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Greater Vancouver Economic Scorecard Report Overview
Dr. Daniel F. Muzyka
President and Chief Executive Officer
The Conference Board of Canada
2
A regional scorecard:
• Provides an evidence-based foundation for performance evaluation
• Identifies areas for performance improvement
• Defines areas for further growth
• Helps set the agenda
• Helps track progress
Why a Regional Scorecard?
3
• Major trends: globalization, rise of Asia, knowledge economy, aging population.
• Greater Vancouver, like all major cities, is in a global competition for talent and
investment.
• Scorecard’s purpose is to assess Greater Vancouver’s relative strengths and
weaknesses in socio-economic performance.
• Also provides evidence-based research for GVBOT’s policy analysis.
Purpose of Greater Vancouver Scorecard
4
• Global economic context
• National economic context
• Impact on Greater Vancouver
• Greater Vancouver defined and compared
• Scorecard results
• Greater Vancouver’s traded clusters
• The region’s risks and challenges
Agenda
5
World Real GDP Growth per cent change
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
1991 93 95 97 99 01 03 05 07 09 11 13 15 17f
Source: Consensus Economics.
6
Tepid Global Growth an Impediment to
Improving Exports per cent change
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
United States
China United Kingdom
Euro zone Japan Latin America
Hong Kong Total Trade Weighted
GDP
2015
2016
2017
Source: Consensus Economics.
7
• The 11 TPP countries account for almost 2/3 of B.C.’s trade.
• Japan is still the number three economy, even if growth is stalled.
• Free trade agreement with India is in the works.
– Emerging markets have slipped:
• China will struggle to grow by 7 per cent next two years.
• Brazil and Russia in recession.
• But Indian performance has recently improved.
Gateway to Asia
8
China: Real GDP Growth and Inflation per cent change
Source: Consensus Economics.
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
03 04 05 06 07 08 09 10 11 12 13 14 15 16f 17f
Real GDP Growth Inflation
9
China’s Global Influence per cent share of global consumption (2014)
Source: World Bank.
0
5
10
15
20
25
30
35
40
45
50
55
60
iron ore aluminum nickel steel copper zinc soybeans oil
10
Auto Sales in China millions, passenger vehicles
Source: Statistica 2016.
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
2008 2009 2010 2011 2012 2013 2014 2015
But the country is shifting to the
consumption of products and services.
11
India: Real GDP Growth and Inflation per cent change
Source: Consensus Economics.
0.0
2.0
4.0
6.0
8.0
10.0
12.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
03 04 05 06 07 08 09 10 11 12 13 14 15f 16f
Real GDP Growth Inflation
12
• Global economic context
• National economic context
• Impact on Greater Vancouver
• Greater Vancouver defined and compared
• Scorecard results
• Greater Vancouver’s traded clusters
• The region’s risks and challenges
Agenda
13
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
03 04 05 06 07 08 09 10 11 12 13 14 15 16f 17f 18f
Canada’s Real GDP Growth per cent change
Sources: Statistics Canada; The Conference Board of Canada.
14
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
NL PEI NS NB Que Ont Man Sask Alta BC
2004-14
The Resource Decade—Real GDP by Province average annual compound growth, per cent
Sources: Statistics Canada; The Conference Board of Canada.
15
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
NL PEI NS NB Que Ont Man Sask Alta BC
2015-18
The Resource Crash—Real GDP by Province average annual compound growth, per cent
Sources: Statistics Canada; The Conference Board of Canada.
16
• To replenish the workforce,
Canada needs to add more
highly skilled workers and replace
retirees:
– Invest in education—
increase the skills and
participation of the
workforce.
– Raise levels of immigration
and speed up integration.
Canada’s Aging Demography and the
Knowledge Economy
17
0.60
0.70
0.80
0.90
1.00
1.10
1.20
1.30
1.40
Canada’s Retirement Rate per cent share of the labour force (1976-2018)
Sources: The Conference Board of Canada; Statistics Canada.
