A report by Deloitte Canada released this week offers an insightful look into how housing plays a direct role in our economic productivity. Specifically, the report examines housing "not entirely governed by the laws of supply and demand."
The report calls this "community housing," which includes co-ops, non-market homes, social housing and lower-cost market rentals. Among the findings is that housing affordability in Canada is at its lowest point since 1990. Canada is also facing a problem with lagging productivity and we need to find ways to boost output without causing inflation to rise.
Through its research, Deloitte found adding community housing to a region supports economic development and productivity. Community housing had been a much more prevalent part of home construction until the 1980s. After several decades of little investment in this type of housing, more units are now being built — though they still represent a relatively small share of total stock being added.
The Canadian Mortgage and Housing Corporation recently reported that Canada needs 3.5 million new homes by 2030 to achieve affordability. Deloitte's report concluded that government investment in community housing will help meet this demand and boost our economy's potential output growth.
"If Canada’s community housing units as a share of total housing units were to increase from 2023 Q2’s level of 5.5% to 7% by 2030 this would require an increase of 371,600 units in Canada’s total community housing net stock," Deloitte's report stated.
For BC, this would equate to 50,870 additional units by 2030 — a 42% increase from 2023 levels. Doing so would increase provincial productivity by up to 9.3% adding $25
billion to BC's GDP.
Watching inflation numbers is a bit like going fishing. Anticipation builds as we approach the latest monthly update on the Consumer Price Index from Statistics Canada. And much like the feeling when you lower your rod into the water, even a subtle sign can feel exciting. The latest nibble to delight inflation watchers happened Tuesday as CPI came in at 3.1% for October. That marks a significant deceleration from 3.8% in September.
Lower gas prices helped lower inflation last month, while mortgage costs and food prices are keeping it higher than the Bank of Canada's target rate of 2%. The Bank makes its next interest rate announcement on Dec. 6, with expectations that it will hold steady before potentially starting to lower rates next spring.
The federal government's much-anticipated fall economic statement was released yesterday, Nov. 21. There were few surprises from a government that has little room left to spend and a tepid economic environment to work with.
"(The federal government) followed a highly stimulative fiscal framework following the pandemic, from which they had not significantly withdrawn as the economy hit its capacity in the past two years. That forced the Bank of Canada to apply even more restrictive monetary policy to offset the effects of the government’s stimulative impulses, akin to pushing the brake and gas pedals at the same time," the Conference Board of Canada said in its analysis. "Let us hope that the two policymaking bodies can begin to row in the same direction in the future as inflation pressures subside. Interest rates will likely be coming down next year, but negative federal fiscal balances also need to be pushed back toward neutral territory at a greater pace."
There are some positives for business as the statement included proposals to ensure open access to markets, fewer taxes on mental health support and relief for mortgage holders at risk from higher interest rates. The government also earmarked $15 billion for rental home construction, though there are no details on how the funds will deliver 30,000 new units as promised.
Consultations have begun on the 2024 federal budget and The Chamber will work with our national network to give members a voice in the process.
Advocacy efforts to extend the CEBA repayment deadline appear to be working. The Chamber and our national network along with many other business organizations are calling on the federal government to give businesses more time to repay without losing the forgivable portion of their CEBA loans.
Chamber Chair Kris Wirk said in a September media release that “The reality facing many small businesses — especially those in hospitality, tourism and retail — is that they have a viable path to making a full recovery but it’s going to take longer than expected.”
This week, federal Small Business Minister Rechie Valdez told BNN Bloomberg that she's heard the message and seen the struggles facing businesses firsthand. She promised to go back to government to do more.
Under the Canada Emergency Benefits Account, businesses that needed help during the pandemic were offered loans of up to $60,000. Part of the appeal was that one third of the loan would be forgiven if paid by the deadline, which was extended from Dec. 31 to Jan. 18. And while 2024 seemed like a long way off in the depths of the pandemic, unforeseen challenges with inflation and interest rates has kept many businesses from fully recovering.
Chamber member Megan Johns, owner of The Green Kiss explained the situation succinctly to CBC, noting that she was on schedule with her CEBA loan until operating costs began to soar faster than her business could grow.
"Margins are getting smaller and smaller and smaller due to the rising costs across the board," Johns said. "Every aspect of the business has become more challenging and it is more challenging now than it was in 2020 so far."
