Chances are many financial planners and others in British Columbia’s financial services sector are wearing smiles these days, with one of Canada’s hottest provincial economies greatly helping their businesses.

Several economic reports released this fall tell the same story — the province’s economic growth will continue for a few years despite a few clouds on the horizon, such as Canada’s strong dollar and the U.S. housing slump.

Calgary-based Canada West Foundation was bullish on the province in its September report on the B.C. economy, authored by economist Brett Gartner.

“It’s been quite a while — almost a generation — since B.C. has enjoyed a comparable period of economic expansion,” Gartner wrote in the report. “In 2006, B.C.’s economy outperformed the national average for the fifth straight year, and employment growth in B.C. outpaces every province except Alberta.”

And here is the part financial advisors will love most. “Not only do more British Columbians have jobs, but gains in real personal disposable income have also been healthy in the past few years,” he added.

Gartner forecasts 3.1% growth for the province in 2007, followed by 3.2% in 2008, and says economic growth will exceed the national average for “the next couple of years.”

Gartner outlines several contributing factors, such as the B.C. Premier Gordon Campbell’s Liberal government’s “much improved” fiscal position; healthy non-residential construction; robust retail, wholesale and service sectors; solid job and income growth; a strong influx of immigrants from abroad, as well as people from other provinces; and, finally, continued strength in China and other Asian economies.

On the heels of the Canada West Foundation report, B.C. Finance Minister Carole Taylor released her government’s first quarterly report for the 2007-08 fiscal year, projecting a $1.6-billion annual budget surplus.

That’s far higher than the modest $400 million the finance minister forecast for 2007-08 in this past February’s budget. Higher tax income and increased federal transfers drove B.C. revenue higher by $1.1 billion.

“B.C.’s economy is proving resilient in the face of significant challenges and risks,” Taylor wrote in her report. “Despite a weak U.S. housing market, a high Canadian dollar and instability in financial markets, we continue to forecast robust economic growth this year and next.”

Her ministry is forecasting 3% growth this year — down slightly from the February budget forecast of 3.1% — but has lowered the forecast slightly to 2.9% for 2008.

Taylor is particularly concerned about the slumping U.S. housing market, for which starts have dropped by a whopping 26% this year and are now at levels not seen since 1991.

Credit Union Central of B.C. chief economist Helmut Pastrick lowered his 2007 forecast for the province, down slightly to 3%, in the updated edition of his five-year forecast. However, he shows a strong rebound to 4% in 2008, 3.8% in 2009 and a spike to 4.5% in 2010 — when Vancouver and Whistler Mountain host the Winter Olympic Games.

Pastrick sees weakening in the trade sector because of the high C$ and the U.S. slowdown in the short term, but calls for lower interest rates in the medium term to offset those negatives.

“Personal and disposable income growth will stay high throughout 2007-11, both before and after inflation adjustments,” he says. “The tight labour market will generate more upward pressure on wages and salaries, with the unemployment rate falling below 4%.”

Finally, despite the economic good news, Taylor spent most of her recent news conference on the first quarterly report talking about the slumping U.S. economy, its lower housing starts and its discount mortgage market instability. She knows that when the elephant next door catches a cold, the B.C. economy can catch pneumonia. IE