B.C. has worst-performing economy in Canada for young people: report
B.C.’s high growth rate and low unemployment pale in comparison to skyrocketing personal debt rates and housing costs, argues researcher
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British Columbia’s buoyant economy has been a strong selling point for the jobs-focused BC Liberals, especially as the province heads into an election on May 9.
But according to a new report, B.C.’s economy is now the worst-performing for young people — and economic conditions have declined most rapidly on the BC Liberal’s watch.
“Most of the information people get about the economy is coming from commercials that are provided by the government of B.C.,” said Paul Kershaw. The University of Britsh Columbia professor is the founder of Generation Squeeze, a national advocacy group for Canadians in their 20s, 30s and 40s.
“Those commercials only give a partial sense of what’s going on in the economy because they tell one stat: that we have the best growth rates in the country.”
A different picture emerged for Kershaw when he and his team included earnings, housing price growth and personal debt levels in their analysis. Although the report does not paint BC Liberal stewardship of the economy in a kind light, Kershaw emphasizes Generation Squeeze is not endorsing any political party.
“B.C. out of all the provinces reports the biggest hit to full-time earnings, for all age groups, compared to four decades ago. It’s especially bad for younger generations, who earn $8,000 to $10,000 less,” Kershaw said.
“Even just on Christy Clark’s watch, young adults with full-time jobs are earning $1,200 less per year pre-tax than before the premier took office.”
In B.C. especially, ballooning real estate prices have impacted the financial prospects of the province’s 25-44 year olds.
“No other province has lost control over home prices in the same way that B.C. has,” Kershaw observed, while acknowledging that the B.C. government did eventually introduce a foreign buyer tax in Metro Vancouver in an attempt to slow an overheated real estate market.
Ontario, which has also had strong economic growth and sharply rising real estate prices, performed second-worst in the Generation Squeeze analysis.
While the current B.C. government has managed to keep public debt under control, Kershaw said his analysis shows personal debt of younger generations has skyrocketed since 2001, when the BC Liberals took power. The Liberals have performed better in reducing public debt compared to the rising public debt levels of the 90s-era NDP government.
But Kershaw said the steep rise in personal debt after the Liberals took power amounts to a government offloading debt to residents.
“The provincial Liberals maintained that economic debt-to-GDP ratio partly because they let post-secondary (tuition) in B.C. increase faster than anywhere else in the country. They’ve allowed childcare to spike, and rents have been tracking to some degree the escalation in home prices.”
The analysis shows it’s gotten tougher not just for younger people in Metro Vancouver, where housing prices are highest, but in towns like Prince George and Kamloops as well.
For instance, in Prince George it now takes seven years to save for an average home down payment; between 1976-1980 it took four years. In Kamloops, that saving time has increased to nine years compared to four years; in Kelowna, it now takes 12 years to save for a down payment compared to four years.
As the election nears, Generation Squeeze plans to evaluate B.C. political parties’ platforms.