Inflation makes the cost of doing business more expensive and inhibits investment, which is why the recent data from Statistics Canada is welcome news.
The Consumer Price Index rose 6.3% year over year in December, down from a 6.8% increase in November. Excluding food and energy, prices rose 5.3% on a yearly basis in December, compared to 5.4% in November.
Canadian Chamber Economist Mahmoud Khairy said the drop might not be enough to keep the Bank of Canada from one more increase to interest rates later this month. Khairy expects rates to rise by a quarter point, to 4.5%, and end the tightening cycle which began last March.
Meanwhile, the Bank of Canada released its latest Business Outlook Survey on Monday. It found that the rise in interest has dampened sales forecasts as customers have less spending money available after paying for necessities. The Bank also released its survey of Consumer Expectations on Monday, showing that many people still fear a recession despite stronger than expected job numbers.
Non-profits play a significant role in Greater Victoria, providing services and solving problems that help businesses and improve quality of life in our community.
A $400 million federal investment in non-profits is being offered through United Way Southern Vancouver Island, Canadian Red Cross, and the Victoria Foundation to "strengthen internal capacity through one-time projects focused on people, systems and program innovation."
Applications are open for the Community Services Recovery Fund until Feb. 21. Funding ranges from $10,000 to $100,000 for Tier 1 projects, and between $101,000 and $200,000 for Tier 2 projects.
The provincial government appears to be sharpening their scissors as they look to cut through red tape slowing new homes from being built in BC.
On Monday, Premier David Eby announced a "one-stop-shop" for provincial permitting to make it easier for more housing to be created. The Permitting Strategy for Housing co-ordinates housing-related permits across ministries. This eliminates the need for multiple applications to get permits for "riparian area approvals, water licences, transportation approvals, road rezonings, contaminated sites, and requirements for heritage inspection."
Having fewer bureaucrats shuffling paper on projects is a positive sign that the province is serious about adding urgency to promises to increase housing supply.
"From finding and keeping workers to helping people without homes and making sure Greater Victoria remains attractive for people looking to start their careers and raise families, the biggest challenge is the lack of accessible housing," Chamber CEO Bruce Williams said. "We have had great conversations with local governments about adding to our region's housing supply. Speeding up the provincial process is a signal to municipalities that housing is critical, and they need to lead the way to get more homes built to meet demand."
The increase in assessed value of properties doesn't only apply to residential real estate. There is ongoing demand for industrial and commercial properties as well, reports the Times Colonist.
With industrial vacancy at a record low of 0.2%, the demand for working properties will continue to be strong, even as high interest rates make it more challenging to attract investment.
It's a tough time to be an economist. The jump in inflation experienced last year spurred the Bank of Canada to spike interest rates with the goal of cooling the economy and perhaps triggering a recession. However, Statistics Canada shows that 104,000 jobs were added in December — much higher than most experts had forecast.
In Greater Victoria, the numbers also offer a mixed message as the unemployment rate dropped to 3.4% in December. However, the region's available labour force was down from November while overall population increased.
Perhaps we'll have more clarity when the consumer price index for December is announced on Jan. 17. The Bank of Canada will make an announcement on its interest rate on Jan. 25.
The start of a new year is an opportunity to reflect back and look ahead. Chamber CEO Bruce Williams has been speaking to media about some of the experiences, challenges and opportunities facing business right now.
For example, the winter weather that blitzed Greater Victoria right before the holidays caused havoc for travellers but shoppers still found a way to get their gift buying done in time. Retailers reported a better than expected experience at their cash registers, though part of that seems to be an ongoing shift in consumer habits.
“They’re spending a little bit more but buying less. In other words, going for quality over quantity,” Chamber CEO Bruce Williams told CHEK News.
As well, news that Canada set a record for immigration numbers was welcomed by businesses that continue to face challenges finding and keeping workers.
Black Press highlighted The Chamber's efforts to encourage more new Canadians to settle in Greater Victoria, as well as faster approvals for skilled workers.
“They bring their skills but another really important element is they bring their culture,” Williams told the Victoria News. “The more opportunities we have to learn more about other cultures, the better we are.”
Doctors, tradespeople and hospitality workers are needed and our economy will immediately benefit from approving people with internationally obtained skills to work in their areas of expertise.
“The lack of recognition of those credentials is kind of counterproductive to bringing someone here (because of) those credentials if they can’t work,” Williams said.
How can business help solve complex challenges regarding addiction and toxic drugs in our communities? The opioid crisis has caused immeasurable distress in many people's lives, affecting families, colleagues and others close to us at an unprecedented scale.