18
Canada’s Employment Gains level change in 000’s (2004-14)
Sources: The Conference Board of Canada; Statistics Canada.
77
-559
368
892
1,165
-600
-400
-200
0
200
400
600
800
1,000
1,200
Resources, Utilities and Agriculture
Manufacturing Construction Health, Education, Public Admin
Business Services
19
• Global economic context
• National economic context
• Impact on Greater Vancouver
• Greater Vancouver defined and compared
• Scorecard results
• Greater Vancouver’s traded clusters
• The region’s risks and challenges
Agenda
20
• Greater Vancouver’s economy has been strong and the outlook is bright.
• Why the optimism?
– Expect more agglomeration:
• Knowledge workers cluster.
• Immigrants tend to settle in large cities.
– Given globalization/Asia-Pacific growth/TPP—―Gateway‖ dynamics will
increase.
Impact on Greater Vancouver
21
Real GDP Growth by CMA: 2006-15 average annual per cent change
Source: The Conference Board of Canada.
0.9 1.2
1.4 1.6 1.6
1.9 2.0
2.1 2.5
2.8 3.8 3.9 3.9
Hamilton
Victoria
Montréal
Ottawa-Gatineau
Halifax
Toronto
Québec
Winnipeg
Vancouver
Calgary
Regina
Edmonton
Saskatoon
Canada: 1.6%
22
Where the Jobs are Being Created in Canada level change in 000’s (April 2016 over April 2015)
Sources: Statistics Canada; The Conference Board of Canada.
-41.0
90.8
94.2
Rest of Canada
Toronto
Vancouver
23
Contribution to Growth over 2006-15 Vancouver (percentage added to total real GDP growth)
Source: The Conference Board of Canada.
0.0
0.0
0.1
0.1
0.1
0.1
0.2
0.2
0.2
0.3
1.1
Manufacturing
Information & Culture
Resources, Utilities & Agriculture
Personal Services
Public Administration
Transportation & Warehousing
Health & Education
Business Services
Construction
Wholesale & Retail Trade
Finance, Insurance & Real Estate
Vancouver’s economy expanded
by 2.5 per cent per year between
2006 and 2015.
24
• Vancouver is expected to lead all major CMAs in economic growth between
2016 and 2020.
• Vancouver’s status as the Gateway to Asia and the continued rise of the
Asia-Pacific region bodes well for local trade and transportation outlook.
• Local trade outlook will also be buoyed by healthy U.S. economy.
• Post-secondary institutions and local labour talent means many ingredients are
in place to take advantage of rising services trade and other knowledge-based
growth.
Vancouver to be Canada’s Growth Leader
25
• Global economic context
• National economic context
• Impact on Greater Vancouver
• Greater Vancouver defined and compared
• Scorecard results
• Greater Vancouver’s traded clusters
• The region’s risks and challenges
Agenda
26
Greater Vancouver Map
27
• Each of the selected metro areas meet one or more of the following criteria:
– A transportation hub.
– One of Greater Vancouver’s Canadian competitors.
– One of Greater Vancouver’s Pacific Northwest competitors.
– Comparatively sized to Greater Vancouver.
– Located in a rapidly emerging economy.
– A popular tourist destination.
Criteria for Selecting Comparator Regions
28
Benchmarking: Metro Regions
Barcelona Portland
Calgary Rotterdam
Copenhagen San Francisco
Halifax Seattle
Hong Kong Seoul
Houston Shanghai
Los Angeles Singapore
Manchester Sydney
Miami Toronto
Montreal Greater Vancouver
29
• Global economic context
• National economic context
• Impact on Greater Vancouver
• Greater Vancouver defined and compared
• Scorecard results
• Greater Vancouver’s traded clusters
• The region’s risks and challenges
Agenda
30
• This study uses a report card-style ranking of A–B–C–D (indicators are divided
into quartiles) to assess performance.
• Backward looking—all indicators end in 2014 or earlier.
• The report features 32 indicators divided into two categories:
Economy (21) and Social (11).
• Economy category also includes indicators that measure transportation
(ports, airports, rail and trucking) performance.
