2019 Table of Contents PERSPECTIVE –TRENDS OF NOTE
PERSPECTIVE – TRENDS OF NOTE...... 3-5
LIMITATIONS...... 6
YEAR IN REVIEW AND OUTLOOK...... 7-13 Macroeconomic Indicators BC Real GDP Growth Rate 2017/18, Exchange Rate, Unemployment Rate Infrastructure and Development Building Permits, Housing Starts, Infrastructure Investment, Major Infrastructure Projects
BUSINESS ENVIRONMENT & INVESTMENT ATTRACTION...... 14-17 Number of Businesses, Insolvency, Business Formations Skilled and Entrepreneurial Immigration PNP Applications, Skills Immigration, Entrepreneur Immigration POPULATION AND LABOUR FORCE...... 18-22 n behalf of VIEA and the Population Growth, Population Distribution, Labour Economic Report Committee, I am pleased Force, Employment Rate, Participation by Region and to introduce the 2019 State of the Island Age, Employment by Industry, Share of Employment by Sector on VI and in BC Economic Report or, as we commonly call it, SOTIER. This year marks the fifth annual INDUSTRY ANALYSIS...... 23-44 Oedition of SOTIER and it is now established Tourism as a must read in the business and investor Visitor Indicators and Ferry Traffic communities. Manufacturing Distribution of Businesses SOTIER was first published in 2015 with a Aquaculture & Agriculture goal of providing data, analysis and insight Shellfish and Finfish Licenses, BC Aquaculture specific to Vancouver Island. The intent was Production, Distribution of Agrifoods Businesses to find reliable, repeatable data that would 2019 EDITION Island Liquor - Crafting a New Industry allow us to identify trends in the Island Forestry economy through the years. We continue Distribution of Businesses, Employment, Timber to seek new, relevant data and you will see Processing Facilities, Product and Log Cargo Volumes, some of that reflected in this year’s report. Published in Canada by Harvest Volumes The report complements the successful VANCOUVER ISLAND Coast Forest Sector Revitalization - Positioning for Long ECONOMIC ALLIANCE Vancouver Island Economic Summit put on Term Success (VIEA) annually by VIEA. High Technology Prepared for VIEA by Distribution of Businesses This year’s report remains true to those MNP Island Tech original ideas and goals, providing what Printing Education is now the usual data on the economy HEMLOCK PRINTERS Post-Secondary International Enrollments by Regional and demographics of the region and the Districts and on Vancouver Island communities. As you read through it, Design & Layout you will realise that Vancouver Island BLACKBERRY COST OF LIVING & AFFORDABILITY...... 45-50 CREATIVE Housing-Benchmark, Living Wages, Median Wage Rates continues to be a wonderful place to live work and play, but we still have areas for Homelessness - A Social & Economic Crisis Copyright improvement and new opportunities to VIEA 2019 IN CLOSING...... 51 nurture and grow. We trust you will find All rights reserved. this year’s report insightful and thought provoking. $195.00 CANADA ISBN 978-1-7751480-0-5 Following global and national trends, the BC economy experienced more moderate growth in 2018, but remained one of the
2 OCTOBER 2019 www.viea.ca STATE OF THE ISLAND ECONOMIC REPORT 3 PERSPECTIVE –TRENDS OF NOTE
strongest economies in Canada. On the Island, (and eventually much more…) has been a major infrastructure projects such as the huge success. We look forward to reaching a McKenzie Interchange, John Hart Generating point where we will have enough data to start Station and Kennedy Hill Safety Improvements quantifying the impact. VIEA is the first non- offset contractions in the forestry and housing governmental organization to be awarded sectors. While the headline numbers show Foreign Trade Zone (FTZ) designation and continued increase in new businesses being Vancouver Island is the first regional FTZ. As formed and fewer bankruptcies, there are this initiative matures, we hope to be in position concerning signs in the first half of 2019 as to gather data on import/export activity specific business formations slowed and bankruptcies to the Island. increased compared to the first half of 2018. The labour market in the region boasts the lowest Indigenous business continues to move forward regional unemployment rate in the province. on the Island as numerous First Nations The tight labour market is a driver for have created development corporations. continued migration to the Island and that While anecdotal information exists regarding migration is the main driver of population partnerships and new ventures in various growth. Population on the Island continues to sectors such as the Huu-ay-aht Nation and grow at about the provincial average and that Western Forest Products joint ownership and growth was fairly evenly distributed across management of TFL 44, and Nuu chah nulth communities. Migrants to the region come Seafood LP becoming the major shareholder mainly from other parts of the province and, to of St. Jean’s Cannery and Smokehouse, we a lesser degree, other provinces. An interesting are working to engage First Nations in a data trend is the shift in working age population to collection process so that we can include those in mid-career (Generation X) and newer accurate information on the Island’s Indigenous entrants to the workforce in younger age economy in the Economic Report. groups (Post-millennials). In an effort to make this report accessible to Feature articles in this year’s report highlight anyone in the world interested in our Island the burgeoning local beer, wine and spirits economy, 2018 saw SOTIER made available for industry and some of the challenges it faces. sale through Amazon. We will continue to make We have a feature piece on the changing the report available through this channel. nature of the coast forest industry as another VIEA is dependent on sponsors and volunteers revitalization initiative has been introduced. for its success and the SOTIER publication This piece also introduces a new VIEA initiative is a result of great sponsors and dedicated focused on greater use of wood waste. The member volunteers. I would like to thank contribution of the tech sector to the Island MNP for their continued support of SOTIER, economy and understanding what a tech job not just financially, but also with the time and is illustrated in our editorial on the sector. An energy of Susan Mowbray and her team. The article on the growing problem of homelessness production of SOTIER is a year-long endeavour and an appeal to the business community to overseen by a steering committee and I would be more involved is also included in this year’s like to thank George Hanson, Po Wan, Shannon report. Baikie, Joe Cristiano, Susan Mowbray and Peter van Dongen for their thoughtful and active In addition to producing the Summit and the participation on this year’s committee. Economic Report, VIEA continues to work on various initiatives to grow and develop Pip White the communities and economy of Vancouver CHAIR, 2019 SOTIER Committee Island. For instance, both the Island Good and FTZVI initiatives are directly attributable to the data collected for the first Economic Report in 2015 which showed need and potential for more goods production to strengthen the Island economy. The Island Good program to promote Island produced foods and beverages
4 OCTOBER 2019 www.viea.ca STATE OF THE ISLAND ECONOMIC REPORT 5 A YEAR IN REVIEW
This report is provided for information
LIMITATIONS purposes and is intended for general guidance only. It should not be regarded as comprehensive or a substitute for personalized, professional advice. We have relied upon the completeness, accuracy and fair presentation of all information and data obtained from public sources, believed to be reliable. The accuracy and reliability of the findings and opinions expressed in the presentation are conditional upon the completeness, accuracy and fair presentation of the information underlying them. As a result, we caution readers not to rely upon any findings or opinions expressed as complete and disclaim any liability to any party who relies upon them as such.
The findings and opinions expressed in fter a strong start to the year, the presentation constitute judgments as Canadian economic growth slowed in the of the date of the presentation, and are second half of 2018 and annual economic subject to change without notice. MNP is growth fell to 1.9% from 3% in 2017.1 under no obligation to advise of any change AMuch of the slowdown can be attributed brought to its attention which would alter to weakening global economic conditions those findings or opinions. The reader must due to escalating trade tensions, continued understand that our analysis is based upon weakness in the oil and gas sector and projections, founded on past events giving cooling of the domestic housing market. an expectation of certain future events. Future events are not guaranteed to follow Against the backdrop of slowing economic past patterns and results may vary, even growth, the BC economy moderated but significantly. Accordingly, we express no remained among the strongest in Canada. assurance as to whether the projections BC benefited from infrastructure projects underlying the economic and financial in Northern BC, while a slowdown in analysis will be achieved. the forest sector and a contraction in the housing market—as a result of changes to Before taking any particular course of the mortgage rules and higher interest rates action, readers should consult their Susan Mowbray —led to an overall slowing of growth. professional advisor to discuss matters in delivering the State of Island Economic the context of their particular situation. On Vancouver Island, population and Report at the 2018 employment growth contributed to Economic Summit in Nanaimo BC. MNP LLP continued overall growth, albeit at a more moderate pace than in 2017. Tourism continued to perform well, while the forest sector started to experience the effects of the softwood lumber dispute with the US as lumber prices fell and production declined.
