Massive layoffs not likely in B.C., says finance minister

B.C. Finance Minister Colin Hansen says the 2010 Winter Olympics should provide a significant and well-timed boost to the provincial economy. (CBC)

Significant job losses are not expected to happen in British Columbia any time soon, the province's finance minister said Friday.

"We are not in British Columbia anticipating that we are going to see significant layoffs. We still have an unemployment rate that is at one of the lowest we've seen in many, many decades," Colin Hansen said.

Hansen said he is pleased with the provincial job numbers released Friday, which show a slight drop in the unemployment rate in November, down 0.2 per cent from the month before.

"It's fair to say British Columbia, relative to the rest of North America, is actually faring quite well," he said.

Hansen said he is not concerned about lowered growth projections for the province by the B.C. Economic Forecast Council Friday.

The council projects B.C.'s real gross domestic product at 1.3 per cent this year, down from the previous forecast of 1.4 per cent. For 2009, the forecast economic growth is expected to average 0.6 per cent, down from 1.3 per cent.

Hansen said council members based their outlooks on recent global development, but "B.C. remains in a strong position to weather the current economic downturn."

"The 2010 Winter Olympics are expected to provide a significant and well-timed boost to the provincial economy," he said.

2010 Games to generate only 'temporary' boost

B.C. Economic Forecast Council member Helmut Pastrick, who works for Central 1 Credit Union, said the dollars that Olympic visitors will spend in the province won't be part of an economic revival.

"That's a nice boost to the economy, but it is temporary," Pastrick said.

In his quarterly financial report last week, Hansen reduced the projected budget surplus this year to $450 million from $1 billion, not including a built-in $500-million forecast allowance.

Pastrick said given next year's global economic outlook, the province may find itself using up that half a billion dollar buffer.

"I think much of that will be needed," he said. "I don't think we'll see a deficit for the current fiscal year."

The once dominant B.C. forest industry is likely to emerge much smaller from this downturn, Pastrick said.

Dozens of mills have been closed in the last year and thousands of workers laid off with the collapse of the U.S. home-building market.

"I think a significant pickup in U.S. housing is probably not until 2011-12, so much of this downsizing and consolidation in the forest products side in B.C. is likely permanent," Pastrick said.

With files from the Canadian Press