Island Health hopes that innovation, which the private sector is renowned for, can make a difference. The health authority is is seeking Expressions of Interest from not-for-profit organizations, local governments, Indigenous Nations and local businesses. A $1 million fund has been set up to provide grants of up to $50,000 for projects and initiatives that:
Details on the grants, including how to apply are available at: New Resilience and Safety Grants - Island Health
Finding and keeping workers has been an ongoing challenge facing every sector and almost all employers in Greater Victoria and across the country. We need a larger workforce to enable organizations to reach their economic potential. One of the key solutions is to welcome more new Canadians to our region. Last year, Canada set a record for immigration as 431,645 people became new permanent residents — the most since 1913. The target for 2023 is 465,000.
Canada's labour force growth is almost 100% dependent on immigration. The Chamber has been working with community partners and our national network to advocate for immigration that prioritizes workers with skills needed by employers. We're also working to ensure Greater Victoria receives its fair share of immigration, which typically gravitates to Canada's larger cities.
The federal ban on foreign purchases of Canadian homes is now in effect. The intent of the regulation is to free up housing to meet the intense demand that has seen real estate prices skyrocket over the past decade. However, just how effective the rule will be remains to be seen as foreign buyers account for less than 0.5% of real estate sales in BC.
The prohibition isn't permanent. It's set to run for two years and does not apply to non-Canadians who are looking to rent. The Act defines residential property as buildings with fewer than four homes, as well as parts of buildings like a semi-detached house or a condominium unit. The law does not prohibit the purchase of larger buildings with multiple units.
Anyone convicted of violating the Act faces a $10,000 fine, and non-Canadians could face a court order to sell the house.
As property assessments arrive in BC mailboxes, people in Greater Victoria can expect a mixed message about the value of their properties.
“Homeowners across Vancouver Island can generally expect about 10% to 20% rise in assessment values with a few exceptions," BC Assessment's Vancouver Island Deputy Assessor Jodie MacLennan said in a news release. “While the current real estate market has been trending downwards, it is important to consider that 2023 assessments are based on what your home could have sold for as of July 1, 2022, when the market was performing higher."
The increase in property values is reflected in an increase to the threshold for the Home Owner Grant, which is now available for properties worth up to $2.125 million. The grant amount has not changed, however.
An increase in your BC Assessment does not directly result in an increase to your property taxes. If your property increased by the average rate or less for your municipality, your taxes could decrease.
On behalf of the Chamber board, and everyone on the Chamber team, I want to personally extend a warm holiday greeting to all of our members and community partners.
The resilience and leadership shown by our business community continues to inspire me as we seek solutions to the challenges of our times. Our mission remains relevant. We Work Together to Build Good Business and Great Community for All.
In 2023, The Chamber celebrates our 160th anniversary and we are committed to creating connections through events and other initiatives. We are grateful for the leadership and compassion of our Chamber Champions. We are ready to roll up our sleeves to make life a little better in Greater Victoria. And we promise to do more to ensure we are inclusive and provide space for people who may not have felt welcomed in the past.
There is work to do, and we are eager to get started. But for the next few weeks, I hope all of you can join us in taking some time to reflect, recharge and reset for the year ahead.
This is our final newsletter for 2022. We’ll be back in January with a full list of upcoming events and the latest news about Chamber members and information important to business.
Take care of yourself and your families.
Wishing all peace on earth these holidays.
CEO, Greater Victoria Chamber of Commerce
Please note that The Chamber will be taking a break from Dec. 23 to Jan. 1. Wishing you a safe and happy holiday!
BC Premier David Eby gave cabinet a new look today.
Among the changes for Greater Victoria, Oak Bay MLA Murray Rankin remains as Minister of Indigenous Relations and Reconciliation but will no longer serve as Attorney General. Saanich South MLA Lana Popham is the new Minister of Tourism, Arts, Culture and Sport.
Victoria-Swan Lake MLA Rob Fleming retains his role as Minister of Transportation and Infrastructure and Esquimalt-Metchosin MLA Mitzi Dean stays on Minister of Children and Family Development. Victoria-Beacon Hill MLA Grace Lore was named Minister of State for Child Care.
Victoria-raised Ravi Kahlon, MLA for Delta North, will lead the newly created Ministry of Housing.
Other prominent roles went to Katrine Conroy, who takes over as Finance Minister, and Niki Sharma, who is now AG.
Could this be the end of interest rate increases? The Bank of Canada increased its rate today to 4¼%, but softened the language it uses around future increases.
