The Premier's B.C. Natural Resources Forum in Prince George gets started this week with some fiscal momentum behind it.
The Business Development Bank of Canada (BDC) released its latest survey of national business owners asking them to describe their confidence level in the Canadian economy. It feels a lot like spending.
"This is the second year now we interviewed 4,000 businesses across the country and asked them their investment intentions for the coming year," BDC chief economist and vice-president of research Pierre Cleroux told The Citizen. "This year is different. People are more optimistic about this year. The investment intention is also a bit higher. There is more confidence in the economy, in every part of the country."
This is more than just a happy feeling, he said. Business owners don't feel good, in that context, unless there are positive numbers on their bottom line indicating better times ahead. Entrepreneurs are careful with their money, so they aren't prone to emotional optimism, only palpable optimism.
Also, he said, when an entrepreneur in Canada talks about feeling economically bullish, that means they are confident in spending company money on the company wish-list. Just to be sure, though, the BDC researchers asked all 4,000 for details.
"Eighty per cent said they were going to invest," he said.
"We asked them: where are you going to invest? Sixty-one per cent said their investment would be computer related, so software, hardware, e-commerce...
"The number two, 57 per cent, said they would invest in employee training. This is a relatively new phenomenon. Employee training used to be lower on the list, but as it is getting harder to recruit people, because we have an aging population in Canada, we see this happening. It is a great way to retain your employees, a great way to attract new people, and a great way to get a better result for your business with the same people on your staff. They like their job more, they see personal growth by staying with your company, and they do a better job for you.
"Machinery and equipment is No. 3."
He noted that the optimism had its ups and downs, but it was the majority sentiment in each province from coast to coast. B.C. didn't have numbers as high as previous surveys, but Cleroux said that was actually a positive sign in itself. B.C. has been so accustomed to strong annual economies that they don't have to project ahead the way other provinces on the rebound do.
"The B.C. economy is doing well, it has been doing well for the past four years, and the growth is going to be one of the best in the country," Cleroux said. "We can see that some sectors are more optimistic about the future, and that's the case for the technology sector, across the country but especially in British Columbia. Not only is their confidence higher, but their investment intention is much higher than in other sectors. That's also the case for exporters: they have higher confidence and higher investment intentions than the average firm. Tourism has been very strong, the manufacturing sector has been strong, commodity exports have also been strong, supporting the growth in British Columbia."
More positive news found within the survey's information is the source of the investments these business owners intend to make. Very little of it is debt.
"Actually the survey is showing they mostly finance their investments by their own funds," he said. "Fifty-three per cent said the investment would come from working capital. Another 14 per cent is going to come from internal funding. Twelve per cent is line of credit, 11 per cent is loan, 10 per cent is others, so the majority is investing money they already have. Only about 30 per cent are going to borrow money. That's a very reasonable number. And I've noticed, in Canada, consumer debt is very high but business debt ratio is very low."
There is only one unknown factor that is causing caution. Due to the close economic ties to America, there is a prudent vigilance since the election.
"The very good question is with the new U.S. President. That is definitely a source of concern."
Despite that circumspection, said Cleroux, "the business community across Canada has high optimism."
