NCPA - National Center for Policy Analysis

A Comparison Of Growth In Three Canadian Provinces

January 8, 1999

While Ontario and Alberta are enjoying higher growth rates and unemployment rates below the national average for Canada, the economic growth rate in British Columbia has declined, disposable income has fallen and employment growth leveled off.

A recent Fraser Institute study say these and other differences in economic performance are due to the provincial governments' policies.

  • The annual growth rate of British Columbia's real gross domestic product (GDP) fell from 2.6 percent per year for the period 1991-1994, to only 1.1 percent for the period 1995- 1998 .
  • By contrast, real gross domestic product per capita for 1998 was projected to grow by 2.7 percent in Ontario and by 1.5 percent in Alberta.
  • Furthermore, the unemployment rate in British Columbia in November 1998 was 7.9 percent (the national average) -- a percentage point higher than Ontario's 6.9 percent unemployment, and 1.7 points higher than Alberta's 6.2 percent.

British Columbia is performing poorly because the government has substantially increased public spending, the public debt and the tax burden in recent years, says the Fraser Institute. It has also adopted more inflexible labor policies, such as banning the use of replacement workers during strikes, allowing secondary picketing and eliminating secret ballots in union elections.

Both Ontario and Alberta have a much lower tax burden and more flexible labor policies. For instance, Ontario's government cut personal income taxes, plans to eliminate the deficit by 2000- 2001, targeted over 1,500 different regulations for elimination and repealed antibusiness labor laws. Meanwhile, Alberta balanced its budget, plans to eliminate its public debt, and achieved one of the lowest levels of corporate and income taxes in Canada.

Source: Satinder Chera and Fazil Mihlar, "The Government of British Columbia,1991-1998," October 1998, Fraser Institute, 4th Floor, 1770 Burrard Street, Vancouver, B.C. V6J 3G7, (604) 688-0221.

 

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