On the waterfront: Vancouver Island’s economy continues to show promising growth

As the seat of British Columbia’s provincial government in Victoria and a popular destination—boasting endless oceanfront and Canada’s most benign climate—for remote workers, Vancouver Island has fared better economically in recent years than the province’s other regions. The population, real estate development and retail spending all continue to grow quickly.

The economy of the Capital Region, long rooted in tourism, public administration and higher education, is increasingly buttressed by various high-technology industries. A fall 2024 study by the South Island Prosperity Partnership identified more than 60 life sciences and health informatics companies in and around Victoria that account for 13 percent of B.C.’s total employment in the sector. Some of the largest firms include StarFish Medical, Aspreva, Aurinia and Eupraxia Pharmaceuticals.

Open Ocean Robotics of Victoria was awarded a grant of $800,000 from the federal government last year to scale up production of the Data Xplorer, its unmanned, solar-powered surveillance vessel. As part of $3.5 million in grants for innovative Island businesses, Ottawa likewise gave Industrial Plankton $900,000 towards a manufacturing plant for its bioreactors that produce algae and seaweed for feeding to farmed shellfish.

Investments continue in the tourism industry. A 130-room hotel is due to be completed at Victoria International Airport this year. And in July, Chard Developments and Knightstone Hotel Group broke ground on a new eight-storey, 167-room hotel in downtown Victoria. To carry the Hyatt brand, the hotel will incorporate a 19th-century façade, helping maintain the heritage character of the neighbourhood. It is expected to be completed in 2028.

New and improved

Other parts of Vancouver Island and the Sunshine Coast are finding ways to complement mostly mature resource industries such as forest products, fishing and farming. Among notable capital projects, BC Hydro is refurbishing its three dams on the Campbell River system at a cost of $1.25 billion to $1.78 billion through 2029. The first to be worked on is the Ladore Dam, built in 1949. The work will include seismic upgrades, reducing the risk of floods and other failures in the geologically active zone.

The Island Health authority is building a new $1.45-billion hospital for the Cowichan Valley just outside Duncan, to be completed in 2027. A new recycling venture, the Building Materials Exchange, aims to take construction waste from sites stretching from Victoria to Nanaimo and find other contractors that can make use of the material.

In September 2024, Campbell River opened the Rail Yard Market, a combination downtown revitalization project, visitor attraction and business incubator. The space features colourfully painted containers where retail startups can test the market at an affordable rent before graduating to more permanent premises. The first group of vendors includes a baker of pet treats, a handcrafted pottery shop, a dessert maker and a nature-inspired fashion boutique.

“This project is unique because our tenants are required to participate in our business development program, recognizing that many people have great ideas but need help developing business acumen,” says Rose Klukas, director of economic development and Indigenous relations for the City of Campbell River, which won the Community Project Award (Population more than 25,000) at BCEDA’s 2025 Economic Summit.

“We’ve seen fantastic results so far, including increased foot traffic and positive community feedback. Additionally, we have a list of people interested in joining the next cohort,” Klukas adds.

Reconciliation in action

Another BCEDA award-winning project has taken shape on Vancouver Island’s west coast, in Port Alberni. Clutesi Haven is the outcome of a Community Economic Development Initiative (CEDI) workshop between the City of Port Alberni, Tseshaht and Hupacasath First Nations in 2023. All three governments sought to create a community gathering space on the popular Highway 4 tourist route to the surf town of Tofino and Pacific Rim National Park. Their dreams rested on Clutesi Haven, an underused marina property on the Somass River running through town.

The plan the partners settled on was a vibrant vendor village of “seacans” (repurposed shipping containers) with an Indigenous sensibility, including art and signage telling the story of the area and its people. The development will also feature a stage for performances, seating for visitors to eat al fresco and waterfront paths perfect for spotting marine wildlife.

Honoured as the best Economic Reconciliation (Population 10,000-25,000) project for 2025 by BCEDA, Clutesi Haven is not only a symbol of cooperation between the three communities but also a template for taking on bigger projects together in the future.