1 Statistics Canada. Table 36-10-0129-01.
6 OCTOBEROCTOBER 20192019 www.viea.ca STATE OF THE ISLAND ECONOMIC REPORT 7 Outlook for 2019/20 Macroeconomic Indicators
BC Real GDP Growth Rate Exchange Rate
BC Real GDP 4.5% 1.40 Growth Rate 4.0%
TD Econom- 3.5% 1.35 ics Forecast 3.0%
RBC Econom- 2.5% 1.30 ic Research 2.0% Forecast
1.5% USD CAD : 1.25 Central 1 1.0% Credit Union Forecast 0.5% 1.20 0.0% 2014 2015 2016 2017 2018 2019F 2020F 1.15 8 3 4 18 17 t- t- r-19 r-18 g-18 g-17 b-19 b-18 p-18 p-17 Jul-18 Jul-17 Jan-19 Source: Statistics Canada. Table 36-10-0402-01 GDP at basic prices, by industry, provinces and territories; TD Jan-18 Jun-19 Jun-18 Oc Oc Ap Ap Fe Fe Se Se Dec-18 Dec-17 Au Au No v-18 No v-17 Mar-19 Mar-18 May-19 May-1
Economics, Provincial Economic Forecast (June 2019); RBC Economic Research, Provincial Outlook (June 2019); 2019-Q 2019-Q 2020-Q1 2020-Q2 2020-Q3 2020-Q4 Central 1 Credit Union (May 2019). FORECASTS Exchange GDP Rate TD RBC Central 1 Credit Union Source: Bank of Canada, TD Economics, RBC Economics, Central 1 Credit Union. Global economic activity slowed in the first half of 2019, as both trade and investment The Canadian dollar declined in value relative moderated, leading to lower projected growth to the US dollar through 2018 and remained On Vancouver Island, for 2020. Canadian GDP growth is projected relatively stable through the first half of 2019. economic growth to slow to 1.3% in 2019, before increasing Following the removal of tariffs on steel and is expected to slow to 1.9% in 2020.2 Trade conflicts with the Changes in the value aluminum exports to the US, the Canadian in 2019 due to the United States and, more recently, China, as of the Canadian dollar dollar rose in value in June before declining slowing housing well as continued weakness in the oil and gas are not expected again in July after an interest rate cut by the US market, declines in sector, are contributing to the lower growth to have a significant Federal Reserve. forestry and leveling projections. impact on Vancouver off of growth in Island’s key export The July interest rate cut by the Federal Reserve tourism. The Canadian economy experienced strong sectors in the near- was the first since 2008 and reflects growing growth and close to full employment term. uncertainty around the global economic throughout most of 2017 and 2018, which outlook. With inflation in line with its 2% resulted in a tight labour market. As growth target, the Bank of Canada has taken a neutral slows, labour shortages are expected to position and left its key policy rate unchanged ease somewhat. Going forward, investment, to date; however, global trade tensions and the exports and consumer spending are all corresponding effect on economic growth could expected to grow at a moderate rate and lead to a cut in the key policy rate in the latter inflation is projected to remain near 2%.3 half of 2019 or early 2020.5
The outlook for BC’s economy is mixed. The Against the backdrop of a slowing global housing market is expected to continue to economy and rising trade tensions, the outlook contract on Vancouver Island, in the Lower for the Canadian dollar is uncertain. As of Mainland and in the Okanagan,4 which will September 2019, analysts expect the Canadian impact sectors tied to real estate such as dollar to trade in the range of $1.33 to $1.35 construction and home improvement. There is Canadian per US dollar ($0.74 to $0.75 US per also some indication that consumer spending Canadian dollar) through the end of 2019, and is lower. On the positive side, infrastructure between $1.31 and $1.37 Canadian per US dollar projects in Northern BC are proceeding, and ($0.72 to $0.76 US per Canadian dollar) through will offset declines in residential construction the end of 2020. activity and support continued growth in the province. As of September 2019, the Canadian dollar was trading at $1.32 Canadian per US dollar. 2 Bank of Canada. “Monetary Policy Report, July 2019.” 3 Ibid. 5 Scotiabank Economics. Economic Commentary, July 2, 2019 and RBC 4 Central 1. “BC Economic Outlook 2019-2021.” Economics, Financial Markets Monthly, August 9, 2019.
8 OCTOBEROCTOBER 20192019 www.viea.cawww.viea.ca STATE OF THE ISLAND ECONOMIC REPORT 9 Macroeconomic Indicators Infrastructure and Development
Unemployment Rate Building Permit Values BY REGION 2018 AND 2019 JANUARY TO JUNE (IN $000s)
NORTHEAST 7.2% 5.7% BRITISH Institutional COLUMBIA CARIBOO 5.9% Government 5.6% Jan–Jun 4.6% 2019 LOWER MAINLAND 4.6% Industrial -SOUTHWEST 4.3% 2018 4.7% VANCOUVER ISLAND 3.9% Commercial AND COAST 4.7%
NORTH COAST AND 4.2% Residential Jan–Jun NECHAKO 5.9% 2019 THOMPSON-OKANAGAN 5.1% 2018 $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 6.1%
KOOTENAY 5.3% 2018 2019 5.3%
% 0 1 2 3 4 5 6 7
Source: Statistics Canada Table: 14-10-0293-01, Table: 14-10-0090-01 and BC Stats Monthly Labour Force Source: Statistics Canada, produced by BC Stats. August 2019. Statistics.
The unemployment Housing Starts The value of building rate on Vancouver YEAR-OVER-YEAR permits on Vancouver JANUARY TO JUNE Island declined for a Island declined by 11% in the first six months of 2019 compared to the third straight year to same period in 2018. The overall decline in building permits was driven by the residential The decline was % 4.7% in 2018. 10.5 sector which experienced a 22% year-over-year accompanied by increased employment levels decline. This is consistent with the slowdown and higher labour force participation, signalling in the housing market as a result of higher another positive year for Vancouver Island’s Source: CMHC, Starts and interest rates, changes to mortgage rules, and economy. However, indicators are mixed for Completions Survey. the introduction of policies aimed at reducing the first half of 2019. The unemployment rate Construction demand from speculators and off-shore was lower compared with the same period in activity is expected investors. 2018, while employment levels also declined, to moderate as the suggesting that fewer people are working and housing market While the value of building permits has declined, that the labour force participation rate has cools and population it is important to note that they remain well declined. growth stabilizes. above historical levels and that most of the declines have occurred in the Capital region While trends in the unemployment rate and where there has been a significant increase in employment levels are consistent with slowing building activity since 2015. economic growth, unemployment remains significantly below historical levels and labour Building permits indicate construction market conditions are expected to remain tight intentions, while housing starts indicate in the near term. construction activity. In the first six months of 2019, the number of housing starts increased on Vancouver Island. The overall increase was due to large year-over-year increases in Nanaimo and Parksville-Qualicum.
