Northern Development Initiative Trust (NDIT) released the 2021 State of the North Economic Report on April 6 with a focus on how key industries fared in year two of the COVID-19 pandemic.
NDIT CEO Joel McKay said the report contains “good news, bad news and a lot of uncertainty” as the region is faced with labour shortages, slow population growth and “a myriad of other risks” from floods, fires and the ongoing war in Ukraine.
McKay also pointed to major project constructions and strong commodity prices that he said will “likely continue to support” various industry sectors for the next few years.
The report was independently researched by the MNP accounting firm and found that while the economy in northern B.C. “remains relatively strong” there is a “massive” labour shortage.
As of Nov. 2021 overall employment in the Cariboo and northwest are up year-over-year but remain below 2019 levels, while employment declined in the northeast. Reported third quarter statistics from 2021 show a 75 per cent increase in job vacancies compared with 2019.
The overall job vacancy rate has climbed to 6.8 per cent since the third quarter of 2021 compared to 3.7 per cent at the same time in 2019.
The forestry sector was supported by high prices in the first half of 2021 but those prices fell “significantly” in the second half. Projects in the northeast and northwest are expected to support the economy and re-opening of borders is expected to boost tourism.
Despite two years of the pandemic and “ongoing consolidation” in the forestry sector, McKay said projects such as Site C, Coastal GasLink, LNG Canada and the Trans Mountain expansion have brought thousands of workers into the north along with billions of dollars of private sector investment. Government support programs and infrastructure investments have also helped buoy the economy.
Strong commodity prices are expected to continue into the mid-2020s, which is good for the mining industry, oil and gas, transportation and parts of the forestry sector.
The report normally comes out in January but was delayed to include 2021 census data. McKay said the census data doesn’t confirm anecdotes about Lower Mainland residents moving north to escape high housing costs as the north saw much slower population growth between 2016 and 2021 compared to the rest of the province.
All things considered, McKay said there is now a “window of opportunity” for the north to grow small and medium businesses, while also using the proceeds of public sector investments to improve infrastructure, amenities and services in northern communities.