Published On: Thursday, 25 May 2017
Vancouver Island’s Resource Economy Remains Cautiously Optimistic
- The CPABC Regional Check-Up reports look at British Columbia’s eight Development Regions as a place to work, invest, and live. The reports are available online at: www.bccheckup.com.
DUNCAN – According to the latest CPABC Regional Check-Up, an annual economic report by the Chartered Professional Accountants of British Columbia (CPABC), the overall economic prospects for the Vancouver Island/Coast Development Region are positive, but uncertainty surrounding the softwood lumber agreement, the North American Free Trade Agreement, and the global trade climate may dampen growth.
“Unlike the southern tip of the Island, the mid and north Island are largely dependent on our resource industries. We saw increases in the export of wood products and logs of 2.4 and 22.1 per cent respectively, which led to employment gains in the manufacturing industry in 2016,” said Woody Hayes, FCPA, FCA.
“While we may see some scaling back in manufacturing activity should global demand decline, with the low Canadian dollar and an expected increase in US housing starts demand for our region’s wood products and logs should continue.”
Another bright spot in the economy is in the real estate market. With expected in-migration of new residents to all parts of the Island, the region’s housing activity is expected to remain busy.
Continued population growth and demand for housing will also propel employment in the construction, the finance, insurance, real estate and leasing, and the business, building and other support services industries.
On the other hand, the outlook for the mining sector remains uncertain. The region’s last operating coal mine, the Quinsam mine, closed its doors in 2016 due to global surplus and weakened demand.
This, along with overall reduced mining activity across BC and Alberta contributed to the 1,300 job losses in the region’s forestry, fishing, mining, quarrying and oil and gas industry. However, as commodity prices begin to recover, exploration and economic assessment activity should begin to pick up in the region.
“Another traditional mainstay for our region is the agricultural industry. Favourable weather conditions and the expansion into viticulture and wine production led to a good year,” says Hayes.
“As a result, the agricultural industry added 1,500 new jobs while the food and beverage manufacturing sub-industry also added 1,300 jobs. However, the weather has been particularly cold this year, with the result of delayed crops by about a month. This has a special impact on viticulture where early heat is necessary for the timely production of crops and this creates uncertainty in that industry."