About the B.C. Input-Output Model

The British Columbia Input-Output model (BCIOM) can be viewed as a snapshot of the B.C. economy.

It is derived from Interprovincial Supply-Use tables developed by Statistics Canada, and includes details on 492 commodities, 240 industry groups and 293 “final demand” categories. It also includes a set of computer algorithms to do the calculations required for the model’s solution.

The B.C. Input-Output Model can be used to predict how an increase or decrease in demand for the products of one industry will  impact other industries, and therefore  the entire economy. The current model reflects the structure of the economy in 2017.

Types of Impacts Calculated

Three different types of impacts are calculated in an input-output analysis:

Direct impact

The direct impact measures the impact on B.C. industries supplying goods and services directly used by the project. For example, direct impacts for a typical construction project would include impacts in industries supplying cement, lumber, or engineering.

Indirect impact

The indirect (supplier industry) impact measures the impact on B.C. industries that are further back in the supply chain. The indirect impact is cumulative, and includes transactions going all the way back to the beginning of the supply chain. Indirect impacts for a typical construction project would include impacts in industries supplying a wide range of goods and services, such as janitorial services, accounting, transportation, logging, and mining.

Induced impact

The induced impact measures the effect that spending by workers (those employed by the project, or by direct and indirect supplier industries) has on the economy. Induced impacts for a typical construction project would include impacts in industries that sell goods and services to consumers, such as retailers, food services, accommodations, etc.

Estimates of Tax Revenues

The model also generates estimates of tax revenues associated with a change in demand for one or more commodities, or a change in the output of an industry. These tax revenue estimates include personal and corporate income taxes, as well as taxes on commodities. There are 19 different tax types which potentially are paid on each of the 492 commodities.

Although the structure of the model is based on 2017 data, tax revenue and employment estimates generated by the model are based on more up-to-date information.

Tax revenue estimates reflect the current tax structure and existing tax rates. Employment estimates generated by the model are calculated using information on average earnings in 2020.