Why Growth Matters: Chapter 3 – How the Private Sector and Society Grow in Lockstep

When companies do well, everyone does well, not just the business owners, but also the employees, other businesses, the government, and even the customers. To understand how this works, let’s take a look at how money flows through a company.

When a company sells its goods or services, it receives money. This is called revenue. That revenue is then divided up and used in a few keyways:

1. Salaries – A portion goes to employees in the form of wages.

2. Overhead – Some goes toward the goods and services the company needs to operate –economists call these inputs, and the costs are greatly influenced by suppliers and the overall supply chain.

3. Government fees – A share is paid to the government as taxes and other fees.

4. Profit – Anything left over goes to the business owners as profit.

So, no matter what a company does, it acts like a machine, taking in revenue and distributing it into these four areas. Every dollar ends up as someone's income, cost, tax payment, or return on investment.

Okay, so how does that benefit everyone?

Let’s break it down:

1. Salaries 

Salaries matter because, for most people, employment is their main source of income. When companies grow and succeed, they can hire more people and pay better wages, which directly supports households and communities.

2. Government Fees 

In 2025 the provincial government has projected that over 50% of their revenue will come from personal income tax, corporate income tax, and the provincial sales tax. 

The better companies do, the more people they employ, and the more consumers spend, creating a ripple effect of tax contributions. A strong private sector means more funding for public services like education, emergency response, healthcare, and infrastructure.

In short: healthy businesses help pay for the services we all rely on.

3. Overhead 

Here’s an interesting point: one company’s overhead is another company’s revenue. When a hotel buys linens or food from a local supplier, that supplier earns revenue. And just like before, that money gets broken down into salaries, overhead, government fees, and profit. 

This is known as the multiplier effect: every dollar spent by a business doesn't just stop there, it creates additional economic activity as it moves through the supply chain, creates jobs, boosts incomes, and leads to further consumer spending.

In many sectors, each dollar of business investment can generate multiple dollars of total economic impact.

4. Profit 

Profit is an essential part of the economic engine. It’s the reward for the risk entrepreneurs take by putting in long hours, investing their own money, and often facing uncertainty to build something of value.

But profit isn’t just a payoff; it’s also a launchpad. Many business owners reinvest their profits into expanding their operations, hiring more people, developing new products, or even starting entirely new ventures. This reinvestment creates more economic activity, more jobs, and more opportunities across the economy.

Without the potential to earn a profit, many businesses wouldn’t exist, and we certainly would not have the standard of living we enjoy today. 

So yes, when companies do well, everyone does well.

Thanks for reading—and if you found this helpful, consider sharing it so we can all better understand the engine behind B.C.’s prosperity. Stay tuned for Chapter 4 – How economic growth improves living standards.

Learn more about the Agenda for Economic Growth.