Last week's announcement by the federal government that it was working with Canada's largest grocers to stabilize food prices is a start. But it will take more than blaming business to bring inflation back to its target rate of 2%.
On Oct. 5, the Minister of Innovation, Science and Industry said grocery store chains were committed to price stability. The government also moved to strengthen the voice of consumers, increase industry transparency and improve available data on Canada's agri-food supply chain.
Yesterday, an industry association representing grocers called for a pause on increases to the regulated price of milk. The Canadian Dairy Commission sets changes to the cost of milk that take effect every February.
"If government is serious about reducing the price of groceries it needs to look at cutting costs before products get to retailers," Chamber CEO Bruce Williams said. "Government contributes to cost increases when it adds regulatory burdens and increases taxes. We can't expect farmers and other producers to pay for these extra costs which get passed along to the consumer."
In Greater Victoria, The Chamber serves as the voice of business by amplifying what we hear from our members. We can then further raise the volume by working with our national network to include the questions and concerns of more than 200,000 businesses across Canada.
A recent example is the 2024 pre-budget recommendations submitted by the Canadian Chamber to the federal government. The submission calls for for investment in trade-enhancing infrastructure, easing the burden of doing business, facilitating the transition to net-zero, enabling an innovative economy, attracting and retaining talent and taking a lead role in life sciences.
To learn more about the work done by The Chamber's Public Policy and Advocacy committee, contact firstname.lastname@example.org.
The Chamber is calling on the federal government to give businesses who needed help during the pandemic more time to repay their Canada Emergency Business Account loans.
A letter to the federal Finance Minister was signed by more than 240 Canadian business organizations.
"Extending the repayment timeline for the CEBA loan without losing access to the forgivable portion would give many small-and-medium size businesses the stability and certainty they need to get back on their feet on a path to prosperity," states the letter.
Chamber CEO Bruce Williams spoke to CFAX Radio this morning to explain why many businesses need extra time. Across Canada. almost 900,000 CEBA loans were approved during the pandemic.
"Many businesses had no choice but to take on this loan due to circumstances beyond their control," the letter states. "This includes businesses in some of the hardest hit industries such as the retail industry and tourism sector. Mandatory business closures and other government health restrictions left businesses with severe income losses and cash flow issues."
The Chamber has been working to advocate for investment and policy changes that make all of our communities safer. It's a complex issue that requires a major increase in resources to treat people struggling with mental health and addictions.
That said, we're please to hear that the federal government has proposed changes to Canada's bail system to keep violent repeat offenders off our streets. The shift comes after BC moved to use tools available to the province to address repeat offenders.
"This is a start, but we need to address bottlenecks with our court systems and the length of time it takes to provide treatment for people who want help with mental health or addiction issues," Chamber CEO Bruce Williams said. "We don't have enough capacity in jails or treatment centres, and everyone requires a fair trial and can't be held on bail indefinitely."
The Chamber will continue calling on all levels of government to ensure resources are available for the adequate enforcement of laws and bylaws, as well as investment in long-term solutions that address the root of the issues. Everyone needs to feel safe where they live and work.
The fight against inflation is working as the Consumer Price Index for February was down 5.2% year over year. That compares to 5.9% in January and is the largest deceleration since April 2020. Lower costs at the pumps and for home energy helped lower the CPI, while the cost of groceries remains high as supply constraints and weather-related production issues is adding to the cost of food.
The global economy is getting back to normal but there's still a ways to go, says the Canadian Chamber of Commerce Chief Economist Stephen Tapp.
"In this context, the latest Canadian Survey on Business Conditions shows that costs and labour issues remain the biggest near-term obstacles for Canadian companies," Tapp said the Q1 2023 Canadian Survey on Business Conditions Report. "Even as higher interest rates slow demand, there are a few bright spots. First, while long-standing supply-side bottlenecks for the workforce and supply chains remain elevated, they have eased in recent surveys. This might be
because businesses are taking proactive steps to address these problems, such as raising wages, embracing flexible work options and working with suppliers. Second, while the near-term outlook for sales is clearly subdued, all things considered, most companies remain optimistic about the year ahead, especially larger firms and those in services."
The court-imposed deadline for deciding the future of the Island rail corridor arrived yesterday, but there is still much work to be done to decide the fate of the former E&N Rail line.
