CA Study Shows Disposable Incomes in BC Increasing
For Immediate Release
October 15, 2002
Interprovincial migration forecast to improve, poverty and post-secondary participation a concern
VANCOUVER - A new study by the Chartered Accountants of British Columbia shows that disposable incomes in BC are finally improving after nearly a decade of stagnation. According to the BC Check-Up, Edition 2002, the average real disposable income in BC improved to $19,266 in 2001, compared to $19,123 in 2000. While the increase was small, the CAs say it's significant because it was the first time in a decade that BC's real disposable income levels surpassed 1992 levels.
"British Columbians lost ground to the rest of the country in terms of incomes over the last decade due to a combination of factors-principal among them was that personal tax rates in BC were not in line with the rest of Canada," says Richard Rees, FCA, CEO of the Chartered Accountants of BC. "Another important factor in BC is the gradual shift from high-paying resource sector jobs to lower-paying service sector jobs. The softwood lumber dispute alone has caused the loss of 20,000 jobs since 2001."
Rees cautions that BC residents still lag behind Alberta and Ontario in disposable incomes. According to the report, by 2001, the average person in BC had $2,000 less disposable income per year than the average Alberta resident and $1,500 less than someone living in Ontario.
The CAs also expressed concern that BC was the only jurisdiction in the study to have a higher percentage of families living in poverty in 1999 than in 1992 (16.1 per cent compared to 15.5 per cent). In addition, BC went from being better than the national average in 1992, to worse than the national average in 1999-a disturbing trend. Ontario had the lowest percentage of families living in poverty of all the jurisdictions examined (13.1 per cent), while Alberta saw the greatest improvement in families moving out of poverty. In 1999, 15.3 per cent of Alberta families lived in poverty, compared to 19.5 per cent in 1992.
The study suggests that poverty statistics may also reflect BC's struggling resource sector in the second half of the 1990s and its impact on resource-dependent communities. For example, consumer bankruptcies in rural areas of BC rose by 83.7 per cent between 1997 and 2001, more than three times higher than in urban areas (23.3 per cent).
"There is no doubt that the province's deteriorating economic fortunes in the last decade took a toll on families," says Rees.
One important factor in improving our prosperity is post-secondary participation. Post-secondary education increases earning potential by 100 per cent, yet only 24.6 per cent of BC's 18-24 year olds are enrolled full-time, this compares with the Canadian average of 34.4 per cent. If BC could increase its participation rate to the Canadian average this would mean that more than 26,800 additional British Columbians would have the opportunity to become high-income earners.
The BC Check-Up report also notes that the 1990s demonstrated that economic opportunity is paramount to attracting people to BC and keeping them here. Providing the opportunity to increase one's earning potential and creating an economic environment that promotes financial success are key to this pursuit.
The living in BC study is the second of three sections of the BC Check-Up. Next week, the CAs will release their assessment of BC as a place to work. The BC Check-Up is available online at: www.bccheckup.com.
The 8,500 CAs in BC provide expert advice to a variety of small and large business; are key members of management teams; or consult to private industry and the public sector. As members of the Institute of Chartered Accountants of British Columbia, they adhere to a strictly enforced code of conduct and ongoing professional development.
For more information, contact:
Michelle McCormick, public affairs manager
Tel: (604) 488-2625