10 OCTOBER OCTOBER 20192019 www.viea.cawww.viea.ca STATE OF THE ISLAND ECONOMIC REPORT 11 Infrastructure and Development Infrastructure and Development
Building Permits by Regional District MAJOR THE SUMMIT AT QUADRA VILLAGE 8 JANUARY TO JUNE 2019 (IN 000s) INFRASTRUCTURE The Summit at Quadra Village is a 320-unit residential and dementia care development PROJECTS UNDER for seniors requiring 24-hour support. It is TOTAL CONSTRUCTION located in Victoria and will replace the facilities $4,078 VALUE OF INVESTMENT at Oak Bay Lodge and Mt. Tolmie Hospital. VALUE IN $MILLIONS Construction is currently underway and expected to be completed by the end of 2019. $93,845 UTILITIES $1,244,380 9 Mt . Waddington NANAIMO SEWAGE PLANT UPGRADES The Greater Nanaimo Pollution Control Centre Secondary Treatment Upgrade $887 Project will provide additional capacity for Strathcona $404,814 sewage treatment in Nanaimo, Lantzville and $60,730 Comox Snuneymuxw First Nations. The project will Valley ensure Greater Nanaimo meets provincial and federal regulations requiring at least secondary Alberni TRANSPORTATION treatment of discharged waste. Construction Clayoquot $26,430 Nanaimo $562,795 is currently underway and is expected to be completed in late 2019. Cowichan WASTEWATER TREATMENT FACILITY – Valley $153 CAPITAL REGIONAL DISTRICT 10 $91,688 This project will provide tertiary treatment of Capital wastewater for Victoria, Esquimalt, Saanich, Oak Bay, View Royal, Langford, Colwood, and the Esquimalt and Songhees Nations. HEALTHCARE Construction started in 2018 and is scheduled Source: Statistics Canada, produced by BC Stats. August 2019. to be completed by the end of 2020. The major projects that are now completed or Infrastructure investments $86 that have updated timelines include: on Vancouver Island are being made in transportation and sewage JOHN HART GENERATING STATION treatment. Major projects under construction include: As of November 2018, the three new generators were fully operational. The remaining work VICTORIA INTERNATIONAL AIRPORT TERMINAL EXPANSION 6 includes the deconstruction and removal of the In response to rapid growth in passengers and increases in the number EDUCATIONAL old facility, which is expected to be completed of large aircraft, Victoria International Airport (YYJ) is doubling the size INSTITUTIONS in the fall of 2019.11 of the lower departure lounge, providing dedicated aircraft gates, new covered walkways, new washrooms and additional food, beverage and MCKENZIE INTERCHANGE PROJECT retail spaces. The first phase of construction is expected to be completed As of May 2019, construction is underway, and in the fall of 2019, while the entire expansion is expected to be complete $94 the project is expected to be completed by the by spring 2020. summer of 2020. 12 HIGHWAY 4 – KENNEDY HILL SAFETY IMPROVEMENTS 7 MARINE OIL SPILL RESPONSE PROJECT Highway 4 connects Tofino, Ucluelet and the Pacific Rim National Park As of March 2019, the project is on hold, as funding is tied to the Trans Mountain pipeline Reserve to the rest of Vancouver Island. The Highway 4 – Kennedy Hill AFFORDABLE 13 Safety Improvements include widening a 1.5 km stretch of highway to HOUSING expansion, which is currently delayed. two full lanes, realigning the highway to remove sharp blind corners, eliminating overhanging rocks, and building a rest area to improve the 8 Capital Regional District. Available here: https://www.crd.bc.ca/project/ safety and reliability of a section of the highway with poor sight lines capital-projects/the-summit. 9 Regional District of Nanaimo. Available here: https://www.rdn.bc.ca/ and sharp corners. Construction is currently underway and expected to $685 secondary-treatment-upgrade-project. be completed by the summer of 2020. 10 Ibid. 11 BC Hydro. Available here: https://www.bchydro.com/content/dam/ BCHydro/customer-portal/documents/projects/john-hart/JHGSRP-De- comm-Rpt-April-June-2019.pdf. 6 Victoria International Airport. Lower Passenger Departure Lounge. Available here: https://www.victoriaair- 12 Government of BC. Available here: https://engage.gov.bc.ca/mckenziein- port.com/projects-planning (Accessed August 30, 2019). terchange/construction-updates/. 7 Government of BC. Available here: https://www2.gov.bc.ca/gov/content/transportation/transportation-infra- Source: British Columbia Major 13 Times Colonist. Available here: https://www.timescolonist.com/news/ structure/projects/highway4kennedyhill. Projects Inventory, Q1 2019 local/new-spill-response-boats-sit-idle-in-nanaimo-awaiting-pipeline- decision-1.23651002. 12 OCTOBER OCTOBER 20192019 www.viea.ca STATE OF THE ISLAND ECONOMIC REPORT 13 BUSINESS ENVIRONMENT AND INVESTMENT ATTRACTION Number of Businesses with Employees
With Category Employees Trend GOODS-PRODUCING SECTOR
Agriculture, Forestry, Fishing, Hunting 1,195
Construction 4,034
Manufacturing 1,026
Mining and Oil and Gas Extraction 78
Utilities 35 SERVICE-PRODUCING SECTOR
Accommodation and Food Services 2,100
Admin. and Support, Waste Management and Remediation 1,345
Arts, Entertainment and Recreation 546 Educational Services 405
usiness growth continued on Finance and Insurance 1,054 Vancouver Island in 2018 both in terms of the number of businesses with employees Health Care and Social Assistance 3,548 and the size of businesses. The sectors with Bthe largest growth were Health Care and Information and Cultural Industries 350 Construction, which is consistent with the growing population and continued demand Management of Companies and Enterprises 128 for housing.
Other Services (Excluding Public Administration) Business formations remained above their 2,384 three-year average in 2018, while business Professional, Scientific and Technical Services and consumer bankruptcies remained below 3,490 their three-year average. However, business formations declined year-over-year while Public Administration 371 The Honourable Navdeep consumer bankruptcies increased, year- Bains, P.C., MP, Minister of over-year. In the first six months of 2019, Real Estate and Rental and Leasing Innovation, Science and 1,396 Economic Development both consumer and business bankruptcies at the 2018 State of the increased compared with the same period in Retail Trade 3,777 Island Economic Summit, 2018. Nanaimo, BC. Transportation and Warehousing 922 These trends indicate that while 2018 was a positive year for Vancouver Island, economic Wholesale Trade activity moderated and the slowdown has 884 continued into 2019. Going forward slower rates of business formation and growth in Growing Stable Declining the size of businesses are expected. Source: Statistics Canada, Business Register, Establishment Counts December 2018.
14 OCTOBER OCTOBER 20192019 www.viea.cawww.viea.ca STATE OF THE ISLAND ECONOMIC REPORT 15 Skilled and Entrepreneurial Immigration
Insolvency Business Formations Applications to the Provincial Nominee Program INCORPORATIONS BY REGIONAL DISTRICT 2018 32 131 Skills Immigration Applications Business 2017 Entrepreneur Immigration Applications Bankruptcies 31 223 2016 123
2015–2017 198 264 2015 ANNUAL AVERAGE 228 2014 320 19 140 2013 VI+COAST BC 281 0 200 400 600 800 1000
MOUNT Source: BC Ministry of Jobs, Trade and Technology. 2018 WADDINGTON Note: Due to a large inventory of applications to process, there was a 90-day program pause in 2015, which 785 ANNUAL AVERAGE led to a surplus of applications from 2015 that were processed in 2016. As a result, the 2015 and 2016 data ALBERNI should be considered in conjunction with one another. 778 CLAYOQUOT 8 75 VI+COAST BC STRATHCONA Skills COMOX The British Columbia VALLEY Immigration COWICHAN 2013–2018 Provincial Nominee VALLEY Program (BC PNP) Consumer NANAIMO 1,141 facilitates the immigration of skilled foreign Bankruptcies workers, international students, and CAPITAL NOMINATIONS entrepreneurs. Prospective applicants are nominated for permanent residency through 2015–2017 Source: BC Ministry of Jobs, ANNUAL AVERAGE Trade and Technology. either the Skills Immigration stream or through the Entrepreneur Immigration stream. 1,170 4,849 2,486 Nominees under the Skills Immigration stream VI+COAST BC Entrepreneur are selected based on the skills, education 2,334 Immigration and/or experience required for high-demand 2013–2018 occupations in the province. The number of 2018 applicants under this program on Vancouver ANNUAL AVERAGE 278 Island declined in 2018, bringing the five-year annual average to approximately 250. Between 946 4,072 WORK PERMITS 2013 and 2018, there were 1,494 applicants for VI+COAST BC Skills Immigration, of which approximately 76% received nominations for permanent Source: Office of the Superinten- 172 dent of Bankruptcy Canada. residency. NOMINATIONS Nominees under the Entrepreneur Immigration 269 stream are required to meet a determined 2015–2017 2018 financial investment amount, and demonstrate JOBS CREATED the ability to create job opportunities. The VI+COAST VI+COAST number of applicants under this stream on ANNUAL ANNUAL $92 Vancouver Island has declined significantly AVERAGE AVERAGE since 2014, though has remained relatively MILLION stable since 2017. Of the 1,145 applicants 4,049 4,313 INVESTMENT between 2013 and 2018, approximately 24% received work permits and 15% received Source: BC Ministry of Jobs, Source: BC Stats, Business Formations and Failures. Trade and Technology. nominations.