"In September 2021, the British Columbia Court of Appeal asked the federal government to decide by March 14, 2023, on restoring the railway corridor or allowing a segment of lands to vest in Canada for the use and benefit of the Snaw-Naw-As First Nation," said a joint statement by the federal and provincial governments, explaining that the decision was made to return 11.4 acres to the Snaw-Naw-As.
The corridor still has tremendous potential for Vancouver Island, which is expected to reach a population of more than one million people in the next decade.
“To that end, we are committing $18 million to allow for future corridor planning involving affected First Nations and regional districts," BC Minister of Transportation and Infrastructure Rob Fleming said. "The funding will also allow First Nations to assess identified concerns such as flooding, access, noise, or safety issues where the corridor crosses their land."
The Island Corridor Foundation had been waiting for the governments to announce their intention, and will now begin reviewing options for the best use of this important transportation link.
A $204.8-million contract has been awarded for a major project that will see the Royal BC Museum build an important new facility in the City of Colwood.
Construction is expected to begin this summer on the museum's Collections and Research Building as part of a long-term plan to protect the Province’s collections, including more than seven million artifacts and the BC Archives. Total capital project costs for the building are valued at more than $270 million. The project is being undertaken in consultation with the Songhees Nation and Esquimalt Nation.
The state-of-the-art facility will be 163,611 square feet and use mass timber construction to safely house the Province’s collections, BC Archives and research departments. There will also be dedicated research labs and learning spaces.
“Alongside the safe and modern storage of the collections and provincial records, the (Collections and Research Building) will be a dynamic and welcoming community space,” RBCM CEO said Alicia Dubois said. “We hope to inspire future paleontologists, entomologists, botanists and historians through greater learning opportunities by enhancing public access to our work.”
The new building will provide a secure location for a number of items that had been at risk, such as: archival books and manuscripts; rare and priceless artworks, including watercolours from the 1700s; several paintings by Emily Carr; and early provincial maps.
On Feb. 14, The Chamber facilitated a Zoom session with Paul Robinson of the Vancouver Island Transportation Corridor Coalition and Larry Stevenson, CEO of the Island Corridor Foundation.
Members of chambers from across Vancouver Island attended to listen and ask questions about the corridor's future. It's currently uncertain as a March 14 court-imposed deadline looms. In 2021, the BC Court of Appeals gave the federal and provincial governments 18 months to renew their commitment to improve the infrastructure required for rail. The deadline was triggered by a lawsuit launched by the Snaw-naw-as First Nation. They want to reclaim the land that runs through their territory, arguing the right-of-way granted by Canada in 1912 is no longer being used as intended.
Island communities enjoyed rail service for more than 100 years, until it was suspended indefinitely in 2011. Since then, a vocal group of train enthusiasts, environmentalists and transportation planners have been calling for a modern passenger train that will reduce the number of cars and transport trucks on Island highways, cut greenhouse gas emissions and offer an alternative for commuters.
Island communities have also lost inter city bus service creating yet another barrier to safe travel for people who can't access a vehicle. The Chamber has asked the Federal Government to subsidize a return of that service.
A health emergency that affects all segments of society resulted in 2,300 deaths in BC last year. As a response, the province formally announced that people will no longer face criminal charges for possessing a cumulative total of as much as 2.5 grams of opioids, cocaine, methamphetamine and MDMA for personal use. The substances are still illegal but police are no longer arresting drug users or seizing their supply. Instead, they will provide information on available social supports, health care and treatment options.
“By supporting British Columbia in this exemption to the Controlled Drugs and Substances Act, (the federal) government is providing the Province with the ability to help divert people away from the criminal justice system and toward the health and social services they need," federal Minister of Mental Health and Addictions and Associate Minister of Health Carolyn Bennett said.
Addiction and toxic drug deaths cause immeasurable damage to families and communities, and add huge costs to society. However, The Chamber is calling on the federal and provincial governments to do more to ensure treatment options are readily available.
"We know that programs like Our Place Society's New Roads has a proven track record of helping people recover from addiction," Chamber CEO Bruce Williams said. "The therapeutic-community based model has some of the best outcomes of any treatment in the world. However, it needs support from government to ensure it can remain operational and increase intake. We have an opportunity to do more, and eventually recreate the success of New Roads at facilities across the province."
As expected, the Bank of Canada bumped up its policy interest rate by a quarter point while signalling no further moves are planned until the impact on the economy can be more fully assessed.