A statement from the bank said the bottlenecks that had been affecting global supply chains are loosening.
The Consumer Price Index was at 6.9% in October, though core inflation was 5% — much closer to the bank's target of 2%.
"Three-month rates of change in core inflation have come down, an early indicator that price pressures may be losing momentum," the bank stated. "However, inflation is still too high. The longer consumers and businesses expect inflation to be above the target, the greater the risk that elevated inflation becomes entrenched."
Make sure to consult with your preferred financial and mortgage advisors —The Chamber's Member Directory is a great place to find experts who can help you make your business thrive.
Greater Victoria continues to have one of the tightest labour markets in Canada. The latest numbers from November show our unemployment rate is back to 3.5%, according to Statistics Canada. That's down from 4.3% in October and closer to where the region typically was before the pandemic.
"We know there is work in our region and that makes us attractive to ambitious people who want to move here and build their careers," Chamber CEO Bruce Williams said. "Our regional economy benefits from having the stability of BC government jobs as well as CFB Esquimalt. However, we still need to address housing supply in Greater Victoria to make sure we can retain people who want to work here and contribute to our community."
There is some good news on that front as new construction jobs appear to be driving the lower rate. There were 18,400 people employed in construction this November compared to 13,500 in November 2021.
Businesses that service the real estate industry are a major contributor to Greater Victoria's economy. However, rising interest rates have slowed sales. Throw in the traditional quiet period around the holidays and fewer properties are changing hands. Only 384 sales were recorded in the region for November, down from 653 last November.
There are also concerns about potential unintended consequences of recent changes to the provincial Strata Property Act.
"It is an open question whether these changes will bring any additional rental stock to the market — with BC's complex Residential Tenancy Act not all homeowners of vacant strata homes have a desire to become landlords and current interest rates are less attractive to investors who may want to purchase strata rental properties," Victoria Real Estate Board President President Dinnie-Smyth said in a news release. "It is also possible that these measures will contribute further to eroding housing affordability as older stratas with rental restrictions were generally valued lower than their rentable counterparts."
Slower sales have also contributed to a slight dip in market values over the last few months. That could mean some property assessments — being sent out soon to homeowners from BC Assessment — will be higher than current market value.
“I want to emphasize that assessments are based on July 1 values of this year, meaning that when similar properties were sold up to and around July 1, those market value sales are used to calculate your assessed value," Assessor Bryan Mura said in a news release. “An increase in assessment value does not, however, necessarily result in an increase in property taxes. Taxes are typically only affected if you are above the average value change for your community."
This holiday season, be sure to shop locally and sustainably! Follow these Chamber tips to help your local community and the earth as a whole.
Inflation has become the top concern for many businesses. The Chamber is hearing from many members struggling to balance higher costs by adjusting prices and raising wages to keep staff.
On top of this, the increased emphasis on tipping that took hold during the pandemic has created new challenges for employers, employees and customers.
The issues and a few solutions are the subject of a new series that recently ran in the Times Colonist. The articles shine a light on how tipping was affected by social changes over the past few years, as well as consumers reliance on debit cards and tax implications for people whose income relies on tips.
It's well worth the read as we head into the holiday shopping season!
BC Premier David Eby hasn't wasted any time putting his stamp on the provincial government. In less than two weeks, the province has rolled out a series of almost daily announcements that take aim at some of the top concerns facing British Columbians.
Among the barrage of news releases was a promise to add $230 million to RCMP funding to increase staff and a plan to train more doctors. Those, along with announcements of a new Housing Ministry and a strategy for making communities safer, are welcome news. The Chamber will continue to advocate for business as these announcements move from the idea stage to implementation.
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The federal government released Canada's Indo-Pacific Strategy this week, providing a guideline for future engagement with this massive economic region. The Canadian Chamber welcomed the news.
“In addition to increasing our presence in the region, much of the important work that needs to be done is here at home," Canadian Chamber of Commerce’s President and CEO Perrin Beatty said. "Any successful strategy must give an enhanced priority to building the trade-enhancing infrastructure that is needed to significantly increase our exports. Additionally, the rapidly-growing communities of Canadians who trace their roots to the region provide a much-underutilized source of people who speak the languages, understand the cultures and have networks of family and friends in the region and who could help to strengthen our trade and investment ties."
The Indo-Pacific accounts for 65% of the world's population and is Canada’s second-largest regional export market, after the United States, with annual two-way trade valued at $226 billion.