16 OCTOBER 2019 www.viea.ca STATE OF THE ISLAND ECONOMIC REPORT 17 POPULATION AND Population LABOUR FORCE
Population Growth by Region – 2017 TO 2018
+ 81
+0.7%
+1,061
Mt. Waddington +1.5% +2,459
Strathcona +1.5% +781 +1.6% Comox +1,514 Valley
Alberni +1.7% Clayoquot Nanaimo +576 +1.8% Cowichan Valley
VANCOUVER +5,173 +1.3% Capital ISLAND he population of Vancouver Island continued to grow in 2018 at a rate +11,645 | +1.4% comparable to BC as a whole (1.4%),14 and slightly below the growth rate in the Lower Source: BC Stats, Population Estimates by Regional Districts and Development Regions. TMainland. Christine Willow, Certifiied Management Consultant and Growth was broad-based, with most areas Professional Recruiter experiencing growth of between 1.3% and at the 2018 State of 1.8%. The working age population also the Island Economic continued to grow, reflecting the strong Summit in Nanaimo, Population Distribution BC. labour market across the region. VANCOUVER ISLAND AND COAST BY AGE GROUP
Growth on Vancouver Island is driven by <15 yrs Working Age Population 15-64 yrs (68%) 65+ (18%) migration from other regions in BC and, to 2008 (14%) a lesser extent, other provinces in Canada. As interprovincial migration slowed in <15 yrs 2013 Working Age Population 15-64 yrs (66%) 65+ (21%) 2017, population growth rates both in BC (13%) and on Vancouver Island have slowed. Going forward, population growth rates are <15 yrs 2018 Working Age Population 15-64 yrs (63%) 65+ (24%) expected to continue at rates similar to 2018. (13%)
Source: BC Stats, Population by Age and Sex. 14 BC Stats, Population Estimates by Regional Districts and Develop- ment Regions.
18 OCTOBER OCTOBER 20192019 www.viea.cawww.viea.ca STATE OF THE ISLAND ECONOMIC REPORT 19 Labour & Employment Labour & Employment
Labour Force Employment Rate Employment By Industry VANCOUVER ISLAND 2018 (IN 000s) Participation IN PERCENTAGES BY REGION 2018
Rate Trends (BC) Goods-Producing Sector 66.2 Construction OVERALL BY AGE BC AVERAGE 61.8% 36.1 2016 TO 2018
NORTHEAST 70.6 Manufacturing DECLINING 15.2
Forestry, Fishing, 15 − 24 CARIBOO 63.0 Mining, Oil and Gas 10.0
LOWER MAINLAND-SOUTHWEST 63.4 Agriculture STABLE 3.8 Utilities NORTH COAST & NECHAKO 64.8 1.6 25 − 44 Health Care and Social Sector 330.4 Service-Producing 45 − 64 THOMPSON-OKANAGAN 57.1 Assistance 65+ 63.5
KOOTENAY 57.8 Source: Statistics Canada. Table 14-10-0018-01 Labour Wholesale and force characteristics by sex and Retail Trade detailed age group, annual. VANCOUVER ISLAND & COAST 58.6 64.7
Vancouver Island’s Source: Statistics Canada, Labour Force Survey Estimates (Statistics labour force participa- Canada. Table 282-0122 and Table 282-0123). tion rate and employ- Accommodation and ment rate increased for Food Services the fourth consecutive 26.0 year in 2018. How- Participation Rate IN PERCENTAGES BY REGION 2018 Professional, Scientific ever, preliminary data and Technical Services indicates that both the 30.0 labour force participa- tion rate and employ- BC AVERAGE 64.9% Educational Services ment rate declined in 30.4 the first half of 2019, NORTHEAST which is consistent 74.9 Public Administration with slowing economic 31.8 growth. CARIBOO 66.7 Other Services Going forward, the 18.2 LNG Canada project LOWER MAINLAND-SOUTHWEST 66.3 in Kitimat is underway Finance, Insurance, Real Estate and Leasing and hiring will ramp up 19.4 in 2020, eventually re- NORTH COAST & NECHAKO 68.9 quiring between 4,500 Information, Culture and Recreation and 7,500 construc- THOMPSON-OKANAGAN 60.8 tion employees.15 This 16.2 is expected to attract Transportation and workers from across KOOTENAY 61.0 Warehousing BC, which could affect 14.7 the labour force on VANCOUVER ISLAND & COAST 61.5 Business, Building and Vancouver Island. Other Support Services 15.5 15 LNG Canada. Available here: Source: Statistics Canada, Labour Force Survey Estimates (Statistics https://www.lngcanada.ca/. Canada. Table 282-0122 and Table 282-0123). Source: Statistics Canada, Labour Force Survey, Custom Tabulation, Prepared by BC Stats January 2018.
20 OCTOBER OCTOBER 20192019 www.viea.ca STATE OF THE ISLAND ECONOMIC REPORT 21 INDUSTRY ANALYSIS Labour & Employment
Share of Employment continued Employment BY SECTOR ON VI on a positive growth Rod Szasz of Fire Bozz makes his 2017 path in 2018, with an overall growth rate of 2.6%. This was driven by strong pitch during the early morning tech 18.2% gains in the service sector offsetting declines in showcase of the 2018 goods sector employment. State of the Island Economic Summit in The share of employment in the service Nanaimo, BC. 81.8% producing sector increased for the first time since 2015, due to increased employment in the health care, education, retail trade and public administration sectors. Growth in health care is 2018 likely linked to the opening of the North Island Hospitals in Comox and Campbell River at 16.7% the end of 2017. Growth in Education was due to increases in employment at the elementary and secondary level, while employment gains in public administration were largely at the 83.3% local, municipal and regional levels. Declines in goods sector employment were driven by the s economic growth slows, manufacturing sector, which is linked to the Vancouver Island’s key industries are downturn in the forest sector. Share of facing significant challenges. Timber supply constraints and weak market Employment Preliminary indicators suggest that conditions have led to reductions in BY SECTOR IN BC employment growth slowed in the first half of Aemployment and production in forestry. 2019 and employment levels are expected to 2017 Changes to tenure rules aimed at stabilize as economic activity slows. protecting wild salmon and ensuring First 19.9% Nations consent are creating uncertainty around the future of aquaculture production. 80.1% DID YOU KNOW? Growth in the number of international Since 2013 there has been a generational students studying on Vancouver Island has shift in the composition of the working slowed and escalating trade tensions with age population on Vancouver Island. The China could lead to further declines in 2018 percentage of Baby Boomers (those born international enrollments. between 1946 and 1964) has declined 20.1% from 39% to 30%, the percentage of Tourism remains a bright spot; however, Generation X (those born between growth is moderating and tourism is 1965 and 1980) has remained relatively not expected to be a significant driver of stable at 30% while the percentage of growth going forward. 79.9% Millennials (those born between 1981 and 1996) has declined from 29% to 25% Emerging industries are contributing to and the percentage of Post-millennials diversification. The legalization of cannabis in October 2018 has led to the expansion Goods-Producing has increased from 3% to 14%. This Sector suggests that most of the growth in the of the industry on Vancouver Island. As working age population has been among of August 2019 there were 12 cannabis Service-Producing those in mid-career (Generation X) and retail locations and 11 licensed producers Sector younger age groups (Post-milleninals) on Vancouver Island. Film production is while the number of Millennials has continuing and there is growth in craft Source: Statistics Canada, Labour breweries. Force Survey, Custom Tabulation, declined. Prepared by BC Stats January 2018.
22 OCTOBER OCTOBER 20192019 www.viea.ca STATE OF THE ISLAND ECONOMIC REPORT 23 Tourism Manufacturing Ferry Traffic Visitor Indicators Distribution of Manufacturing Businesses JAN–JUN YEAR-OVER-YEAR CHANGE YEAR-OVER-YEAR CHANGE EXCLUDING MANUFACTURERS OF FOOD AND BEVERAGE, FOREST PRODUCTS AND HIGH TECH, ACROSS VANCOUVER ISLAND | RELATIVE TO OTHER KEY + + INDUSTRIES WITHIN REGIONAL ECONOMIES 0.4% 6.4% Agrifoods Production
2.1% 1.9% Agrifoods Manufacturing 2019 1,575,888 92,392 2018 2019 (Jan-Dec) (Jan-Mar)* Forestry Production
2018 1,569,210 86,816 Forestry Manufacturing High Tech
Passenger Vehicles Passenger Vehicles Manufacturing Hotel Occupancy UNDER HEIGHT OVER HEIGHT Note: Each symbol represents 10 businesses with employees. Symbol Mt. Waddington placements do not represent business locations. (-) + 10.6% 1.4% 6.7% 6.0%
2019 9,316 111,099 2018 2019 (Jan-Dec) (Jan-Mar)* Strathcona 2018 10,419 109,601 $ $ $$$ $ $ $ Nanaimo $ Average Daily Room Rate Buses Commercial $ $$$ Comox Vehicles
Alberni- + Clayoquot 0.6% 6.5% 1.1% 2018 2019 (Jan-Dec) (Jan-Mar)*
2019 4,950,834 Total Passengers Passengers at Regional Airports
2018 4,921,226
Source: BC Ferries. Source: Destination BC, Provincial Tourism Indicators. Cowichan *Please note that as of September 30, 2019, visitor Capital Valley indicators for April to June 2019 were not available. Tourism continued to be an important source of growth on Vancouver Island in 2018. However, there are indications that growth is slowing and gains in 2019 are expected to be modest. In the first six months of 2019, passenger volumes and vehicle traffic on BC Ferries were up 0.6% and 0.7% respectively. Passenger volumes at regional airports were up 1.1% from January to March, compared to the same period in 2018.