"Inflation is projected to come down significantly this year," a media release from the Bank stated. "Lower energy prices, improvements in global supply conditions, and the effects of higher interest rates on demand are expected to bring CPI inflation down to around 3% in the middle of this year and back to the 2% target in 2024."
The Bank of Canada has hiked its rate eight times in less than a year. The moves have slowed business investment and dampened consumer confidence, adversely affecting most business sectors.
"We've been checking in with our members during this time and I know it's been difficult for many people facing higher costs," Chamber CEO Bruce Williams said. "We're focused on supporting members as we can, helping them build resiliency in their organizations while calling for smart investments from government so that our regional economy can come back stronger than ever."
Cruise ship season is tentatively set to begin April 11 with the arrival of 2,600 passengers aboard the Sapphire Princess. The year is shaping up well as the industry appears to have fully bounced back after the pandemic.
The Greater Victoria Harbour Authority anticipates 330 ship calls at the Victoria Cruise Terminal between April and October, with about 850,000 cruise passengers getting a taste of our destination. According to a survey, 53% of people who stopped in Victoria aboard a cruise ship said they would be back for another visit within five years.
“GVHA is focused on sustainable growth that benefits the region. We understand that, along with many economic benefits to the community, cruise also presents some challenges. We want to make sure we address those challenges,” GVHA CEO Ian Robertson said in a news release. “Shore power is top priority, and we continue to work with the federal government to get that funding piece in place. It’s a modest investment to realize huge potential and impact, and time to finalize the funding and move this ahead.”
Join The Chamber for a discussion with the Vancouver Island Transportation Corridor Coalition and Island Corridor Foundation on the work done towards identifying the need for, and public interest in, reinstating Island Rail Service.
"The provincial government is quickly approaching a critical decision point and must provide an answer on the future of the Island corridor by March 14," said coalition representative Paul Robinson, noting that reinstating Island rail service could help the Island's tourism economy and get more vehicles off the roads. "VITCC believes that rail is, by far, the most equitable mode of ground-based transportation as there are no age, health, ability, income impediments, and no requirements for vehicle operator ownership, licensing, and associated expenses."
The Chamber will be leading the discussion on rail as part of our role in The Island Chamber Advocacy Alliance, connecting business across the Island.
This free, virtual event is open to members of Chambers across Vancouver Island.
Island Corridor Foundation: Member since 2020
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.
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.
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.
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.
With winter looking likely to bring a chilling to Canada's economy as well as the weather, The Chamber is urging government to promote investment in business growth that can light the way through winter.
Working with our national network, The Chamber is calling on federal Finance Minister Chrystia Freeland to work together with business.
"Attempting to borrow our way to prosperity would only generate more debt and inflation," Canadian Chamber CEO Perrin Beatty said, noting a better way is to use available "no-cost and low-cost tools" that will increase government revenue and grow the economy. "These measures include reforming regulation, increasing labour force participation and eliminating longstanding barriers to interprovincial trade, while avoiding new taxes and ending rhetoric that portrays Canadian businesses as the problem instead of as partners in growing a stronger economy."
Minister Freeland is scheduled to provide a fall economic update on Thursday.
The legal sale of cannabis in BC continues to grow, potentially reducing the size of the black market. Statistics Canada's figures show that British Columbians spent $57.3 million on legal cannabis in July — the highest month yet recorded.
Since cannabis was legalized four years ago, statistics show one in five people report using the product over the past year. The Chamber supports fair rules for all businesses, and we believe that the community benefits from an industry operating with legal regulations that protect the public and provide certainty to businesses.
There is tremendous power in a coalition of organizations from every corner of the country that have an active role in connecting businesses with all levels of government. This was in full display earlier this month as the national chamber network gathered in Ottawa for the Canadian Chamber of Commerce's AGM.
"It really was remarkable to be among the voices of business communities from across Canada and hear how many of our concerns and challenges are shared," Chamber CEO Bruce Williams said of being a delegate at the meeting. "We were able to meet directly with a number of federal ministers and senior staff, who were quite keen to better understand what policies are needed to help businesses build resiliency."
Williams also introduced a policy resolution at the AGM, highlighting the need for federal support of child care to enable parents to stay in the workforce and continue their careers. The resolution was adopted, along with a number of others supported by The Chamber that further our Advocacy Priorities.