• The overall ranking is an average of the Economy and Social category scores.
• For more information: http://www.conferenceboard.ca/hcp/methodology.aspx
Benchmarking: Ranking Method
31
• The overall results of the Scorecard offers mixed news for Greater Vancouver—
it finishes 9th out of 20.
• Greater Vancouver does slightly better in the Social category than in the
Economy category.
• Within the Economy category, Greater Vancouver ranks highly among the
transportation-oriented indicators.
• Region still faces significant challenges that threaten its economic vitality.
Vancouver Scorecard: Key Findings
32
Greater Vancouver’s Economic Performance
Indicator Grade Ranking
KPMG’s total tax index A 3 (12)
Office rents (US$ per square foot) A 5 (17)
Port cargo tonnage per $1 million of GDP B 3 (19)
Labour productivity growth B 7 (20)
Employment growth B 11 (20)
Venture capital investment per $1 million of GDP C 4 (11)
Port container traffic (TEUs) per $1 million of GDP C 5 (19)
Real GDP per capita growth C 7 (20)
Number of cruise vessel calls C 7 (18)
After-tax income growth C 8 (19)
Number of participants at international associations meetings C 8 (19)
33
Greater Vancouver’s Economic Performance continued
Indicator Grade Ranking
Inbound airport cargo tonnage per $1 million of GDP C 9 (20)
High-tech employment share C 9 (19)
Unemployment rate C 10 (20)
Inbound airport seats per capita C 10 (20)
Marginal effective tax rate on capital investment C 10 (17)
International visitors C 11 (20)
Labour productivity C 12 (20)
After-tax income per capita C 13 (20)
Real GDP per capita C 14 (20)
Market size D 16 (20)
34
Economy Report Card
“A” Metros “B” Metros “C” Metros “D” Metros
1. Singapore 5. Seattle 10. Seoul 18. Los Angeles
2. Hong Kong 6. Copenhagen 11. Sydney 19. Manchester
3. Shanghai 7. Houston* 12. Rotterdam 20. Miami
4. Calgary* 8. San Francisco 13. Toronto
9. Vancouver 14. Halifax
15. Barcelona
16. Montreal
17. Portland
* Results for Calgary and Houston do not take into account the decline in oil and gas prices.
35
Greater Vancouver’s Social Performance
Indicator Grade Ranking
Air quality A 1 (20)
Proportion of population foreign born A 2 (19)
Homicide rate A 9 (20)
Proportion of population that is employed in cultural occupations B 10 (20)
Climate B 12 (20)
Proportion of the population with at least a bachelor’s degree C 9 (20)
Non-car commuting C 8 (17)
Average travel time to and from work C 10 (19)
Income inequality C 11 (20)
Proportion of population aged 25-34 D 7 (19)
Housing affordability D 15 (17)
36
Social Report Card
“A” Metros “B” Metros “C” Metros “D” Metros
1. Barcelona 7. Vancouver 18. Miami 20. Shanghai
2. Copenhagen 8. Manchester 19. Houston
3. Sydney 9. Montreal
4. Portland 10. San Francisco
5. Toronto 11. Calgary
6. Seattle 12. Hong Kong
13. Rotterdam
14. Seoul
15. Halifax
16. Singapore
17. Los Angeles
37
Overall Ranking
1. Singapore 11. Portland
2. Copenhagen 12. Seoul
3. Hong Kong 13. Rotterdam
4. Calgary 14. Montreal
5. Seattle 15. Houston
6. Barcelona 16. Halifax
7. Sydney 17. Manchester
8. San Francisco 18. Shanghai
9. Greater Vancouver 19. Los Angeles
10. Toronto 20. Miami
38
• Global economic context
• National economic context
• Impact on Greater Vancouver
• Greater Vancouver defined and compared
• Scorecard results
• Greater Vancouver’s traded clusters
• The region’s risks and challenges
Agenda
39
• Clusters are groups of firms and institutions that are located near one another
and draw productive advantage from their mutual proximity and connections.
