– Woody Hayes, FCPA, FCA is a retired partner from Hayes Stewart Little & Co. (now Grant Thornton LLP). The CPABC Regional Check-Up report is available at www.bccheckup.com.
BC – Employment in resource-based industries continued to fluctuate in 2016, and some industries in the middle and northern sections of Vancouver Island experienced significant job losses. However, communities with diversified economies did experience positive gains, according to CPABC Regional Check-Up, an annual economic report by the Chartered Professional Accountants of British Columbia.
Uncertainty over commodity prices led to a reduction in the number of resource-based jobs in the middle and northern section of the Island. Our region’s mining industry lost 1,300 jobs. This decline can be attributed to the closure of the Quinsam coal mine near Campbell River, as well as Alberta’s economic downturn, which affected the region’s residents who commuted to work there.
Nevertheless, resource-based industries did show signs of potential. Commodity prices look to be on a path of slow recovery, so we should expect increased mining activity in our region.
Various quarry operations as well as drilling exploration and economic assessment of the Northisle Copper and Gold Inc. porphyry mine near Port Hardy continue to be active. And most recently, Nyrstar conditionally approved restarting the Myra Falls zinc and copper mine near Campbell River, which should also encourage more mining activity.
Communities in the middle and northern part of the region that have established diversified economic sectors experienced gains, particularly in tourism. Airport passengers increased in Nanaimo, Campbell River, and Comox. Ferry passengers between the Lower Mainland and communities on Vancouver Island and the Gulf Islands increased by 3.7 per cent.
Hotel occupancy also increased by 8.9 per cent in Nanaimo. Additionally, favourable weather conditions led to a good year for the agricultural sector, which, though small, is an important part of the economy in some mid-Island communities. This sector has also benefitted from expanding viticulture and wine production in the region.
Recently announced major capital investment projects also have the potential to bring jobs and economic benefits to the middle and northern part of the region. In the fourth quarter of 2016, three of the five proposed projects added to the BC Major Projects Inventory were located in this area.
They are: the $20 million Vancouver Island University trades complex in Nanaimo; the $20 million Front Street Hotel development in Nanaimo; and the $15 million transit operations and maintenance facility in Campbell River.
Other major projects announced for this area in 2016 also included the $15 million North Courtenay Connector. Although small in terms of value compared to resource-related projects, these undertakings will generate employment in some industries, such as construction and spin-off business.
Looking forward, economic growth in the middle and northern areas of the Vancouver Island/Coast Development Region is predicted to remain relatively stable. While there is uncertainty in regards to resource-based industries, the tourism industry is predicted to remain relatively strong.
A low Canadian dollar, combined with travel restrictions to the US are promising for the tourism industry, and January 2017 data shows that hotel occupancy and airport arrivals are on the increase in communities such as Nanaimo. Continuing population growth in areas such as Nanaimo, Courtenay, and Campbell River also bodes well for the region.