Almost 20% of Canadians have family ties in the Indo-Pacific, which also provides 60% of Canada’s international students.
A movement that initially took hold in the City of Victoria is set to become a Canada-wide initiative as of Dec. 20. The federal Single-Use Plastics Prohibition Regulations aims to stop the manufacture, import and sale of bags, cutlery and other items made with problematic plastics.
The Chamber worked closely with Victoria and other local governments. Our goal was to make sure the initial regulations incorporated innovations that businesses were already using to address consumer concerns. The public has, for many years, supported businesses that provided alternatives to plastic waste. Having the same rules across the country will help businesses work with the requirements efficiently and effectively.
Access to affordable housing is key to ensuring Greater Victoria employers are able to find and keep workers. Yesterday, the province announced a new ministry would be created to focus solely on housing and, on Monday, BC Premier David Eby unveiled three actions aimed at quickly getting more homes built.
"The Chamber has long been vocal about the need to streamline processes and invest in programs that increase housing supply," Chamber CEO Bruce Williams said. "We're happy our new Premier is listening, and we look forward to working with the province to connect the businesses and people who make housing happen with the policy makers who need to support them."
The new Minister of Housing will be named on Dec. 7, when Premier Eby shuffles cabinet. The action plan will see strata rules changed to reduce vacancies and end restrictions against young families. As well, the province will monitor municipalities and step in if local governments are unable to get homes built.
“Housing affordability and availability are among the biggest problems people in Saanich and across the province are facing," District of Saanich Mayor Dean Murdock said in the news release. "We all need to work together to address this issue and deliver the homes people need for sustainable and thriving communities. I’m glad the Province is taking these steps to help ensure municipalities build the housing people in their communities need.”
Safe communities are fundamental to business as everyone deserves to feel secure at home and in their workplace as well as on the commute between.
The new Safer Communities Action Plan includes a promise to make it harder for violent repeat criminals to get back on the street after being jailed. The plan also states there will be more help for people suffering a mental health crisis to try and prevent situations from escalating to the point police are needed. As well, the gains of crime will be targeted by a new “unexplained wealth order.”
“Root causes of tragedy, crime and victimization are found in social, economic, cultural and societal systems that create inequities and disadvantages for individuals, families and communities," Police Victim Services of BC executive director Ian Batey said in the province's news release.
Victoria Police Chief Const. Del Manak said police officers deal with the impacts of mental health and addictions daily, including challenges with violent, repeat offenders.
“I support initiatives that enhance social services, connect people to the services they need and prioritize public safety," Chief Manak said. "I look forward to working with government on our shared vision toward community safety and well-being.”
A pair of announcements over the last week offered good news for efforts to find and keep workers in Greater Victoria. On Nov. 16, the federal government listed changes to the types of jobs considered high demand. Sectors such as health care, construction and transportation will benefit from having 16 new occupations included under the Express Entry system.
Meanwhile, BC announced today a plan to encourage more skilled immigrants to settle outside of the Lower Mainland. That should help regions such as Greater Victoria. The incentives give candidates in the Provincial Nomination Program a higher priority if they have worked outside of Metro Vancouver. The same priority will be given to recent grads of post-secondary schools outside of the Lower Mainland.
The provincial government has announced funding for close to 100 events in BC through the Tourism Events Program. Among the Greater Victoria events to receive grants are the Rifflandia Festival, the Royal Victoria Marathon, Dragon Boat Festival, JazzFest and Symphony Splash.
In April, the province announced $4.8 million for the program, which aims to boost BC's reputation as a destination for major events.
There is something truly spectacular about seeing the lights of Victoria dancing on the waters of the Inner Harbour. That experience is about to get even more impressive as a new attraction is set to debut Dec. 2.
Spearheaded by the Ralmax Group of Companies, the Victoria Harbour Lights: A Winter Dream will feature interactive lights, sounds and animations. The displays will be visible from the shore and on the water, with a special tour available for Victoria Harbour Ferries passengers.
The displays will serve as a draw for people to go downtown, and will help more locals experience the uniqueness of our region's working harbour.
“We have something that is very special, very unique and we should certainly embrace it,” Ralmax founder Ian Maxwell told the Times Colonist.
Lights of Wonder
And while the Inner Harbour is set to shine from the water, the Downtown Victoria Business Association is planning to add their own magic to the city. Starting Dec. 15, Lights of Wonder will transform Centennial Square into a holiday wonderland. Light exhibits and a 40-foot tree will be on display until the end of the year, providing a festive backdrop for live entertainment, food vendors and more.