British Columbia: The Sustainable Advantage

Credit: The District of Elkford in the Kootenay region is one of many small communities thriving thanks to strong commodity prices. |

British Columbia’s economy continues to outperform the nation. With its new StrongerBC Plan, the government hopes to keep things that way.

In the face of global uncertainty around inflation, rising interest rates and geopolitical tension, Canada’s westernmost province looks well poised to persevere.

Of all the provinces, British Columbia was one of the quickest to recover from the disruption of COVID-19. Business activity, housing starts and major project investment returned to or exceeded pre-pandemic levels by the end of 2021, the Chartered Professional Accountants of B.C. reported in their B.C. Checkup 2022. The number of active businesses has made up for losses in 2020 and now surpasses the 2019 level by a considerable margin.

“B.C.’s economy has remained a picture of resilience through the pandemic,” Central1 Credit Union chief economist Brian Yu wrote in an economic analysis last fall. “Employment has more than rebounded, unemployment rates have returned to pre-pandemic lows and labour scarcity is an increasing issue for businesses.”

Technology and health care saw robust growth in 2021, Yu’s analysis pointed out. Generally strong commodity prices proved a boon to B.C.’s natural resource industries. The sectors seeing the greatest increase in business formations were information and culture (+8.7%), professional services (+7%) and food manufacturing (+5.1%) while wholesale trade (-3%) and tourism (-1.9%) continued to retrench.

Credit: Culinary tourism got a boost following recognition by the Michelin Guides and Tripadvisor.

But today even the tourism and hospitality sector has reason to be hopeful. China’s reopening following three years of stringent COVID-related travel restrictions is expected to provide a boost to trans-Pacific tourism. Culinary tourism stands to gain too. In late 2022, the Michelin Guides bestowed stars on eight Metro Vancouver restaurants. Tripadvisor’s Traveller’s Choice 2023 “Best of the Best” awards named Vancouver among the world’s 20 premier foodie destinations. Looking ahead, the world soccer governing body FIFA has named Vancouver a host city for the 2026 men’s World Cup, the most-watched sporting event on the planet.

The provincial inventory of projects proposed or under construction with a budget over $15 million stood at $389 billion as of the third quarter of 2022. Among them, all actively underway, are the LNG Canada natural gas export terminal in Kitimat ($36 billion), the associated Coastal Gaslink pipeline ($14.5 billion), Site C hydroelectric project ($16 billion) and Trans Mountain oil pipeline ($30.9 billion). These projects lie primarily in the northern and Interior parts of the province, helping spread economic activity to the hinterland.

Last year saw an unprecedented situation, where the number of job vacancies in B.C. exceeded the number of people looking for work, Business Council of British Columbia senior policy advisor Jock Finlayson and chief economist Ken Peacock noted in a Year in Review article published in December. “As the economy slows in 2023, labour market conditions are likely to normalize’ somewhat, such that the number of job seekers again exceeds the number of job vacancies,” they predicted.

Central1 forecasts 1.5% population growth in 2023, 1% employment growth and an unemployment rate averaging 5.9%. The credit union projects real GDP growth of 1.3% this year and 2% next, against a backdrop of continued inflationary and interest-rate pressures globally. Consumer spending will continue to inch upward, despite a pullback in the housing sector related to the rise in interest rates.

So, while growth may be slower than in the immediate aftermath of the pandemic, the provincial economy is expected to keep moving forward.

Blueprint for the Future

B.C.’s consistently positive economic performance so far this century can be attributed to a combination of luck, desirability as a place for talented people to live and a maturing industrial base no longer subject to the oscillations of natural resource pricing. Last year the provincial government came out with a uniquely comprehensive plan to further harness these advantages to support clean and inclusive growth going forward.

Built partly on the work of University College London professor and economic advisor Mariana Mazzucato, the StrongerBC Economic Plan identifies priorities including supporting people and families by enabling higher aftertax incomes, providing more accessible health and child care and expanding educational opportunities; building resilient communities able to withstand the challenges of climate change, offer affordable housing and provide 21st- Century infrastructure such as high-speed internet; and advancing reconciliation with Indigenous peoples.

The plan outlines a pathway to a greener economy, one that will meet B.C.’s existing climate commitments and position the province as a leader in environmental and social responsibility by supporting clean technology adoption. It outlines ways to foster innovation across the economy by developing the talent pool and encouraging industries that add value to natural resources.

Some specific actions by the B.C. government pursuant to StrongerBC include the Future Ready strategy, which provides funding for training in sought-after skills; creation of the InBC Investment Corp. to provide venture capital to companies committed to growing here; development of a Trade Diversification Strategy and an Industrial and Manufacturing Action Plan; and establishing an ESG Centre of Excellence to promote the adoption of environmental, social and governance principles. Expect more spaces for students in B.C. postsecondary institutions, a Mass Timber Action Plan to promote the use of this low-carbon building material and a new Indigenous-led economic development agency focused on First Nations communities. StrongerBC calls for all new buildings to be carbon-neutral as of 2030.

Credit: International travel may be the last sector to fully recover from the pandemic. Passenger traffic at Vancouver International Airport is around 90% of its 2019 peak

“Since launching the plan, we have accelerated the timeline on closing the digital divide giving more communities access to high-speed internet,” said Brenda Bailey, Minister of Jobs, Economic Development and Innovation. “We’ve also expanded access to affordable child care to help parents balance the needs of home and work. And we’re making record investments in crucial economic infrastructure and housing, while providing support for growing new sectors such as life sciences, clean technology, and agritech.

“The StrongerBC Economic Plan is working with a continued focus on having the backs of businesses and workers as we work through challenging times together and build a strong and sustainable economy that works for everyone,” Bailey added. “An economy that is built for all is an economy built to succeed.”