.

-15%

-5%

5%

15%

25%

35%

45%

06/07 07/08 08/09 09/10 10/11 11/12p

BC 12.7% 11.7% 12.5% 14.7% 15.2% 16.4%

AB -12.7% -12.2% -9.2% -9.6% -6.8% -5.4%

ON 27.4% 26.8% 28.9% 33.3% 35.0% 37.2%

CAN 32.2% 29.9% 28.9% 34.0% 33.9% 33.9%

Source: Royal Bank Economics

Government Net Debt to GDP Ratio

Summary of LIVE Key Indicators BC AB ON CAN

Consumer Debt per Capita $53,130 $48,442 $43,742 $43,806

Youth at Risk 6.2% 11.5% 8.5% 9.5%

Provincial Gov’t Health Expenditures per Capita $3,589 $4,462 $3,617 $3,766

Consumer Debt per Capita 29.6% 38.6% 40.4% 33.4%

Youth at Risk -1.9 ppt -0.1 ppt 0.2 ppt -0.3 ppt

Provincial Gov’t Health Expenditures per Capita 0.8% -3.1% -1.2% 0.5%

Consumer Debt per Capita 66.8% 93.4% 70.1% 72.0%

Youth at Risk -3.2 ppt -1.0 ppt -2.5 ppt -2.4 ppt

Provincial Gov’t Health Expenditures per Capita 19.6% 33.8% 22.0% 25.4%

live

20

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Adecreaseinthevalueofconsumerdebtoryouthatriskmeansanimprovementinthequalityofthe

province’sLIVEenvironment.

ppt=percentagepointchange

In2011,BCagainreceivedthesecondhighestratingontheHealthConsumerIndex,whichrankshealthcaredelivery

ineveryprovince,andhealthcareexpenditurespercapitarose0.8%—thelargestincreaseamongthecomparison

jurisdictions.Thenumberoftheprovince’syouthatriskdeclinedby1.9ppt.

WhileBC’sincreaseinconsumerdebtwasthelowestinthecomparison,inrealtermsitwasstillthehighestat

$53,130.ThetablebelowshowshowBCcomparedonourthreekeyindicatorswithAlberta,Ontario,andthe

nationalaverageoveroneandfive-yearperiods.

19

21 Thisiscreditcarddebt,mortgages,personalloansandotherdebtheldatCanadiancharteredbanksandcreditunions,whichaccountsforapproximately75%ofconsumerdebt.22 StatisticsCanada,Catalogue13-018-X,Table18.23 TDBankEconomics,SpecialReport,February2011.Assessing the Financial Vulnerability of Households Across Canadian Regions.

Consumer Debt

Consumers use debt to finance the purchase of their

home, pay for education, and buy goods and services. In

the past decade, the level of consumer debt in Canada

and BC has more than doubled, with mortgage and

credit card debt growing at unprecedented rates. In

BC, average consumer debt per capita rose by 29.6%

between 2010 and 2011, reaching $53,130.21 This was the

highest one-year growth rate in the past decade, and BC

continues to have the highest level of debt per capita in

Canada.

BC’s housing prices are the key driving force behind the

growth in consumer debt. Mortgage debt accounted for

almost 75% of all debt held at chartered banks and credit

unions in BC. In 2011, it was the fastest growing debt in

all Canadian jurisdictions. Mortgages held at chartered

banks in BC rose by 52%; between 2006 and 2011 the

value of mortgage debt rose by a remarkable 90%.

However, as of July 2012, BC’s housing market has begun

to soften. Moreover, the Canadian government has

recently introduced new regulations on lending

conditions - such as reducing the amortization period

to 25 years - to curb excessive mortgage debt.

Credit card debt held at chartered banks is the second-

fastest growing component of personal debt across

Canada. Between 2006 and 2011, credit card debt in

BC grew by almost 95%; in one year alone, (2010-2011),

it increased by 27.7%. This component is driven by

consumer spending, rather than the housing market.