This is consistent with an overall slowdown in growth in tourism in BC. International overnight visitors to BC between January and June 2019 grew by 2.6%, year-over-over, compared to 4.9% year-over-year growth in 2018. In Victoria, average occupancy rates declined by 1.1% between January and June, year-over-year, while passengers through Victoria International Airport declined by 3.3% year-over-year. Source: Statistics Canada, Business Register.
24 OCTOBER OCTOBER 20192019 www.viea.ca STATE OF THE ISLAND ECONOMIC REPORT 25 Aquaculture & Agriculture Aquaculture & Agriculture Shellfish and Finfish Licenses BC Aquaculture Production FINFISH—MAY 2019; SHELLFISH—JUNE 2019 ANNUAL AVERAGE 2012 TO 2017 ($ Millions)
6 $22.4 $544.9 $567.3 6 SHELLFISH FINFISH TOTAL 626 1 4 14 9,573 81,673 91,246 25 TONNES TONNES TONNES 9 138 248 21 50 23 Note: Data were not available for the value of scallops farmed in 2015 and 2016, and, as a result, the Total 28 Shellfish and Total Aquaculture Production average values are marginally understated. Source: Department of Fisheries and Oceans, Aquaculture Production Quantities and Values. 116 3 3 20 FINFISH 11 Licenses in BRITISH After declining in 2017, salmon production in BC COLUMBIA remained stable in 2018. Export data from the first 480 six months of 2019 indicate exports have fallen by SHELLFISH approximately 12%, compared with the same period Licenses in in 2018.16 Most of the decline in exports was to Asian 50 BRITISH markets. FINFISH COLUMBIA Licenses on Oyster production and sales declined after a series of norovirus out- breaks between 2016 and 2018 led to the closure of some farms.17 To VANCOUVER help stabilize production, the provincial government introduced the BC ISLAND 258 Oyster Recovery in June 2018, which provides farmers with up to $10,000 SHELLFISH to help restock oyster beds. Licenses on In the near term, aquaculture production is expected to remain stable; VANCOUVER however, there is a risk that the escalation of trade tensions with China 43% ISLAND could affect the export market for BC seafood. There is also considerable of all BC Licenses uncertainty around future production after the provincial government on VANCOUVER and three First Nations agreed on a path forward for fish farms operating ISLAND in the Broughton Archipelago.18 Ten fish farms will close by the end of 2022, and a further seven will close by the end of 2023 unless First of54 all BC% Licenses Nation industry agreements are successfully negotiated. In addition, new rules around the granting of tenures come on VANCOUVER into effect in June 2022 that are intended to protect ISLAND wild salmon stocks and ensure First Nations consent is obtained for operations in their territories.
16 Canadian International Merchandise Trade Database. Source: Department of Fisheries and Oceans, Current Valid British Columbia Shellfish Aquaculture License 17 Government of BC. “Province supporting oyster aquaculture sector in coastal Holders as of June 27, 2019. communities.” Available here: https://news.gov.bc.ca/releases/2018AGRI0040-001198. Department of Fisheries and Oceans, Current Valid British Columbia Finfish Aquaculture License Holders as 18 Government of BC. “Government, First Nations chart path for aquaculture in Broughton Archipelago.” Avail- of May 31, 2019. able here: https://news.gov.bc.ca/releases/2018PREM0151-002412.
26 OCTOBER OCTOBER 20192019 www.viea.ca STATE OF THE ISLAND ECONOMIC REPORT 27 Aquaculture & Agriculture Distribution of Agrifoods Businesses ACROSS VANCOUVER ISLAND | RELATIVE TO OTHER KEY INDUSTRIES WITHIN REGIONAL ECONOMIES
Agrifoods Production Agrifoods Manufacturing Island Liquor Forestry Production Crafting a New Industry Forestry Manufacturing
High Tech GUEST CONTRIBUTOR Manufacturing Quintin Winks, Consultant Note: Each symbol represents 10 businesses with employees. Symbol placements do not represent Investors Group Financial Services Inc. Mt. Waddington business locations. A decade ago Dave Brimacombe was a military man and an alcohol tourist. Wherever the Canadian military posted him, Brimacombe would dive into the local drinks while gathering Craft beer breweries intelligence to one day start his own distillery. When the British Columbia government enacted Strathcona are really community hubs. They’ve become changes to liquor laws in 2013, Brimacombe was the Starbucks of the stationed at CFB Comox on Vancouver Island. Nanaimo past five years. He retired early and seized the opportunity. “Because of the regulatory changes, I saw the writing on the wall, Brimacombe says. “I wanted Comox Ken Beattie to be one of the pioneers in the industry and so Alberni- (84/21) Executive Director I got going on it.” Brimacombe is the co-founder Clayoquot BC Craft Brewers of Wayward Distillery in the Comox Valley. Since Guild starting his business five years ago, he has seen an explosion of craft alcohol on Vancouver Island. The rapid expansion is due in part to those regu- latory changes, which eliminated stiff markups on spirits and wines manufactured in BC as long Capital ” as they are produced in limited volume and Cowichan Valley made from scratch with BC ingredients. That lev- eled the playing field for local producers whose overhead is higher than competing overseas corporations. “It is significantly more expensive to hire BC staff and to own facilities in BC and so it costs more to make it, but now we don’t get SHELLFISH marked up,” says Brimacombe. While he praises how far the liquor laws have come in recent $21.5 years, Brimacombe notes they still have a long $515.4 way to go. More on that later. Unlike spirits and wines, craft breweries do not get the same tax breaks for brewing with local ingredients. But they have received other regulatory concessions. Tasting rooms allow for vat-to-table sales at the brewery, which Source: Statistics Canada, Business Register. eliminates the cost of bottling and shipping
28 OCTOBER 2019 www.viea.ca STATE OF THE ISLAND ECONOMIC REPORT 29 beer. They also create a space for people to gather, enjoy a drink and socialize without the While laws have changed to allow more limitations of a bar or pub. Sooke Brewing, private competition, BC Liquor Stores are still which opened its doors in 2017, sells almost all prevalent and in many rural towns are the only of its beer through its tasting room and ships option. Yet they won’t open their doors to local very little out of the building. The primary goal beers and spirits. “Every craft brewery should Also driving the ex- of the five owners was to create something have access to a couple of government liquor plosion are changes for the community. Sooke is a growing and stores,” Smith says. in the way producers changing place and they wanted to create a hub While craft brewers have also been shut out of of craft alcohol are that the community really needed, says John the grocery store experiment, in which grocery doing business, con- Adair, head brewer. sumer preferences stores are allowed to sell alcohol, progress is and technology. What’s more, tasting rooms provide quick cash slowly being made. Craft brewers have been flow to craft producers, who face significant recently invited to list seasonal products, such The new business start-up costs. Recent zoning bylaw changes as pumpkin beers, in BC Liquor Stores. On the model, for breweries means more communities are seeing craft marketing front, craft brewers are embracing and distilleries in par- breweries open in industrial areas, where rent technology. The BC Ale Trail app was created ticular, is focused on is cheaper. Old auto shops and fish processing for locals and alcohol tourists alike. It offers a the local community plants are particularly well suited for conversion map showing breweries in respective regions. rather than national into craft breweries, says Beattie, of the Brewers The Victoria Ale Trail and the two Vancouver or international Guild. As people patronize these establishments Island Ale Trails list 34 brewery locations from markets. it brings new vibrancy to industrial areas. Victoria to the Comox Valley. Such changes have led to breweries popping While beers and spirits have been growing up everywhere on Vancouver Island and across exponentially, BC wineries have been the province. Where there used to be less than ascending the scale of international recognition. 40 breweries just a few years ago, there are now And climate change might create a significant more than 180. With that has come increased business opportunity for wine producers on competition. In Nanaimo, a city of 100,000, there Vancouver Island. Major wine-producing are two craft breweries already operating and regions, like California and the Okanagan, applications have been submitted for two more. by 2050 might be too hot and dry to continue In this environment, breweries focus on the local business as usual. That creates opportunity market and differentiate their products through for Island wine producers who may be able flavour. Consequently people’s palettes are to grow hotter variety grapes says Brenda changing and there is more demand for beers Hetman-Craig, owner of 40 Knots Vineyard & that few would have enjoyed 20 years ago. It Estate Winery in Comox. Island producers are all began with hoppy India Pale Ales, or IPAs, already capitalizing on a burgeoning trend in then swung to sessionable ales, then sessionable consumers seeking not just organic wines, but IPAs. Then along came juicy, New England biodynamic ones as well. The term biodynamic IPAs followed more recently by sours. Now refers to production principles that care for and lagers and Pilsners are making a comeback, says protect everything in the wine-making process, Beattie, who has a handle on the latest trends as from the bumblebee to the soil, water, workers executive director of the Brewers Guild. and the environment. Barrel-aged beers are also appearing, all of “It’s a fancy word for traditional farming,” which speaks to the evolution of consumer says Hetman-Craig. “Land here on the Island tastes. Harley Smith is a partner and brew is very pure. This vineyard (40 Knots Winery) master for Nanaimo’s Longwood Brewery. The was the first time this land was ever farmed. So brewery has been operating for the past six years Canada really has an advantage because we are FROM TOP and primarily bottles its beer for distribution to Products from farming a lot less and the land is more pure.” liquor retailers. His most significant business Wayward Distillation It’s hard to say what the saturation point is challenge is getting access to government liquor House, Longwood for craft alcohol on Vancouver Island, but as Brewery, Sooke stores, he says. Brimacombe makes the same Oceanside Brewery, regulations change and producers hone their observation for his spirits. 40 Knots Winery business acumen, the market will dictate the success stories. In the meantime, Cheers!
