COS Financial Plan 2018 - 2022

ECONOMIC OVERVIEW

BRITISH COLUMBIA

BC’s GDP growth is forecasted to come in at 2.5% in 2018 due to strong employment and consumer spending. The unemployment rate is forecasted to remain around 5%. The tourism and film sectors are expected to do well due to the lower Canadian dollar. Headwinds facing BC include, slowing of the housing sector, the ongoing softwood lumber dispute with the US and uncertainties surrounding the renegotiation of NAFTA. The BC Real Estate Association is predicting a 10% decrease in residential real estate sales volumes in the upcoming year. Rising interest rates and more stringent mortgage rules are expected to negatively impact the amount of borrowing home buyers will qualify for. Despite tempered demand, residential sale prices are expected to rise 4.6% due to a low supply of homes for sale. The Canada Mortgage and Housing Corporation forecasts BC’s new housing starts at 37,500 units in 2018, down 7% from the prior year.

Gross Domestic Product 2014 - 2018

+0.0% +0.5% +1.0% +1.5% +2.0% +2.5% +3.0% +3.5% +4.0%

2018 Forecast Canada USA BC

2014 Actual

2015 Actual

2016 Actual

2017 Actual

Consumer Price Index 2014-2018

+2.5%

+2.0%

+1.5%

+1.0%

2018 Forecast Canada USA BC

+0.5%

+0.0%

2014 Actual

2015 Actual

2016 Actual

2017 Actual

Source: Bank of Montreal Economics

The cost of living in Metro Vancouver remains high with housing affordability being a key concern for many residents. The upcoming provincial budget in February should shed light on what further actions the government plans to take to address housing affordability, both on the ownership and rental fronts. The BC government has delivered on a campaign promise to cut MSP premiums in half and to end tolls on bridges. With increased cost pressure, it remains to be seen if the government will fulfill campaign promises to implement the renters’ rebate and affordable childcare.

the future lives here.

2018-2022 Financial Plan

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