BC Business
B.C.’s economic indicators continue to hold up surprisingly well, and the government aims to keep it that way.
In the midst of a soft patch in the economic cycle, British Columbia continues to boast one of the lowest unemployment rates in the country and strong job growth. The province is expected to have a million job openings over the next decade, more than a third of them newly created positions. As of May 2024, B.C. showed a year-over-year hiring growth of 2.8 percent, above the national rate of 2.0 percent. Employment growth is coming in at 1.8 per cent on average, lifted in part by increased capacity from population growth.
With new heavy oil and liquefied natural gas export infrastructure and a major hydroelectric dam nearing completion, as well as new green hydrogen production and biodiesel refineries in the works, and carbon capture companies reaching $1 billion valuations, B.C. is increasingly viewed as an energy and clean-tech powerhouse.
According to BC Check-Up: Invest, an annual report by the Chartered Professional Accountants of British Columbia (CPABC), construction began on 47,894 housing units in 2023, marking a record high. The group predicts the economy will accelerate in 2025 and 2026 as exports increase and consumer demand improves due to lower interest rates and strong population growth.
More broadly, investment and business expansion are expected to rebound. The CPABC outlook sees real economic growth of 1.1 per cent this year before increasing to 2.8 per cent in 2025 and over three per cent in 2026.
While goods make up the bulk of trade activity, tourism services have remained firm, aided by a low Canadian dollar and still robust global tourism following the pandemic.
The provincial budget for 2024-25 advances the new made-in-B.C. Critical Minerals Strategy in collaboration with First Nations, industry, local governments and the public, and strengthens resources for mine permitting. The International Energy Agency (IEA) has estimated a sixfold increase in demand for critical minerals will be needed by 2040, largely to supply the energy transition. Of the 31 minerals on the federal government’s critical minerals list, 16 are found in the westernmost province.
There are 17 critical mineral mines proposed for B.C., and a recent economic impact study on them found that, if all were built, their development and construction alone would generate $36 billion in near-term investment. That would result in an economic output of $80 billion, labour income of $23 billion, and $11 billion in tax revenues. The longer-term impact of these mines, once in operation, could reach nearly $800 billion over their lifespans. Five proposed gold mines in B.C., furthermore, would exceed $29 billion in economic activity over their lifespans.
The importance of forestry as a driver of the provincial economy has unfortunately declined in recent decades and 2023 was no exception with the volume of exports dropping 13.2 per cent. Timber supply issues in the face of insect infestations, wildfires, conservation measures and fluctuations in demand are largely responsible. That said, mass timber is an emerging sector in B.C. with strong innovation potential in the areas of building design, product manufacturing, and construction technology.
Roughly $90 billion worth of energy mega-projects are nearing completion in B.C. – the Trans Mountain pipeline expansion, the LNG Canada and Coastal GasLink pipeline, and Site C dam – with tens of billions of dollars of further investments still to come in other energy projects, including two LNG terminals led by First Nations (Cedar and Ksi Lisims LNG), green hydrogen and ammonia production proposals, and new renewable energy and transmission projects. B.C. will also enjoy the fruits of capital investment in liquefied natural gas and electricity generation with the completion of the LNG Canada plant and Site C, which will lift export activity and create positive spillover effects in local areas and government finances.
High technology continues to grow, with B.C. ranked third nationally in venture capital investment in 2023 at $1.2 billion, following Ontario ($3.3 billion) and Quebec ($1.4 billion). Blockchain developer LayerZero Labs alone secured $120 million in a Series B financing. In a 2023 survey by office leasing company CBRE, Vancouver tied Austin for the highest job growth since 2021 among the 30 largest technology hubs in North America.
In terms of exports over a 12-month period from May 2024, there was a jump in farm, fishing, and intermediate food products, which were up 50.9 per cent to $298 million.
The provincial government aims to build on these strengths. B.C.’s Budget 2024 provides a record $43 billion in capital funding for schools, post-secondary facilities, housing, health-care facilities, roads and other infrastructure over the next three years. The province continues its work through its CleanBC plan to transition to a low-carbon economy, providing more rebates on heat pumps to households with low and middle incomes and increasing funding for electric-vehicle public charging stations.
Building on the momentum of its economic strategy, StrongerBC, the government continues to focus on the development of priority innovative sectors such as mass timber, clean tech, life sciences, biotech and biomanufacturing, quantum computing, manufacturing, agritech and maritime industries.
Other new initiatives focus on alleviating the cost of living. To help people through the impacts of global inflation, a BC Family Benefit Bonus means that more than 340,000 families will receive a 25 percent bonus with their monthly family benefit in 2024. This includes an estimated 66,000 families that haven’t received the BC Family Benefit previously.
A one-time BC Electricity Affordability Credit will help reduce electricity bills for people and businesses in the coming year. Small and growing businesses will also receive help with the impacts of inflation and labour shortages, through a higher Employer Health Tax exemption threshold, doubled from $500,000 to $1 million.
Expanding the First Time Home Buyers program will help more people save more money when buying their first home, while other tax changes will lower the cost of new home and rental construction. New investments in BC Builds will speed up the development of housing by bringing together underused land, low-cost financing, and grants to deliver more homes for people and families with middle incomes. •
Letters
Features
Regions
Mainland-Southwest: Ripple Effect
Vancouver Island: Welcoming Shores
Thompson-Okanagan: Urban Makeover
Kootenay: Hidden Gem
Cariboo: Pioneer Spirit
North Coast-Nechako: Sea Change
Northeast: A New Energy Era