• Traded clusters serve markets beyond the region in which they are located.
• They are key drivers of economic growth.
• Famous clusters include ―The City‖, Silicon Valley, and Hollywood.
• We used an empirical approach to identify Greater Vancouver’s traded clusters.
Cluster Analysis
40
1. Transportation (airport, port, rail and trucking)
2. Tourism
3. Information and cultural industries
4. High-tech
5. Finance and insurance
Greater Vancouver’s Traded Clusters
41
• In 2012, the Gateway Transportation
System directly supported
approximately 82,000 jobs and
over $7.2 Billion in GDP.
• Nearly 3/4 of the value of Western
Canadian trade that moves by sea
goes via the Gateway. Nearly half of
the value that moves by air goes via
YVR.
Greater Vancouver is a Transportation
Gateway
Source: Economic Development Research Group. Economic Impact of the Greater Vancouver Gateway, Sept. 2014.
42
• More than 9 million overnight visitors
came to Greater Vancouver last year.
• More than 805,000 cruise passengers
landed in Vancouver in 2015,
1/3 of all Canadian cruise port traffic.
• Proximity to Whistler adds to the
region’s appeal.
Greater Vancouver is a Major Tourist
Destination
Photo by Jon Eben Field.
43
Information and Culture is Another Key
Industry
Photo by Nigel Horsley.
• The information and cultural industry
generated $5 billion in GDP last year and
employed 39,400 people.
• Vancouver is the third largest Film & TV
production centre in North America.
44
Greater Vancouver is a “New Tech Hub”
• 64,300 people worked in the
information and communication
technology industry in 2015.
• The industry encompasses major
global players, such as Amazon
and Microsoft, as well as
homegrown firms like Hootsuite
and TELUS.
45
• Greater Vancouver’s finance
sector has been quickly rising in
prominence internationally—it
has moved up in the rankings of
the Global Financial Centres
Index from 27th place in 2007 to
14th place in 2014.
• The finance and insurance sector
generated nearly $34 billion in
GDP and employed 59,300
people in 2015.
Greater Vancouver is a Growing Financial
Services Centre
46
• Economic context
• National economic context
• Impact on Greater Vancouver
• Greater Vancouver defined and compared
• Scorecard results
• Greater Vancouver’s traded clusters
• Risks and challenges
Agenda
47
• Investment deficit in roads and public transit.
• Rapidly deteriorating housing affordability.
• Barriers to further port expansion.
• Relatively low productivity levels.
• Relatively low educational attainment rates.
• High marginal effective tax rate (METR) on capital.
• Trouble attracting head offices.
Greater Vancouver’s Outlook Not Without
Risks
48
100.8 73.0
66.0 65.6
62.2 59.4
58.3 58.3
57.1 56.8
56.0 55.4
54.0 53.4
51.5 50.0
47.4 38.0
22.0
Shanghai
Seoul
Sydney
Toronto
San Francisco
Montreal
Los Angeles
Houston
Seattle
Vancouver
Manchester
Miami
Calgary
Barcelona
Portland
Singapore
Halifax
Copenhagen
Hong Kong
Average Commute Times average travel time to and from work (minutes)
Source: Statistics Canada; and other international sources.
49
17.0
12.8 10.6 9.8 9.2
8.0 7.7 6.5 5.6 5.2
Vancouver’s Housing Among Least Affordable median house price divided by median household income
Source: Demographia.
50
• The importance of the transportation sector to Greater Vancouver economic
vitality is a recurring theme throughout our report.
• The Port of Vancouver has continually been upgraded and expanded to
manage growing Canadian trade with Asia.
• But further investments could be hindered by land scarcity and local opposition.
• Indeed, the supply of vacant land suitable for trade and goods movement could
be exhausted within 10 years, based on the inventory of trade-enabling
industrial land.
