With a mission to inform, empower, celebrate and advocate for British Columbia's current and aspiring business leaders, BCBusiness go behind the headlines and bring readers face to face with the key issues and people driving business in B.C.
Issue link: http://digital.canadawide.com/i/1071224
30 BCBUSINESS FEBRUARY 2019 It's the kind of rhetoric you'd expect from an Opposition party that pitches itself as a cham- pion of free enterprise, but the BC Liberals aren't the only ones worried about the state of business in the province. At the 28th-floor Vancouver offices of consult- ing firm McKinsey & Co., just a few blocks from the hotel, senior partner Miklós Dietz sounds troubled, too. Despite its many advantages, Vancouver suffers from a dire shortage of major corporate headquarters, Dietz explains. "We have a GDP maybe the size of a medium- sized European country, yet we have almost no large companies." As a result, Dietz notes, Vancouver lacks its share of the high-paying jobs, indirect employment and other benefits that such businesses bring. Combined with high housing prices, that leaves the city vulnerable to what he calls a negative spiral. Van- couver is remarkably innovative, but it isn't capitaliz- ing on its strengths, Dietz charges. "It almost hurts to think about the opportunity we are missing," he says. "Especially with current geopolitics and global trends of talent moving all over the world, we should be the big- gest winner." These complaints and others contradict the popu- lar narrative that B.C. is an unstoppable force. At first glance, things couldn't be better: we're a highly diversified economy with unemployment far below the national average, a thriving technology sector, a skilled and well-educated workforce, enviable quality of life and a prime location between the U.S. and Asia. Oh, and B.C. recently announced the largest infrastructure project in Canadian history, LNG Canada's $40-billion liquefied natural gas facility in Kitimat. But our success belies some real weaknesses. Besides a shortage of large head offices, relatively low incomes and a provincial tax regime that arguably makes life more difficult for businesses of all sizes, B.C. has a yawn- ing productivity gap with other jurisdictions. Depend- ing on who you ask, the province also lags in attracting foreign direct investment. And outside Metro Vancouver, some businesses feel that their communities aren't shar- ing in B.C.'s prosperity—so they're taking matters into their own hands. For Greg D'Avignon, president and CEO of the Business Council of British Columbia, it's the best and the worst of times. "I'm really bullish on B.C. and Canada," D'Avignon says. "We've got a huge opportunity." Over the past three years, B.C. has tied Washington State for the highest gross domestic product growth in North America, D'Avignon relates. "But that performance is, frankly, inflated, and is increasingly being eroded by some real concerning fundamental competitiveness issues," he maintains. Since 2013, for example, the cost of running a com- pany in B.C. has risen and regulations have grown more complex, D'Avignon says. "We've seen a $5.1-billion increase in the taxes alone on businesses operating in this province." B.C. has much to recommend it as a business location, says Scott Thomson, president and CEO of Vancouver- based Finning International. Vancouver is an attrac- tive place for families to live, it's close to employees "It almost hurts to think about the opportunity we are missing. Especially with current geopolitics and global trends of talent moving all over the world, we should be the biggest winner" – Miklós Dietz, senior partner, McKinsey & Co.