30 OCTOBER 2019 www.viea.ca STATE OF THE ISLAND ECONOMIC REPORT 31 Forestry Forestry
Distribution of Businesses 2018 was a difficult year ACROSS VANCOUVER ISLAND | RELATIVE TO OTHER KEY INDUSTRIES WITHIN for the forestry industry REGIONAL ECONOMIES on Vancouver Island, as employment and production declined. The Agrifoods Production ongoing fibre supply issues were made worse by the 2018 summer wildfire season, which Agrifoods Manufacturing led to suspended operations at the Ladysmith Forestry Production sawmill and a complete postponement of harvesting in coastal regions by Western Forest Forestry Manufacturing Products in August and early September.19 20 High Tech Manufacturing There was significant volatility of lumber prices in North America throughout 2018. The first Note: Each symbol represents 10 businesses with employees. half of the year was defined by historically Symbol placements do not high prices due to delayed deliveries caused by Mt. Waddington represent business locations. Going forward, US weather issues in BC.21 As shipments picked up housing starts are in the second half of the year, increased supply expected to remain flat led to falling prices. while lumber prices are projected to remain The decline in prices means that the lack low. Consequently, of a softwood lumber agreement with the Strathcona continued declines in US and the resulting duties are beginning production and em- to impact some producers. In 2018 Western Nanaimo ployment on Vancouver Forest Products acquired a distribution and Island are expected. processing facility in Washington State and the assets of a wood product manufacturing company, in part to offset the impact of the softwood lumber duties by moving some Alberni- Comox operations to the US.22 Clayoquot
Overall, softwood lumber shipments to the US from the BC coast declined by 14% in 2018, while production declined by 5%, compared with 2017.23 24 In the first half of 2019, softwood exports from BC to the US were down approximately 10% while production on the Cowichan BC coast was 8% lower than in the same period Capital Valley in 2018.25 Lumber prices continued to decline as the spring building season was delayed by prolonged winter weather.26
19 Ladysmith Chronicle. Available here: https://www.ladysmithchronicle. com/news/ladysmith-sawmill-operations-suspended-due-to-log-shortage/ 20 Western Forest Products. 2018 Annual Report. 21 Canadian Forest Industries. 2019 Lumber Market Outlook. Available here: https://www.woodbusiness.ca/2019-lumber-market-outlook-5420/ 22 Western Forest Products. 2018 Annual Report. 23 Global Affairs Canada. “Monthly Export Reports (Canada-US)”. Avail- able here: https://www.international.gc.ca/controls-controles/softwood- bois_oeuvre/index.aspx?lang=eng. 24 Statistics Canada. Table: 16-10-0045-01. Lumber, production, shipments and stocks, monthly. 25 Statistics Canada. Table: 16-10-0017-01. Lumber, production, shipments and stocks, monthly. 26 Western Forest Products. 2019 First Quarter Report. Source: Statistics Canada, Business Register.
32 OCTOBER 2019 www.viea.ca STATE OF THE ISLAND ECONOMIC REPORT 33 Forestry Forestry
Distribution of Forestry Sector Employment Forest Product and Log Cargo Volumes VANCOUVER ISLAND 2018 THROUGH PORT ALBERNI AND PORT OF NANAIMO IN METRIC TONNES Total 2018 28% EMPLOYMENT 8,700 2017 55% Forestry and Logging 2016 17% Wood Product Manufacturing
Pulp and Paper Manufacturing* 2015
2014
2013
Timber Processing Facilities 2012 VANCOUVER ISLAND 2018 1M 2M 3M 4M 5M LUMBER MILLS (21) POLE & POST (2) PULP & PAPER (3) OTHER* (14) Total Forest Products Logs FACILITIES 40
Source: Ministry of Forests, Lands and Natural Resource Operations, Major Timber Processing Facilities in BC, Source: Nanaimo Port Authority Cargo Statistics, Port Alberni Port Authority. 2017/18. *Includes Chip Mills, Veneer Mills and Shake and Shingle Mills.
DID YOU KNOW? Harvest Volumes on Crown Land by Natural In January 2019, the BC Resource District (m3) government instituted the Coast Forest Sector Revitalization Initiative27 in an 2018 effort to reverse the “systemic decline” of the coast forest sector. The plan includes a 2017 series of legislative, regulatory and policy changes aimed at rebuilding solid wood and 2015 secondary industries, ensuring more fibre is available for domestic mills, maintaining a credible auction 2015 system, fostering stronger relationships between First Nations, major licensees and BC Timber Sales, and restoring public 28 confidence in the sector. Effective July 1, the fee structure for log 2014 exports was revised to be based on local harvesting economics, while a coastal fibre recovery zone was established and penalties 0 2.5M 5M 7.5M 10M 12.5M 15M for discarding wood waste were introduced to encourage wood waste being sent to pulp and paper manufacturers.29 South Island North Island–Central Campbell River Natural Resource Coast Natural Natural Resource The forestry sector is an essential industry on Vancouver Island. District Resource District District
27 BC Government News. “Forest policy reforms to rebuild coast forest sector.” Available here: https://news.gov. bc.ca/releases/2019PREM0003-000046. 28 Coast Forest Sector Revitalization Imitative Booklet. 29 BC Government News. “Forest policy reforms to rebuild coast forest sector.” Available here: https://news.gov. Source: Ministry of Forests, Lands and Natural Resources Harvest Billing System. bc.ca/releases/2019PREM0003-000046.
