Why Growth Matters: Chapter 1 – Understanding the Economy

The Economy...people talk about it all the time – here at GVBOT we certainly do – but what exactly is it? 
 
The economy is, at its core, the flow of goods, services, and money between people, companies, and governments. In British Columbia, just like anywhere else, this flow is what keeps our communities running—paying for services, creating jobs, and enabling progress.

But why is it important to understand how the economy works? Because when it runs well, everything else runs better too.

Think of it like the engine of a car. The better we understand that engine, the better we can keep it running—and the more efficiently it runs, the further we can go. The same is true for the economy. A well-running economy helps individuals, businesses, and communities become more prosperous.

Governments play a critical role in the economy by setting the legal framework, maintaining competition, funding essential infrastructure, services and social support as well as providing stabilization. While the government’s role is important, one of the critical things to understand about our economy is this: the private sector is the primary engine of wealth creation. 

It’s the private sector that turns ideas, investments, and hard work into the goods, services, and innovations that drive prosperity.

More than 75% of people in B.C. work for private-sector companies, whether it's for large corporations or small businesses. The public sector also requires net revenues from an economic base/the private sector to fund wages and operations.

That’s why the private sector is often called the prosperity engine. It powers our economy and drives the country forward. 

When businesses are thriving, they spend more on wages and benefits and increase investment in technology and equipment that supports workers. Employees with more income spend more on goods and services, which supports other businesses. That increased spending, in turn, generates more revenue for the government through taxes and fees. And with that revenue, the government funds essential services like education, healthcare, emergency response, transportation, and support for seniors.

In short: when the private sector does well, everyone benefits. 
 
But the opposite is also true. When the private sector struggles, like during a recession or when profits decline, businesses tighten their budgets. Employees spend less. Government revenues decline. And ultimately, the services we rely on become harder to maintain.

So, when people ask, “How can we make our province more prosperous?” The answer is surprisingly straightforward: work hard to grow the economy.

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