British Columbia’s economy is performing well and investor confidence is high, according to the 2007 BC Check-Up, Provincial Edition, a report released by the Chartered Accountants of British Columbia.

The CA report, which compared B.C. to Alberta, Ontario and the national average on a series of economic indicators, found that B.C. was making great strides in areas such as productivity, employment in high technology, and research and development.

Part of the reason for this surge in investment is the appreciation of the Canadian dollar.

“The upside to the strong Canadian dollar is it’s more affordable for companies to invest in machinery and equipment again,” said Amed Naqvi, FCA, partner with Berg Naqvi Lehmann in Nelson. ”These investments in infrastructure will lead to long-term growth and much needed productivity gains, which are vital to B.C.’s economy.”

According to the BC Check-Up report, B.C.’s GDP share of machinery and equipment investment rose from 6.6 per cent in 2001 to 8.1 per cent in 2006, a significant gain of 22 per cent over five years. This surge of new spending in machinery and equipment represents businesses’ efforts to remain competitive and adapt to new technologies.

The 2007 BC Check-Up report highlights the province’s fiscal and economic strengths:

· B.C.’s total capital investment rose to $22.6 billion in 2006, up from $15.6 billion in 2000.

· B.C. is closing the technology gap—employment in the sciences was 6.9 per cent, on par with the national average. R&D spending is also up, and B.C.’s growth in this indicator led comparison jurisdictions over both one- and four-year periods, with impressive increases of 3.6 and 9 per cent.

· For the second year in a row, business incorporations in B.C. have risen dramatically, reaching 7.7 incorporations per 1,000 population in 2006, second only to Alberta (13.4 per 1,000 population).

The report also highlights areas where the province can improve:

· B.C.’s after-tax corporate profits to GDP ratio rose 3.6 per cent to 10.3 per cent, but still lagged the national average (11.3 per cent), and was well behind that of Alberta (19.5 per cent).

· B.C.’s R&D spending-to-GDP ratio (1.24 per cent) is rising, but is below the national average and Ontario (1.68 and 2.05 per cent respectively). And while employment in the sciences increased to 6.9 per cent, B.C. is still playing catch-up to both Ontario and Alberta (7.2 and 7.5 per cent).

“The province is moving in the right direction and B.C.’s one-year growth statistics led the comparison jurisdictions in all five of our investment indicators,” said Naqvi. “The important thing now is to keep our eye on the ball and not be complacent because of these gains. Continued investment in knowledge-based industries, infrastructure, and value-added production will help cushion B.C. from external risks, such as the U.S. economic slowdown and the volatility of commodities prices.”

Economic indicators selected for the BC Check-Up INVEST study included: ratio of R&D spending to GDP, employment in the sciences, non-residential construction cost index, after-tax corporate profits-to-GDP ratio, and net provincial financial liabilities as a percentage of GDP.

The investment study released is the first of three sections of the BC Check-Up to be released over the coming weeks. On October 5, 2007, the CAs will release their assessment of B.C. as a place to WORK, and on October 12, 2007, B.C. as a place to LIVE. The report is available online at www.bccheckup.com.