This certainly helps to explain why the US is luring so many talented Canadians south, including some of BC s best and brightest. 8 Investment fell in BC in both 1995 and 1996, and increased but by less than half the national rate in 1997. According to Statistics Canada s latest investment intentions survey, this pattern has continued into 1998. Rather, it is the declining competitiveness of key industries like forestry, rising taxes and other government imposed costs, a growing regulatory burden, and a widespread perception among investors and entrepreneurs that BC presents a poor risk-reward tradeoff. Arguably of even greater concern is the province s failure to increase productivity.
Productivity is the value of output produced by a day of work or a dollar of capital invested.
In the long run, productivity determines the standard of living by setting wages, profits, and ultimately the resources available to meet social needs. Between 1988 and 1997, our aggregate labour productivity fell slightly. As noted in an economic report commissioned for the BC Business Summit, the factors behind BC s abysmal productivity record are complex, but they include inadequate business investment, relatively low levels of corporate profits, structural problems plaguing the resource industries, and importantly slow progress in building a significant non-resource manufacturing sector . This is important, since unit labour costs are a widely cited measure of competitiveness. Overall, BC tends to have the highest business costs in Canada, which makes it harder to attract investment and the jobs that go with it.