34 OCTOBER 2019 www.viea.ca STATE OF THE ISLAND ECONOMIC REPORT 35 Coast Forest Sector Revitalization Positioning for Long Term Success
GUEST CONTRIBUTORS
Ministry of Forests, Lands, Natural Resource
Operations and Rural Development Contacts
Pip White, Cascadia Projects
Bret Torok-Both, Coast Capital Savings
George Hanson, VIEA
According to an economic impact study supply agreements that did not encourage the prepared for the Council of Forest Industries, removal of less valuable wood that may have in 2016 forestry in the region supported 21,000 been more difficult to haul. These practices of jobs with an estimated 10,000 on Vancouver business determining and acting on what they Island and over $2.1 billion in gross domestic deem the highest and best use of provincial product.30 If you are a resident on Vancouver timber is changing. Beginning in 2018, the BC Island, most likely you know someone who government began an initiative called the Coast works in the woods, in a sawmill or in another Forest Sector Revitalization. role in the forest sector. You have also likely driven by large residual wood fibre piles in the The main goal of Coast Forest Sector spring or fall and met log trucks or chip trucks Revitalization is to develop a fair and lasting on the roads taking fibre to market. The forest strategy to create more jobs from processing sector is tough to miss. logs in BC. It starts with making forest policy changes to ensure public resources are used Since 2003, provincial policy promoted the and managed in a way that has the greatest forest sector to find the highest margin for contribution to and for British Columbians. provincial fibre. This led to many businesses The overall desire is for more value-added increasing their focus, and reliance, on manufacturing providing Vancouver Island exporting logs to other jurisdictions. At home, communities an economic base for local taxes, when initiating the manufacture of the timber a more diverse business mix, and an economic into logs in the woods, the policy of “take or connection to the surrounding lands and
photo by Cindy Stern pay” encouraged licence holders to take what forests. fibre from which they could generate the highest profit and leave what is less desirable This revitalization includes a focus on greater at the harvest site as residual fibre. This was domestic processing and greater utilization of further complicated by specific and binding residual fibre. To increase the use of residual fibre the Province of BC has introduced 30 “British Columbia’s Forest Industry and the Regional Economies”, fibre recovery zones on Vancouver Island (March 2019). Available here: https://www.cofi.org/wp-content/uploads/ FINAL-COFI-Regional-Economic-Impact-Study_Final_March2019-2.pdf. and the coast where companies will be fined
36 OCTOBER 2019 www.viea.ca STATE OF THE ISLAND ECONOMIC REPORT 37 for leaving avoidable waste above a threshold level in the forest. The with waste in the block, the project will be looking at the economics of provincial government estimates 2.4 million cubic metres of avoidable possible solutions for greater utilization of the residual and waste fibre. waste is produced on the coast and Vancouver Island annually.31 This is a significant increase from 800,000 cubic metres in 2003. A key element THE FOREST SECTOR ON VANCOUVER ISLAND HAS A STRONG PAST of the Coast Revitalization Strategy is to make greater use of the waste AND VIEA SEES AN OPTIMISTIC FUTURE. We believe that with the help and residual fibre beyond current practice. Some of this fibre can be of the provincial government and industry stakeholders, we have been directed to traditional uses such as chips for pulp mills and firewood. able to secure a hold on one thread of what we have called the ‘Gordian Opportunity also exists to introduce new uses and associated industries Knot’—the complex tangle of historic forest practices—with hopes that such as the production of biofuels and carbon sequestration. as we continue working with industry stakeholders, we will be able to unwind some of this complex weave to find solutions worthy of a more In spring 2019, the Vancouver Island Economic Alliance (VIEA) received progressive and sustainable 21st century industry. We believe that as we a grant from the BC Rural Dividend Program to undertake a Wood continue to explore alternative possibilities and get the correct groups of Recovery and Fuel Reduction Pilot project in the Cowichan Valley. In decision makers together, we can begin to rebuild this essential industry. addition to the government grant, sponsorship has been provided by Khowutsun Forest Services (KFS), MNP, the Inland Group, and Mosaic WHAT DOES ALL THIS MEAN? It means that leaving 20% avoidable Forest Management. The goals of the project are to build business-to- waste behind on the forest floor is no longer acceptable because new and business relationships within forestry and wood industries in order to existing industries need this fibre, and because it is a forest fire hazard expose and pursue innovative, cost-effective approaches to wood waste if left; it means that new thinking is required to find cost-effective ways management; help mitigate fire hazard risk by reducing fuel in the forest; to manage and transport this fibre that is currently left on the forest and help further wood manufacturing by solving the number one barrier floor as ‘waste’; it means that with aggressive harvesting and milling of to wood industry investment—secure access to fibre. pine beetle timber now on a steep decline in the BC interior and annual allowable cuts falling province wide, the demand for coastal fibre will FP Innovations is also involved in the project and, working with KFS, be greater than ever and that thoughtful work must be done to find the they are providing expertise on alternatives for dealing with waste highest and best uses for every stick of the wide variety of coastal fibre. in harvest blocks and logistics for getting residual fibre to processing facilities. Some of these ideas will be tested in harvest settings in It means that change is on the horizon and that we must be ingenious conjunction with KFS on private forestry land managed by Mosaic Forest and determined in our search for pragmatic solutions to achieve greater Management. diversity in the industry, greater resiliency in our communities, and greater wealth generation from stable and sustainable 21st century To date, the project has included an initial plenary session out of which practices. a working group has been formed. The working group is gathering information from both traditional businesses and new businesses on their As the Chinese proverb says: ‘If you don’t change direction, you will requirements for fibre. This information is being used to develop specific end up where you are headed.’ We think we are seeing the beginnings activities for testing through the KFS/Mosaic partnership in conjunction of a significant industry course correction. Time will tell as we continue with FP Innovations. In addition to the technical aspects of dealing unraveling the ‘knot.’
BC FOREST SERVICE TIMELINE (EXCERPTS)32
1849 1906 1947 2003 * 2016 First recorded Timber Manufacture Forest land defined in A “take or pay” Great Bear Rainforest export of Vancouver Act required all tim- the Forest Act as land system for waste Land Use Order & the Island lumber, to San ber cut from leases which will find its best wood is introduced Great Bear Rainforest Francisco. and licences and from economic use under a under the Forest (Forest Management) 33 lands (excluding Cas- 1914 forest crop. Revitalization Act. Act. 1855 cade Range) granted “Stumpage” 1927 1995 * Experimental forest Introduction of pulp 2018 * First steam sawmill in after March 12, 1906 adopted and Coast Forest Sec- nursery started in supply agreements. BC established by John be manufactured in defined as the tor Revitalization Victoria. Muir and Sons in Sooke, the province. amount payable established. BC (on Vancouver for Crown timber 1929 Island).* 2019 * in addition to Cowichan Lake 2005 1865 rents, royalties Experiment Station 1972 The mountain pine VIEA receives BC 1778 First recorded Timber and taxes. established. New provision beetle infestation in Rural Dividend First recorded use of Lease issued by the requiring lessee or BC forests grows to Program grant for BC timber by Euro- Government of BC to licensee of Crown 8.7 million hectares. a Wood Recovery peans - Captain James British Columbia and timber to reforest and Fuel Reduction Cook cut ships spars Vancouver Island Spar areas logged under pilot project in the at Nootka Sound. and Sawmill, Ltd. the lease or licence. Cowichan Valley.
1780 1800 1820 1840 1860 1880 1900 1920 1940 1960 1980 2000 2020
31 “Rebuilding B.C.’s Coast Forest Sector Keeping the Wealth in B.C.”. www2.gov.bc.ca/assets/gov/farming-natural- resources-and-industry/forestry/coast-forest-sector-revitalization/coast_forest_sector_revitalization_web.pdf 32 Parminter, J 2012, BC Forest Service Timeline, BCFS, accessed 12 Sept 2019,
38 OCTOBER 2019 www.viea.ca STATE OF THE ISLAND ECONOMIC REPORT 39 High Technology
Distribution of Businesses ACROSS VANCOUVER ISLAND | RELATIVE TO OTHER KEY INDUSTRIES WITHIN REGIONAL ECONOMIES Island Tech
GUEST CONTRIBUTOR
International Enrollment Graham Truax, Innovation Island
Agrifoods Production British Columbia is home to a vibrant and Agrifoods Manufacturing growing technology sector and Vancouver Forestry Production Island is an increasingly significant part of that growth. The technology sector is a major driver Forestry Manufacturing of innovation and economic benefit in BC. Total 34 High Tech revenue for this sector in 2017 was $29 billion. Manufacturing While British Columbia’s technology sector is
Note: Each symbol represents 10 still relatively small from a global perspective, Mt. Waddington businesses with employees. Symbol it continues to grow in size and importance. placements do not represent The technology sector in Greater Victoria now business locations. accounts for over $5 billion in economic impact BC’s tech sector and the industry is considered the region’s ranks third in the biggest employer with over 16,000 tech-based 35 country in terms of jobs. Since 2014, Innovation Island’s client base GDP, revenue and has created over 160 new tech-based jobs and Strathcona employment. The $16.2 million in new revenue, and attracted $16.9 36 sector accounts for million in early-stage technology investment. Nanaimo more than 100,000 By most industry-standard metrics, Canada has Comox jobs that are paid consistently accounted for approximately 4% 83.7% higher than of global tech-based productivity over the past provincial averages decade37 and British Columbia represents about according to the BC Alberni- 20% of Canada’s performance in the marketplace Technology Report 38 Clayoquot (see table below). The 2017 Canadian ICT Sec- Card. tor Profile, provided by Innovation, Science and Economic Development Canada (ISED), states The technology that “there are just under 40,000 companies” sector employs more now working in the Canadian information and people than mining, oil technology sector. The Province’s Profile of the and forestry sectors BC High Technology Sector (2017 Edition) pro- combined. vides additional reference data. Cowichan Capital Valley Canada BC Share Percentage
$184B in Revenue $29B in Revenue 16%
$83B in GDP $17B in GDP 20%
$24B in Exports $6B in Exports 25%
Considering the daunting size of the global tech industry and both national and provincial stand-
34 Profile of the British Columbia High Technology Sector, BC Stats, 2017 Edition. 35 VIATEC Impact Study 2018. 36 Innovation Island Technology Association Data. 37 The State of Canada’s Tech Sector, the Brookfield Institute for Innovation + Entrepreneurship. 38 BC Technology Report Card, https://wearebctech.com/2018-bc-technolo- Source: Statistics Canada, Business Register. gy-report-card/.
