View all events here
View all news here
View Chamber Events
Jobs are always a top issue in a federal election, but
with this shaky economy, it’s fast becoming the
number one priority. Opposition parties have made
much of the recent bad news: in the first quarter,
Canada’s GDP shrank by 0.6%, exports tumbled 5.6%
and corporate profits fell by 14% as the drop in oil
prices slammed the Canadian economy.
And yet the Canadian labour market has held up well,
adding an average of 20,000 jobs per month since the
beginning of 2015. In fact, Canada added a rip-roaring
59,000 jobs in May. What gives? Where are these jobs
coming from in the midst of economic despair?
Our regional differences are as stark as ever. Energyrich
provinces once drove job creation while the
manufacturing sector of Central Canada lagged
behind. Now lower oil prices and a weaker Loonie
have flipped the numbers. Still, the outlook is very
There are now 25,000 fewer jobs in the Alberta oil
patch, but there is good reason to believe that the
worst is behind us. Firstly, oil prices have stabilized
around the $60 range and are headed slightly higher.
The market no longer fears a drop to $20 as Citibank
had predicted. Secondly, oil sands projects require
huge upfront investments, but once those are made,
they can go on producing for years with relatively low
costs. And they need to keep operating continuously:
most can’t be shut down without damaging the
equipment. Thirdly, new investments are on-track
with 10 new oil sands projects scheduled to start this
year and 7 set for 2016 with total capacity over 300,000
barrels per day, according to Oil Sands Review. These
are probably safe because once they’re partially paid
for, “you don’t stop a project mid-cap-ex”. Some
exploration and drilling activity has been scaled back,
but job losses should ease.
In manufacturing, the outlook is much improved and
the parties have all pledged support for the sector,
which is certainly welcome. The challenge is that
manufacturers are increasing production by investing
in capital and new technologies: they’re becoming
more efficient and more competitive. As a result, we’ll
see an impressive resurgence in manufacturing and
exports, but it may not translate into big job gains.
The political parties are missing the big picture by
focusing so much on jobs in manufacturing and
natural resources because together they account for
just 11% of the labour force. The overwhelming
majority (78%) of Canadian employment is in the
service sector and recently it’s been the fastest growing
part of our economy.
Services are a poorly understood grab bag of different
occupations. It’s sometimes perceived as low-paying
because it includes retail and restaurants, but there are
also scientists, engineers, lawyers and financiers.
Over the past year, Canada’s fastest job growth is in
sectors like business and support services (up 4.5%
compared to last year), education (up 4.1%), finance
and insurance (up 3.5%) and professional, scientific
and technical (up 1.7%), while retail has barely budged
(0.3%). And the gains in high-end services
employment are spread right across the country.
With the election just around the corner, we would
love to hear a politician say: “we need highly
specialized skills to compete and succeed in the service
economy. That’s why we must invest in Canadian
education and training to make it the best in the
-Hendrik Brakel, CCC
When someone asks where commodity prices are
headed, they’re really asking: what’s the outlook for
Last year, China consumed more coal than the rest of
the world combined and imported 70% of the world’s
seaborne iron ore. In 2012, China accounted for half of
the global growth in oil demand. It’s a commodity
behemoth and the recent slow-down in the Chinese
economy is a big reason for weakness in prices for this
sector. Should we be worried?
China’s economic growth is definitely slowing, but the
real concern is that official estimates of China’s GDP
growth are overestimated. Economists are scratching
their heads and coming up with widely varying
Why all this guessing? China’s growth numbers are
always suspiciously consistent and always within 0.2%
of the government forecast. Moreover, skeptical
analysts see hard data, such as industrial production,
energy consumption and construction, which are much
weaker than GDP, and are using it to create their own
estimates of what is going on. But it’s not just the data
that is worrying.
The big question is China’s real estate. Property prices
in 70 Chinese cities have fallen for more than a year,
and 60 million empty apartments await buyers.
The Chinese government is well aware of the risk and
has taken action. The Central Bank has lowered
interest rates three times and it has twice reduced the
amount of reserves that banks must hold, while easing
mortgage rules. Still, new construction starts have
fallen 16% in the first five months of 2015, a significant
hit to the economy.
The challenge is that China is trying to shift the focus
of its economy away from exports towards domestic
growth, all while gently deflating a housing bubble.
China has lots of resources, $4 trillion of reserves and
its tight control of the banking sector gives it policy
levers that other governments could only dream of.
The Chinese government can intervene to stimulate
demand, but China’s economy will grow a slower
What does it all mean for commodity prices? The
following graph shows China’s demand growth for oil,
which has been massively volatile, oscillating from
16% growth to 2%. And that was during times of
smooth sailing. We believe commodity prices should
improve in 2015, but producers should brace
themselves for more volatility as the world’s biggest
consumer of natural resources has a bumpy road
-Hendrik Brakel, CCC
Recently, our CEO, Caroline Grover and myself travelled to Prince George for the BC Chamber
AGM. We brought forward five resolutions from our membership and received support from
our colleagues across the Province.
The theme this year for four resolutions seems to be the continuing fight on four separate
issues where we have seen some success and support from Provincial and Federal
governments, but feel that there is still room for improvement. We recognize the positive
support the BC and Canadian Chamber networks receive from government on many of our
resolutions and sincerely appreciate that we are their go to organization representing business.
-Ken Carmichael, President, KCC