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BC Politics

BC's 'Bright Spot' Economy Not So Sunny in North and Interior

'It's very clear we have two different economies in British Columbia,' says NDP's James.

Andrew MacLeod 1 Mar

Andrew MacLeod is The Tyee's Legislative bureau chief in Victoria and the author of A Better Place on Earth: The Search for Fairness in Super Unequal British Columbia (Harbour Publishing, April 2015). Find him on Twitter or reach him here.

With British Columbia's economic growth forecast to lead Canada in 2016, Premier Christy Clark has been bragging about the province being a bright spot.

But recent indicators suggest there's little need for sunglasses throughout much of the province, particularly in what's been called B.C.'s Heartland.

"The key issue right now for the province is there's a divergence," said Bryan Yu, a senior economist for B.C. at the Central 1 Credit Union.

The southwest of B.C. is growing due to contributions from several sectors of the economy, he said in an interview.

Vancouver, and to a lesser extent Victoria, is doing well with strong real estate, construction, tourism, and film and television production industries, some of which is helped by the low Canadian dollar, he said.

Meanwhile, the rest of the province is struggling, challenged by low commodity prices and weakness in Alberta, Yu said.

In the north, central and east of the province, there have been reports for a few years of layoffs in the mining industry, natural gas is down, and forestry has been stable at best, he said. "It's not going gangbusters right now."

The disparity is showing up in Employment Insurance data. In November, calculated using a three-month average, the number of EI beneficiaries in the Lower Mainland was down 5.9 per cent from a year earlier, Yu wrote in a February briefing.

But over the same time, the number of people receiving EI benefits grew by 20 per cent in each of the Northeast, Thompson-Okanagan and Kootenay regions, he found. In the Cariboo, the number was up by 17 per cent.

Ebbs and flows

To Joel McKay, a spokesperson for the Northern Development Initiative Trust, the ebbs and flows are normal for areas that depend on selling resources. "That is in some ways the story of Canada," he said. "As the markets shift, our communities shift with it."

The NDIT, which was set up more than a decade ago with an infusion of cash from the provincial government, is working to encourage sustainability and diversification, but there's only so much that can be done to mitigate ripples from the global economy, he said.

"The economy in central and northern B.C. is definitely going to be tracking on a different path in 2016 compared with the Lower Mainland, Victoria and Kelowna," he said.

Michael de Jong, B.C.'s finance minister, recognizes the challenges facing what the government used to call the Heartland.

"There's no question commodity prices have had an impact on the resource sector," he said. "That tends to reveal itself firstly outside the Lower Mainland, though it does have an impact ultimately in the Lower Mainland, so it's something we're watching."

Economic diversity is a strength of the province, and the budget included measures aimed at further diversity, de Jong said.

Asked to what degree those measures were tailored to rural areas, de Jong said, "The rural dividend is about as specific as you can get."

The rural divided, a $25 million annual fund, is for communities "struggling to reinvigorate and diversify their local economies," according to the 2015 news release announcing the program.

Signs of struggle obvious, says NDP

"Those are not huge dollars to provide support," said Carole James, the NDP opposition finance critic.

James questioned whether it was necessary to start a new program when development funds like the NDIT have had some success doing similar work, at least in some regions of the province. "It's always the flavour of the day with this government," she said.

James represents a Victoria constituency, but she is a frequent visitor to Burns Lake, where her husband Al Gerow is a former elected chief of the Burns Lake Indian Band, and was recently in Fort St. John. "Those are communities where people are hurting," she said.

Across the north, the signs of struggle are obvious, James said. "I heard the premier stand up and say she was proud of the line-up of people for jobs for [the Site C dam] at the job fair that just happened," she said. "To me that's not a positive sign -- when you have people around the block and around the area looking for work, that's not a good sign.”

Cuts made during the BC Liberals' first term in office after 2001 continue to affect many small communities that lost courthouses, conservation officers and other services, James said. "You see a lot of decisions the government made in its first term that are coming back now to roost," she said.

"It's very clear we have two different economies in British Columbia," James added. "The Lower Mainland that is being fuelled by a real estate boom and the rest of the province."

But even in the Lower Mainland, many people are being left out, she said. "The real estate boom is not helping them as individuals who can not even dream of having a house."

An NDP government would create jobs in rural areas by funding people to update the inventory of the province's forests. "You could do some amazing things in the area of reforestation," she said. "We've talked about the importance of the forest industry and the lack of attention government's given to this."

She also said the NDP's idea to cancel the Site C dam project and replace it with a province-wide energy retrofit program would help. "What we're saying there is instead of creating a mega-project where you have camps and people living in camps, why wouldn't you implement something like Power BC where you do retrofit programs in every community in British Columbia?"

Such investments, along with funding apprenticeships and trades training in rural and First Nations' communities, would make a big difference, James said.  [Tyee]

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