PRINCE GEORGE – As the ‘generational major projects era’ nears, Northern Development’s “State of the North” report is calling upon the northern B.C. region to work collaboratively to identify new projects and work together towards diversification.
“With Coastal GasLink now complete, and LNG Canada, Site C and TMX not far behind it, the region – and province – will face a considerable downshift in economic activity,” the report states. “Our advice to address these challenges is simple: the region must collaborate to identify and work together on shared priorities to diversify and create community resiliency, and we must look to ourselves and senior levels of government to create the conditions for economic success.”
The report notes that although continued investment at the Port of Prince Rupert, the development of the Blackwater Gold project and possibly the Cariboo gold project, along with several hospital projects, will bolster activity in the region, rising costs, high interest rates, investment uncertainty and a shrinking private sector labour pool have the potential to exacerbate existing challenges in the regional economy.
“Unemployment levels in northern B.C. ticked up to 5.37% in Q4 2023 compared with 3.92% for the same period the year before, a slight improvement from previous years and, historically, not a bad unemployment rate,” the report adds. “Yet that rate is reflective of the downturn and private sector job loss in Northern B.C., largely due to ongoing forestry sector consolidation.”
The report gives a number of reasons for that consolidation, with more closures on the horizon past the recent announcement that Canfor was not going to proceed on its Houston sawmill project, citing the lack of a reliable fibre supply. Other mills in the province report that they are forced to purchase U.S. wood chips, which comes with the 30-plus percent exchange rate – while B.C. companies don’t reach annual allowable cut targets, despite the province being flush with trees.
“With those closures, we will see service and supply sector job loss and an erosion of the tax base in municipalities, which is beginning to affect local government’s ability to respond to community-based issues, particularly in communities where forestry was the sole industry,” the report says.
B.C.’s real GDP growth has declined from 7% in 2021 to 3.85% in 2022, which is not unexpected given the outsize activity experienced in the economy during the COVID-19 response period, the report notes, although it does add that by 2022 B.C.’s GDP has now surpassed 2019 levels in dollar amounts, which demonstrates a recovery from the Covid pandemic.
Business Examiner Staff
