Here’s some background from the release:

Between February 2008 and February 2009, the increase in the number of beneficiaries in British Columbia was widespread. At the same time, the decrease in employment affected a large number of sectors, including manufacturing; construction; transportation and warehousing; retail trade; and forestry and logging.

In British Columbia, the number of beneficiaries almost tripled in Williams Lake, and it doubled further north in Quesnel. The number also roughly doubled in Kelowna, Cranbrook, Chilliwack, Powell River and Penticton. In Victoria the number of beneficiaries increased 88.8%, while in Vancouver, the 12,300 additional beneficiaries represented an increase of 75.3% in one year.

There is a lag in the EI numbers, since the most recent data are for January. But we already know that in February, unemployment rates rose again, so the growth in the number of EI recipients is even greater.

The main point is that both EI and social assistance, the two key “automatic stabilizers” have been greatly weakened since the mid-1990s. Back in 1990-91, EI benefits were about $600 per week in today’s dollars; the current maximum EI benefit is $447. Inflation has also eroded the real value of social assistance benefits, which are already much smaller than what one could access on EI.

Even more troubling is that only 42% of BC’s unemployed workers qualified for EI benefits in December, and this percentage is even lower in Vancouver (33%) and Victoria (31%). This will put more pressure on provincial social assistance rolls, which were up 37% at last count. Social assistance also suffers from tremendous barriers for those in need to access the program.

Removing these barriers and increasing benefit levels would be a wise means of stimulating the economy, as almost all of that money would get spent, thereby supporting demand just at the time we need it.

This publication basically asks where the income in various BC communities comes from. In many communities the resource sector is the number one employer, and this usually means forestry, though in a few it means extraction of minerals or oil and gas. No surprise there.

But what is really interesting is how much the public sector is a player (and here we are talking only about federal and provincial jobs as money that comes from outside the community). In almost every community the public sector employs a major share of the local population, typically accounting for between 20 and 30% of local income (with a low of 14% in Fort St John and a high of 50% in the central coast of Vancouver Island). This includes civil servants in federal and provincial ministries, but also teachers, doctors, nurses, social workers and so on. All totaled, the public sector is the number one source of income in many communities in BC, and in the major resource communities it is a close number two.

In addition to employment in the public sector, another major source of income for all BC communities is income transfer payments (federally this includes the GST credit, the Canada Child Tax Benefit, Old Age Security, Canada Pension Plan and Employment Insurance; provincially, Income Assistance). These range from 5 to 26% of income in BC communities, with an average in the high teens.

If you add both public sector jobs and income transfers together, the broader public sector is the number one source of income in all but three of the 63 communities listed in Table 2.1 (pages 8-9). Which is why the budget cuts delivered by the Liberals in their first mandate (between 2002 and 2004) hurt so much. True, all of those communities also pay taxes that flow out of the local economy, but as we pointed out in a CCPA study a few years ago, this dynamic was a net loss for the vast majority of BC communities outside Vancouver and Victoria because the “hinterland” gets back more public sector income than they pay in taxes.

The impact of those cuts has been masked by a boom in resource extraction and exports due to high commodity prices and due to accelerated cuts in response to the mountain pine beetle. It will be interesting to see an update of the economic dependency numbers after the next census, as this BC snapshot was taken at the top of a commodities boom that has now gone bust.

The lesson is that the public sector provides a major bulwark against bad economic times. Without all of those public sector jobs and transfer payments, the closure of a mill would lead many a community to turn into a ghost town. Some are now arguing that in the current economic crisis, the public sector needs to tighten its belt by downsizing operations, and jobs. But that would only worsen the pain, and lead to a longer and deeper slump. If anything we need more public sector income to be a stronger counterweight that sustains BC communities.

Forest sector workers are looking for a little support for them and some solid new thinking for our industry. We had hoped that the recently completed Round Table consultation process would bring some innovative and successful ideas to the table, but alas, it was not to be. In this budget the government could commit to a few things that would indicate some commitment to workers and to the industry. Here’s a few ideas:

As the Premier himself has recently said, it’s about jobs. Indeed.