The BC Financial Services Industry’s Importance to a More Competitive Canadian Economy (cont’d)
BC’s financial services help facilitate
and finance the province’s important
export industry. With investments in
its ports, airports, and rail and road
systems, Vancouver has created stateof-the-art infrastructure to move
goods through North America – a key
competitive advantage.
Columbia. The Bank of China has also
recognized the value of doing business
in BC. When it recently announced the
consolidation of its Canadian trade
finance services at its International
Business Centre in Vancouver, it cited
BC’s tax competitiveness as a key factor
in the decision.
The health of BC’s financial services
sector depends on its ability to
maintain its competitiveness. As a
growing part of Vancouver’s economy,
the financial sector contributes an
estimated $32 billion to the province’s
annual Gross Domestic Product (GDP).
The sector also accounts for more than
100,000 directly related jobs in British
Columbia. Indirectly, the financial
services sector creates one new job
in another sector, such as professional
services or administrative services, for
every new job in the industry.
In June 2014, the provincial government
announced the expansion of the IBA
program to allow Schedule III bank
branches of foreign banks to register in
BC, giving these institutions additional
incentives to make Vancouver their
North American location of choice.
The Agricultural Bank of China (ABC)
has selected Vancouver as its Canadian
headquar ters as a result of this
announcement.
From 2009 to 2013, growth in BC’s
financial services sector was stronger
than that in the rest of Canada. Finance,
insurance, real estate, and leasing
employment has increased by 13.6%
in Vancouver, compared with a 3.9%
increase in Toronto and a 6.1% decrease
in Calgary in the same period.
The significant impact of the financial
services industry in BC is supported, to
some extent, by the export of financial
products and services. All five of
Canada’s largest banks have significant
operations in BC, and Vancity, Canada’s
largest credit union, is listed in The
Banker ’s Top 1000 World Banks. In
addition, HSBC, Agricultural Bank of
China, State Bank of India (Canada),
and Mizuho Financial Group have
their Canadian headquarters in British
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In order to compete, financial services
firms need the capability to establish a
presence in markets across the globe.
Access to global markets enhances the
competitiveness of Canadian financial
services as a whole; Vancouver acts as a
key hub for Canadian trade with China
and as a link between US and Asian
markets.
Financial services companies in BC are
developing expertise in commodities
and global transaction bank ing,
leveraging Vancouver’s position as a
global financial player. According to the
Business Council of British Columbia,
BC’s exports to China surged by 18% in
2013. Exports to China are expected to
continue to grow steadily over the next
several years.
Due to BC’s strong trade links with
Asia, which account for 20% of the
province’s merchandise exports, there
I N D U S T R Y U P D AT E
is significant and growing interest
in establishing a Canadian-based
direct trade settlement hub using
the Chinese currency, the renminbi
(RMB). According to a recent MMK
Consulting study commissioned by
AdvantageBC, being able to settle
trade accounts between Canadian
and Chinese companies directly
between the Canadian dollar and the
renminbi – without the US dollar as an
intermediary currency – could create
currency savings and other efficiencies
that can lead to increased bilateral
trade. In addition, a Canadian-based
RMB hub would increase the diversity
of the country’s financial sector and
increase BC’s competitiveness and
recognition as a gateway for global
business.
The currency exchange savings from
eliminating the need to use HT