Land Scarcity Another Serious Challenge
51
43 55
64 64 65
69 69
73 74 75
77 81
86 96
105 113
116 119 119
122
Shanghai
Manchester
Seoul
Montreal
Halifax
Barcelona
Singapore
Copenhagen
Vancouver
Miami
Toronto
Rotterdam
Hong Kong
Los Angeles
Portland
Seattle
Calgary
San Francisco
Sydney
Houston
Labour Productivity GDP per worker (000’s 2007$)
Sources: The Conference Board of Canada; Statistics Canada.
52
23 23
24 26
27 27 27
29 30 30
31 31
32 33
33 35
37 39 40
45
Shanghai
Singapore
Sydney
Seoul
Montreal
Hong Kong
Rotterdam
Miami
Halifax
Manchester
Houston
Vancouver
Los Angeles
Calgary
Toronto
Portland
Barcelona
Seattle
Copenhagen
San Francisco
Educational Attainment per cent of the population, aged 25 and over, with at least a bachelor’s degree
Source: Statistics Canada.
53
35.3
30.1
27.5
26.0
25.9
23.7
18.6
18.2
17.1
17.0
15.9
13.4
U.S. Average
Seoul
Vancouver
Barcelona
Sydney
Manchester
Copenhagen
Toronto
Rotterdam
Calgary
Montreal
Halifax
The METR measures the tax impact on
capital investment as a portion of the
cost of capital.
Taxes on Capital Marginal effective tax rate on capital
Source: Chen and Mintz.
54
6.0
10.2
12.2
22.7
Vancouver
Montreal
Toronto
Calgary
Head Office Employment Head office employment per 1,000 population (2013)
Source: Statistics Canada.
55
• Many of these challenges are complex and
regional in scope.
• Local government fragmentation reduces the
likelihood that these challenges will be
successfully met.
• The region’s municipalities need to come
together.
Challenges Call for Regional Approach
Greater Vancouver Economic Scorecard The Path Ahead
Iain J.S. Black
President and Chief Executive Officer
Greater Vancouver Board of Trade
2
GVBOT’s initial response to Scorecard 2016
1. Key messages & takeaways
2. Priority policy areas on which we will focus
3. … and some specific ways we can apply our resources
The Path Ahead: “Let’s Get to Work”
3
GVBOT’s initial response to Scorecard 2016
1. Key messages & takeaways
2. Priority policy areas on which we will focus
3. … and some specific ways we can apply our resources
The Path Ahead: “Let’s Get to Work”
4
What did we learn from this process?
1. The empirical evidence is in: this is no longer the stuff of cocktail chatter.
2. While pleased with BC’s national leadership in economic growth, embracing
the longer term opportunities & challenges requires thoughtful and
coordinated action.
3. The Pacific Gateway (Greater Vancouver’s network of roads, rail, port, and
airport) is a strategic asset for Canada’s economy… not just BC’s.
4. There is obvious linkage between our region’s challenges.
Key Messages & Takeaways
5
GVBOT’s initial response to Scorecard 2016
1. Key messages & takeaways
2. Priority policy areas on which we will focus
3. … and some specific ways we can apply our resources
The Path Ahead: “Let’s Get to Work”
6
The resulting four key policy focus areas where the GVBOT will focus
1. Gateway Resources
2. Housing Affordability & Public Transit
3. Human Capital
4. Regional Coordination
The Path Ahead: Our Policy Priorities
7
GVBOT’s initial response to Scorecard 2016
1. Key messages & takeaways
2. Priority policy areas on which we will focus
3. … and some specific ways we can apply our resources
The Path Ahead: “Let’s Get to Work”
8
Initial thoughts as to some things we can do as GVBOT
1. Re-engage re: transit projects.
2. Focus on municipal-imposed housing costs; regulatory certainty; density/diversity.
3. Identify municipal-controlled opportunities for regulatory streamlining &
harmonization.
4. Further engage our CYP re: their needs for housing, cultural amenities, industry
diversification, transit, and entrepreneurship.
5. Reactivate The World Trade Centre.
6. Focus our policy committees on the GVBOT priorities falling out to the Scorecard.
The Path Ahead: Some specific ideas
conferenceboard.ca boardoftrade.com
conferenceboard.ca boardoftrade.com