Some of the coverage of Jock Finlayson joining ICBA as our Chief Economist:
- CKNW Radio interview with Jas Johal (see transcript below)
- BIV story (ran in 2+ dozen Glacier Media properties)
- Jock’s op-ed in BIV (ran in 10 Glacier Media properties)
- Jock hired (Journal of Commerce)
Transcript of Jock on the Jas Johal Show:
Jas Johal (00:00:15) – The Independent Contractors and Businesses Association, or ICBA, the country’s largest construction association, today announced the appointment of Jock Finlayson as its inaugural chief economist. Now, if you probably don’t know many economists, but if there’s one economist known certainly do the business community in British Columbia, it would be Jock Finlayson. He previously served as executive vice president and chief policy officer at the Business Council of British Columbia, and he’s directed the council’s work on economics and fiscal tax and environmental policy as well, and certainly has provided lots of advice to many former premiers and Cabinet ministers as well. And I thought it was a good opportunity for us to catch up with him and get a sense of where he thinks the BC and economy, B.C. and Canadian economy are going. Jock, thank you for joining us today.
Jock Finlayson (00:01:04) – Thanks for the opportunity, Jas.
Jas Johal (00:01:06) – As ICBA’s new chief economist, one of your jobs, of course, is going to be looking at the broad economy across British Columbia, across Canada as well. Let’s start a little bit here in this province. What are you seeing? What concerns you in regards to British Columbia’s economy in the tail end of 2023?
Jock Finlayson (00:01:25) – Yeah, no, it’s a great, great question. And, you know, construction really depends on the health of the larger economy. It’s what economists call sort of derived demand. So it depends on our businesses in the province spending to grow and build things. Our households, you know, trading up on the real estate market. Is there lots of home building and activity like that, engineering infrastructure and public sector capital spending. So all of that really matters. And I, I would say B.C. is slowing in line with the country. The effects of dramatic interest rate increases that started in the spring of 2022, and it continued all the way through up until the fall of this year. Those those effects are beginning to bite. The cost of money has gone up considerably. The cost of capital has gone up. So that’s really weighing on many industries, including construction.
Jock Finlayson (00:02:28) – We’ve also got rising sort of government imposed costs, both taxes and regulatory burdens that are an additional headwind for companies in a lot of industries in B.C., including construction. So there’s there’s lots of challenges out there. I think over the medium term, the outlook is is reasonably good. But for now, we’re we’re in a bit of a crunch, that’s for sure. Now, one.
Jas Johal (00:02:53) – Of the things you’ve pointed out is that you’ve seen a significant growth of public sector employment over private sector employment. Is that still the challenge before us now?
Jock Finlayson (00:03:06) – Yeah, it’s a surprise when we look at the data, just how dramatic the disparity is between job growth in the broadly defined public sector and job growth in the public sector. And here I’m talking about payroll jobs, not not self-employment. And in B.C., we’ve actually been losing private sector payroll jobs over the past 12 months or so, even as the public sector has continued to expand by four and 5% a year in terms of payroll. And if you look a little back further in time, what’s even more surprising to me anyway, is that, uh, the number of private sector payroll jobs in the province has really not increased since 2019.
Jock Finlayson (00:03:48) – So we’ve gone through the better part of half a decade with essentially a flatlining of overall private sector job growth. The picture is different from industry and industry. That tells me we’ve got some problems in the business environment here. I think we’ve got governments in Ottawa and Victoria that view the economy through a lens where the public sector is driving everything rather than entrepreneurs and capital markets and and companies and innovators out in the private sector. So I think we’re kind of out of balance, out of kilter on the way A lot of our decision makers look at the economy. And if I was in government, I’d be quite alarmed at the lack of job growth in the private sector. We’ve had this narrative that the labour market is supposedly been booming in B.C., but a lot of that was just the rebound, frankly, from the Covid restrictions. And if you look sort of deeper into the data in the broad private sector, there hasn’t been any kind of a rebound looking at across all the different industries that make up the private sector in aggregate.
Jock Finlayson (00:04:57) – And that’s different than the rest of the country. Other provinces, we everybody has seen the public sector expand, but other provinces have done better than B.C. in growing private sector payroll jobs. So we do stand out as a weak performer there.
Jas Johal (00:05:10) – How long can we sustain this then, I guess? Is there a fiscal reckoning coming in your mind? I mean, you can’t just have public sector job growth and private sector remain weak. I mean, there is a fiscal reckoning coming then, is there not?
Jock Finlayson (00:05:27) – Well, if this were to continue kind of indefinitely, it obviously isn’t isn’t sustainable at the end of the day, the the tax base, which is where most the revenues come from to pay for all the public programs and services and people working in the public sector. Ultimately, the taxpayers depends critically on the on the size and the vibrancy of the private sector economy. And so we’re not we’re not in a we’re not on a sustainable trajectory, that’s for sure. Which is why I think it’s important that policymakers acknowledge that we’ve had a very lopsided economic rebound from the Covid shock of 2020 and 21.
Jock Finlayson (00:06:06) – And we need to be looking at kind of changes in policy that will create a more attractive environment for the private sector to expand rather than just growing government, which is kind of what we’re doing right now.
Jas Johal (00:06:18) – Well, Jock, congratulations on your new position as the ICBA’s chief economist. You know, you’ve done a tremendous amount of work over the many, many years that the Business Council of British Columbia, well known, of course, in business circles and and among elected officials as well. And the great work that you do. Congratulations to you once again. And thank you for your time today.
Jock Finlayson (00:06:36) – Yeah, good. I’m sure we’ll be talking to you again. Take care.
