B.C.’s economic growth to lead Canada once again

According to a new report, released Thursday, the province of British Columbia is on pace to lead the country in economic growth again this year.

BMO’s Blue Book assessed the provinces, and found that if real estate and spending trends remain the same, this year will be part of B.C.’s strongest three-year performance since 2007.

This year, the province's GDP is once again expected to rise 3 per cent, more than twice the national average.

Housing prices have dominated market conversations in B.C. this year, resulting in the introduction of a 15 per cent foreign buyer tax to try to stabilize the more than 30 per cent spike in housing prices compared to last year.

The province still holds the lowest unemployment rate in the country, which suggests the labour market can support a higher cost of living more than elsewhere.

"The measures the B.C. government put in place are working to soften sales, particularly at the high end of the market,” said BMO senior economist Robert Kavic. “On the supply side, housing starts have broken out of the stable range led by a record number of multi-units.

"Some budding signs of speculation recently, plus this coming wave of condo supply, could be a risk to watch in the year or two ahead."

Other things that will likely help B.C.’s economy is 2017 are lower fuel costs (to help the agriculture sector) and a boost in tourism from the U.S. because of the low dollar.

“The B.C. economy continues to outpace provincial peers and foster optimism among our local commercial customers, that they will see a good return in the investments they've made to grow their businesses,” said senior VP at BMO, Mike Bonne.

One point that might bring the local economy down, is B.C.'s reliance on exports to Asia as the Chinese market slows.