9 minute read
FINANCE
FINANCE The B.C. economy and the Broadway Plan: an explainer
by Charlie Smith
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Finance Minister Selina Robinson faces a monumental challenge in the wake of the pandemic: large annual deficits could create a fiscal mess if interest rates drive up debt-servicing costs.
The B.C. government is in a nancial pinch and things may not get better for a while. is scal year, Finance Minister Selina Robinson has forecast a $5.5-billion de cit. at will be followed by a $4.2-billion shortfall in the following year and a $3.2-billion de cit in 2024-25.
It adds up to B.C. being nearly $13 billion in the red over three years. at is, if everything goes according to plan.
Over that period, the taxpayer-supported debt is anticipated to climb from $61.7 billion in 2021-22 to $90.9 billion by 2024-25. at, too, is based on everything going according to plan.
“ e Province’s debt-servicing costs remain at a historically low level due to prevailing low interest rates,” the 2022-23 budget document notes.
In fact, rising interest rates have led the Finance Ministry to forecast unit home sales to fall by 22.2 percent this year, 7.1 percent next year, and then stay at from 2024 to 2026. ere are many reasons why the B.C. government is eager to have more homes built. Canada has a relatively low number of homes per capita in comparison with other OECD countries. ere will be greater labour shortages as the population ages, which will need to be addressed through immigration. Most immigrants move to urban and suburban areas.
Moreover, a growing supply of homes has the potential to temper the rising cost of ownership, which has become a political powder keg for the B.C. government. More rental stock is also necessary.
If the province is going to be sinking billions of dollars into rapid-transit projects, it makes sense, environmentally, to have more people living near those stations. Creating compact communities results in a lower ecological footprint.
But there’s another reason for the B.C. government to push for greater density, which is rarely discussed. To put it simply, the province needs the money. Badly.
Once upon a time, people said that for every dollar generated in B.C., 50 cents came from forestry. at’s far from the case today.
B.C. government forests revenues clocked in at $1.85 billion in 2021-22, due to a short-term spike in the price of lumber. at is expected to fall to $1.12 billion in this scal year before plunging to $887 million in 2023-24. It’s a similar story with natural-gas revenues. ey’re forecast at $911 million this year, falling to $691 million the next scal year, then dropping to $580 million by 2024-25.
Fuel-, carbon-, and tobacco-tax revenues will remain at. Medical-services premiums are now dependent on the health of the economy, because employers are paying the tab.
And property-transfer-tax revenues are also not going to come close to the $3.25 billion generated in 2021-22. e best they’ll do over the following three years is $2.5 billion, according to the Finance Ministry.
A massive home-building initiative offers a way out of the scal mess.
First of all, most of this would be nanced by the private sector. at ensures the B.C. government won’t have to add more to the ballooning taxpayer-supported debt. Secondly, when those homes are sold, it will fatten the provincial treasury through property-transfer taxes.
One of the bright spots in the B.C. economy in recent years has been agriculture. But the breakdown of the hydrologic cycle—caused by a rising global temperature that creates more atmospheric rivers—is delivering a body blow to farmers.
Heavier rainfalls are reaching deeper into B.C.’s mainland. e infrastructure there wasn’t built to withstand that. And we probably haven’t seen the worst of the runo s from the mountains, which have potential to cause rivers, including the mighty
May 12-19 / 2022
9 COVER
In Joe Ink’s Dance:Craft, Heather Dotto and Joey Matt interact with objects made of ceramic, glass, metal, wood, and fibre. By Charlie Smith Cover photo by Michael Slobodian
6 REAL ESTATE
Rising interest rates have coincided with a short-term decline in housing prices and the number of sales in East Vancouver. By Carlito Pablo
12 COMEDY
Roy Wood Jr. used to be known for his crazy prank calls, but in recent years, he’s been using comedy to shed light on serious social issues. By Steve Newton
e Start Here 10 ARTS 8 BEER 18 CLASSIFIED ADS 13 DANCE 15 DOXA REVIEWS 2 FINANCE 7 HOUSING 5 INVESTING 16 MUSIC 17 SAVAGE LOVE 14 VISUAL ARTS
Vancouver’s News and Entertainment Weekly Volume 56 | Number 2830
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Here’s what people are reading this week on Straight.com.
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50 things to do in Vancouver this week, May 9 to 13.
Justin Trudeau, Chrystia Freeland, and Mélanie Joly travel to Ukraine.
Canada’s four biggest housing markets show early signs of softening demand.
