Weak per-capita growth, falling business investment and rising debt echo B.C.’s troubled 1990s
British Columbia is showing troubling signs that the 2020s could mirror the province’s much-maligned economic stagnation of the 1990s, according to new research from the Fraser Institute.
The study examines a wide range of economic indicators and concludes that recent performance has been markedly weaker than in the two decades that followed the 1990s. Growth, investment, exports, employment trends and government finances are all pointing in an unfavourable direction, raising the possibility of another prolonged period of weak prosperity.
Central to the analysis is real per-capita GDP, a common measure of living standards. The report notes that the 1990s earned the label of a “lost decade” because economic output per person barely grew. While the 2020s are only halfway complete, average real per-capita growth to date has been similarly sluggish.
“The 1990s in British Columbia are perceived as a ‘lost decade’ given average annual real per-capita GDP growth averaged barely one-fifth of one percent,” the report states. “The 2020s to date have seen real per-capita growth averaging 0.4 % suggesting another potential lost decade.”
“Many British Columbians may not remember the disastrous lost decade of the 1990s, but those who do will know it isn’t an economic period they’d want to relive,” said Livio Di Matteo, senior fellow at the Fraser Institute and author of the report.
Business investment emerges as one of the clearest warning signs. Investment in machinery and equipment, which supports productivity and long-term growth, has dropped dramatically as a share of the economy, falling from 28.2 per cent of GDP in the late 1990s to just 10.2 per cent in 2023. Export performance has also weakened compared with earlier decades, reducing an important source of external demand.
Labour market trends add to the picture of imbalance. Since 2020, private-sector employment growth has been modest, while public-sector jobs have expanded much more rapidly and self-employment has declined. The report suggests this shift could weigh on productivity and income growth over time.
Public finances are also under strain. Provincial budgets are projected to remain in deficit through at least 2027/28, with net debt forecast to climb from roughly $71 billion to almost $156 billion. Over the same period, the net debt-to-GDP ratio is expected to nearly double, signalling reduced fiscal flexibility.
Di Matteo cautions that the decade is not yet doomed but argues that current trends are worrying. “With five years to go, the decade is not yet a lost one for British Columbians, but the recent trends are not encouraging,” he said.