Given BC’s negative savings rate (-3.3% in 2010)22 and

high debt/income ratio (160.5 in 2010)23, many

households in this province are financially vulnerable to

the fluctuations of both the domestic and global

economies.

Compared with the other jurisdictions, Ontario saw

the fastest rise in consumer debt per capita in 2011,

increasing by 40.4%. Alberta ranked second highest at

38.6%, and the national average increase was 33.4%. In

all cases, mortgages accounted for the largest share of

debt, with credit card debt not far behind. There is little

question that financial vulnerability related to excessive

borrowing is a concern across the country, especially for

those who are not equipped to cope with a rising interest

rate, or a sudden change in economic circumstances.

0%

5%

10%

15%

20%

25%

30%

35%

40%

2006 2007 2008 2009 2010 2011

BC 9.8% 11.7% 6.2% 9.0% 6.2% 30.9%

AB 17.0% 21.6% 7.0% 9.4% 6.6% 40.8%

ON 6.1% 10.0% 1.2% 4.9% 8.2% 42.0%

CAN 7.9% 9.3% 7.8% 6.8% 7.3% 34.7%

Sources: Statistics Canada; Credit Union Central of BC, Alberta and Manitoba;

Insurance Deposit Corporation of Ontario; and SaskCentral

Growth in Total Consumer Debt

$10,000

$20,000

$30,000

$40,000

$50,000

2006 2007 2008 2009 2010 2011

BC $31,858 $35,042 $36,599 $39,210 $40,988 $53,130

AB $25,053 $29,662 $31,048 $33,219 $34,939 $48,442

ON $25,713 $28,014 $28,054 $29,119 $31,145 $43,742

CAN $25,471 $27,543 $29,357 $30,962 $32,850 $43,806

Sources: Statistics Canada; Credit Union Central of BC, Alberta and Manitoba;

Insurance Deposit Corporation of Ontario; and SaskCentral

Total Consumer Debt per Capita

20

Youth at Risk

The share of the workforce aged 19 to 24, which has not

completed high school, reflects the portion of the youth

population with limited long term employment and

earning prospects. Historical records indicate that high

school drop-outs are more likely to require a form of

economic or social support in their lifetime. BC has done

well in this indicator for the past decade, with the lowest

percentage of youth at risk out of all comparison

jurisdictions. In 2011, this indicator declined in BC by

1.9 ppt, to reach 6.2%, the lowest ever level.

Labour force statistics show that among BC workers,

aged 19-24 and active in the labour force, the number

who possess only high school education or less has

decreased in the past five years.24 During this time, the

fastest growing demographic was young labour force

participants with either some post-secondary education

or a post-secondary certificate or diploma. However, the

number of young workers with a university degree has

changed little, and actually registered a decline in 2011.

The surge in workers with post-secondary credentials

reflects a growing understanding among BC’s youth that

post-secondary school is an essential preparation for the

workforce. It is also undoubtedly influenced by recent,

significant job creation in both the construction trades,

and the mining and oil and gas extraction industries.

In 2011, Ontario saw its youth at risk indicator rise 0.2 ppt,

to reach 8.5%, while Alberta’s declined slightly to 11.5%.

There was a decrease in the national average, from 9.8%

to 9.5%. Overall, all comparison jurisdictions have

witnessed a steady decline in the youth at risk indicator

over the past five years. Between 2006 and 2011, BC saw

this indicator decline by 3.2 ppt, and Ontario, Alberta,

and the national average all registered declines of 2.5

ppt, 1ppt, and 2.4 ppt respectively.

Health Expenditures Per Capita

Government expenditures on health care per capita is

used as an aggregate measure of health care investment.