Second-degree-murder charge laid in connection with CRAB Park homicide.
Rolling Stones will release Live at the El Mocambo on Friday (May 13).
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EDITOR Charlie Smith
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from page 2 Fraser, to overflow their banks. As oldgrowth continues to be logged, there’s less capacity for forests to hold back the water.
Meanwhile, longer dry seasons and hotter temperatures, in some cases driven by changes to the jet streams, will likely lead to more brutal forest fires, also undermining the B.C. economy. The fishing industry is also vulnerable because rising water temperatures make it more difficult for salmon to reach the spawning grounds.
It’s true that technology has been a bright light. And a great deal of technological wizardry is reflected in Vancouver’s world-class visual-effects and animation sectors. Let’s hope that they remain resilient in the face of declining box-office revenues in the movie industry as a result of COVID-19.
Then there’s COVID-19’s impact on tourism, another economic mainstay. It’s hard to conceive of it ever returning to its glory days before the pandemic. With each new variant, there is the potential for future lockdowns.
That’s to say nothing of the pernicious impact of long COVID on the labour force and its impact on health-care costs.
The B.C. NDP is probably already thinking about how it’s going to get reelected in 2024 in the face of these headwinds. The party’s brain trust realizes that putting more shovels in the ground for housing projects can keep the economy humming.
Of course, that requires having enough construction workers at the ready—which is far from a sure bet, as the Straight reported last month. The lack of skilled tradespeople is already causing building costs to shoot through the roof. Supplychain issues are also dogging this sector.
It’s not a pretty picture.
Plus, there’s opposition to densification in various communities.
On May 7, hundreds gathered outside Vancouver City Hall to protest the Broadway Plan. It proposes a dramatic increase in density over a 500-block area of the city. It covers a stretch of land from Vine Street to Clark Drive in the general vicinity of Vancouver’s newest SkyTrain extension.
Tenants are feeling vulnerable. This is notwithstanding Mayor Kennedy Stewart’s pledge that no tenant along Broadway today will see their rents rise in the event of redevelopment. He says the Broadway Plan will offer paid relocation to a temporary rental, with a top-up keeping interim rents the same.
Stewart is assuring these tenants that they will be given a right of first refusal to return to the new project with rent at 20 percent below the Canada Mortgage and Housing Corporation’s citywide average rents.
“For those already paying high rents along Broadway, this means you could see your rents fall, once you move back to your new building,” Stewart declared in a news release. “But for those paying low rents today, I want to go even further and make sure you won’t have to fear paying more as we renew and expand housing along Broadway.”
It’s a delicate balancing act. Tenants have long formed an important NDP voting bloc.
Yet the B.C. government essentially feels that it needs to kick a fair number of them out of their homes for several years as new towers go through the approval process and are built. This is part of its grand plan to densify a significant chunk of Vancouver to help pay the bills and avoid being slaughtered in the 2024 election.
The higher property-tax revenue will also fatten the treasury at city hall.
Why is this necessary?
To put it bluntly, the B.C. NDP must avoid allowing the taxpayer-supported debt to rise above $100 billion by the time the next election rolls around. Otherwise, Premier John Horgan risks becoming mincemeat for the B.C. Liberals under new leader Kevin Falcon.
The answer—for Robinson and Horgan—is to build as many homes as possible. Attorney General David Eby is the chief salesman for this project as the minister responsible for housing. And Mayor Stewart is a willing accomplice. g
WE NEED BILINGUAL CHINESE VOLUNTEERS TO VISIT WITH CHINESE SENIORS
Jewish Seniors Alliance has been providing peer support to seniors since 2011.
Jewish Seniors Alliance is looking for bilingual Chinese Volunteers who speak either both English and Cantonese and/or English and Mandarin to volunteer and visit (phone) Chinese older adults.
We have a variety of opportunities to train volunteers in:
Senior peer counselling for volunteers 55+, a certifi ed program by Senior Peer Counselling of BC.
And for volunteers 18+ who want to gain experience working with and supporting seniors we have the following programs:
- Friendly visiting - Friendly phone calls - Walking program Computer loan and technical support. At the end of the training you will get a certifi cate. All training is provided at no cost.
JEWISH SENIORS ALLIANCE
“Seniors Stronger Together”
JSALLIANCE.ORG
For further information please contact Charles Leibovitch,
Jewish Seniors Alliance Peer Support Coordinator 778-840-4949 OR / EMAIL: CHARLES@JSALLIANCE.ORG
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