From the perspective of the health consumer, an increase

in this indicator may be viewed as a positive, albeit

superficial, change, as it tells us little about health care

delivery at the patient level. It is therefore important to

supplement this indicator with the Canadian Consumer

Health Index, which evaluates provincial health care

delivery based on patient outcomes, waiting times for

treatment, primary care, patient rights, and range of

services.25

In 2011, BC’s Provincial Government health care

expenditures per capita grew by 0.8%, to reach $3,589

per person.26 Ontario’s expenditures declined by 1.2%, yet

still reached $3,617, while in Alberta, expenditures

declined by 3.1%, to reach $4,462. It is interesting to note,

that while Alberta spends the most per capita, in terms

of a percentage of GDP it spends 8.6%, whereas BC

spends 11.6% and Ontario 11.9%.27

24 StatisticsCanada,2012,Labour Force Survey.25 ThiswasdevelopedbytheFrontierCentreforPublicPolicyandHealthConsumerPowerhouse.ThemethodologyhasbeendevelopedandusedbytheHealthConsumerPowerhouse,Europe’s

leadingindependentproviderofconsumerinformation,whoseworkhasinitiatedimprovementinhealthcaresystemsinEurope.26 CanadaInstituteforHealthInformation,DataTables,2010,https://secure.cihi.ca/estore/productFamily.htm?pf=PFC1556&lang=en&media=0.27 Ibid.Table5.

6.0%

7.0%

8.0%

9.0%

10.0%

11.0%

12.0%

13.0%

14.0%

2006 2007 2008 2009 2010 2011

BC 9.4% 9.1% 8.0% 7.3% 8.1% 6.2%

AB 12.5% 12.4% 12.4% 10.3% 11.6% 11.5%

ON 11.0% 9.8% 9.8% 8.5% 8.3% 8.5%

CAN 11.9% 11.2% 10.9% 10.0% 9.8% 9.5%

Sources: Statistics Canada, LFS, Custom Table

Percent of Labour Force Between Ages of 19

and 24 With Less Than High School Education

21

Across Canada, compensation of health care providers,

greater use of services, and a growing choice in the types

of services provided and used (e.g., diagnostics) were the

key drivers of public-sector health care spending during

the past decade.28 These factors, combined with an aging

population, all exert pressure on government to boost

health care spending.

The Canadian Consumer Health Index evaluates

provincial health care delivery based on outcomes,

waiting time for treatment, primary care, patient rights,

and range of services.29 BC and New Brunswick were tied

for second place in 2011, with Ontario ranking first. BC’s

health system stood out particularly in patient access to

information, information technology, and duration of

waiting times, and it outperformed most provinces in

terms of consumer accessibility and friendliness.

28 CanadianInstituteforHealthInformation,November 2011, National Health Expenditure Trends, 1975 to 2011.29 ThemethodologyhasbeendevelopedandusedbytheHealthConsumerPowerhouse,Europe’sleadingindependentproviderofconsumerinformation,whoseworkhasinitiatedimprovementin

healthcaresystemsinEurope.30 Eisen,Ben,2011, Canada Health Consumer Index,PresentedbyFrontierCentreforPublicPolicyandHealthConsumerPowerhouse.31 Rankingacrossallprovinces;territoriesareexcluded.

Health Consumer Index National Ranking in 201130

BC AB SK MB ON QC NB NS PE. NL

2 5 9 4 1 8 2 10 7 6

Source: Canadian Consumer Health Index 2011

HealthConsumerIndexNationalRanking31

tied tied

$2,900

$3,150

$3,400

$3,650

$3,900

$4,150

$4,400

$4,650

06–07 07–08 08–09 09–10 10–11 f 11–12 f

BC 2,999 3,146 3,388 3,394 3,561 3,589

AB 3,335 3,587 3,929 3,991 4,603 4,462

ON 2,965 3,176 3,350 3,534 3,662 3,617

CAN 3,004 3,192 3,408 3,561 3,747 3,766

Source: CIHI

Provincial Gov’t Health Expenditure per Capita

(Current $)

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Advisory Committee

GordonAdair,FCA

ArtBeck,CA

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MichaelMacdonell,CA,Treasurer

Staff

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