40 OCTOBER 2019 www.viea.ca STATE OF THE ISLAND ECONOMIC REPORT 41 points (outside of Vancouver), communities in a technology or innovation company can be all regions are playing an increasingly stronger considered an entity that builds proprietary role in making our province a technology leader. products or services and/or uses third-party Over just the past five years, thousands of tech- products/services in unique or innovative The 2017 Canadian nology jobs have been created in regions across ways, and then takes those products/services to ICT Sector Profile, BC outside of the Lower Mainland, with more market. provided by Inno- being created every month. Under Innovate BC’s vation, Science and Venture Acceleration Program (VAP), within While NAICS codes do provide wide-ranging Economic Develop- the province’s regional and rural communities, industry definitions and employment data, ment Canada (ISED) excluding Vancouver and the Lower Mainland, they do not capture many tech-based start- states that “there just under $200 million of direct financial impact ups or tech-related businesses and activities are just under has been achieved, with close to 1,000 tech-based commonly considered tech in the growing 40,000 companies” jobs. digital economy. NAICS-based definitions, now working in the or innovation per se, is not unique to a Canadian information Somewhat proportionately, and befitting of specific group of industries, but can be found and technology sector. smaller communities, the vast majority of tech in throughout the whole economy. this province is small business. In a recent report by BC’s Innovation Commissioner, it was stated An increasing number of businesses, if not that “the tech sector in BC consists of a growing the vast majority of small- and medium-sized base of companies across a diverse range of enterprises, rely on some form of technology sub-sectors [with] 90% of tech companies having to conduct their business. As such, many less than 10 employees ~ with a focus on services Two of the major tech-based service providers (technicians or (93%) rather than manufacturing.” players that support, other knowledge-based specialists) “count” promote and foster within NAICS workforce statistics. However, Industry Canada defines a small business as growth in the tech- those workers may or may not truly represent one with fewer than 100 paid employees and nology sector on tech-sector businesses. For example, most a medium-sized business as one with at least Vancouver Island are advertising or marketing agencies now consider 100 and fewer than 500 employees. In the tech VIATEC and Innova- digital media services commonplace; these sector, businesses with less than nine FTEs (full- tion Island; for 20+ businesses are proportionately represented to time employees) can be referred to as micro- years they have been a given trade area or region within a modern enterprises or micro-businesses. Many of these instrumental in economy. Businesses in tech that sell beyond a businesses are single-person entities, working as fostering and encour- local or regional perspective are considered to contractors or consultants, or what are known aging growth in the have the growth and scalability potential that as solopreneurs or freelancers, typically, with technology sector define tech ecosystems. annual recurring revenue(s) of less than $1 on Vancouver Island. million. Whereas VIATEC While more and more technology companies focuses on Greater are choosing to do business in places like The tech sector, by design, is a fast-moving Victoria, Innovation Vancouver Island—attracted to its excellent ever-changing marketplace filled with new Island represents the quality of life, reasonable access to an educated developments and terms that are often difficult rest of the Island and workforce, and relatively easy access to to interpret, forecast or measure. According to Sunshine Coast. Both international markets—attracting new business the Computing Technology Industry Association organizations deliver is still a challenge as Vancouver Island is in (CompTIA), we are now living in a $5 trillion the Innovate BC, a competitive environment globally with global information technology ecosystem; Venture Acceleration other regions and communities. Many of the with more than 50 million industry and tech Program (VAP) companies able to choose an Island location professionals who design, implement, manage, focusing on tech- do so for secondary offices, remote workers, and safeguard the technology that powers the nology companies. and solopreneurs who are less dependent on world’s economy.39 the requirements for capital and talent. An attractive lifestyle for employees and lower The technology sector is defined by “industries overhead costs are certainly attractive to that produce high technology goods and companies, but proximity to talent and capital services as their ultimate outputs,” according are often the main drivers in location decisions. to the North American Industry Classification Additional inducements such as tax incentives, System (NAICS). However, in business terms, infrastructure advantages and R&D resources 39 2019 Industry Outlook (CompTIA) https://www.comptia.org/resources/ are often required to persuade firms to locate in it-industry-trends-analysis. a community.
42 OCTOBER 2019 www.viea.ca STATE OF THE ISLAND ECONOMIC REPORT 43 COST OF LIVING AND AFFORDABILITY Education Post-Secondary International Enrollments BY REGIONAL DISTRICT 6,137 1,955 440
CAPITAL 8,532 2018 TOTAL NANAIMO 6,134 1,625 280
2017* 8,039 STRATHCONA TOTAL Data on inter- 5,914 1,550 265 national enrollments in K-12 for the 7,729 2018/19 school year 2016* TOTAL was not available. 000s 0 1 2 3 4 5 6 7 8 9
Source: BC Ministry of Advanced Education, May 2019 Data Submission and BC HEADset. Please note that values for 2016 and 2017 have been revised from previous reports and reflect enrollments as of November 1 in each year.
Post-Secondary International International student Enrollments enrollment at post-secondary ON VANCOUVER ISLAND institutions on Vancouver Island continued to grow in 2018, due to large year-over-year of BC 8,532 = 12.5% Total increases at Vancouver Island University and ousing prices on Vancouver North Island College. International enrollments Island appear to be stabilizing after rising at the University of Victoria and Camosun Source: BC Ministry of Advanced significantly between 2016 and 2018. Year- Education, October 2017 Data College also grew in 2018, albeit at lower rates. over-year changes between June 2018 and Submission, BC HEADset and BC June 2019 ranged from a 1% decline in Ministry of Education. Slower growth in international enrollments HVictoria to a 9% increase in Port Alberni. at the University of Victoria is likely linked These trends are consistent with an overall to tuition increases for international students. slowdown in BC’s housing market as a Businesses Tuition for incoming international students result of changes to mortgage rules, higher in Educational increased by 20% in 2018 and is set to increase interest rates, and the provincial speculation by 15% in 2019, while tuition for current tax and foreign buyers tax. Services international students is set to increase by 4%.40 Data were not available for K-12 international 392 388 405 Housing inventories are at historic lows in enrollments for the 2017/18 or 2018/19 school some areas of Vancouver Island, outside of years. 41 2016 2017 2018 Victoria. This lack of supply has fueled Business counts in the educational services increases in homebuilding across the rest Source: Statistics Canada, of Vancouver Island, though this trend is Business Register, December sector remained stable while employment 2016, 2017, 2018. grew. Employment growth in the sector was expected to slow moving forward due to largely at the primary and secondary levels declining housing demand as population and reflects increased hiring in the public growth slows. Employment school system to meet class size and British Columbia in Educational composition rules. Premier John Horgan Affordability in Victoria remains a concern Services gives a keynote pre- and significant price gaps between Victoria Going forward, enrollments are expected to sentation at the 2018 and the rest of Vancouver Island persist. State of the Island continue to grow at modest rates. However, BC Economic Summit in Victoria home prices are expected to is heavily dependent on China for international Nanaimo, BC. continue their decline moving forward 2018 students and ongoing and increased trade GROWING due to slowing population growth and the tensions could result in fewer students from current affordability issues.42 Housing prices China choosing to study in BC. outside the Capital region are expected to continue to grow modestly in response to 2016 2017 continued population growth. STABLE STABLE 40 University of Victoria. “Board approves budget framework for 2018/19.” Source: Statistics Canada, Labour Available here: https://www.uvic.ca/news/topics/2018+budget-framework- 41 BCREA Economics. Housing Forecast. June 2019. Force Survey, Custom Tabulation. 2018-19+news. 42 Ibid.
44 OCTOBER 2019 www.viea.ca STATE OF THE ISLAND ECONOMIC REPORT 45 Cost of Living and Affordability Wages
Housing―Benchmark Single Family Home Prices* Living Wages is the hourly wage IN JUNE 2019 (GROWTH COMPARED TO ONE YEAR AGO)** A living wage FOR SELECTED rate that is required for a household to meet COMMUNITIES ON its basic needs and provide a basic level of VANCOUVER ISLAND economic security. Living wages are calculated
CLAYOQUOT based on a family of four in which both parents
SOUND work full-time, one child is in full-time daycare 2017 $589,500 $ and one child is in after school care. Costs $518,200 20.11 used in the calculation include rental housing,
transportation, food, clothing, childcare, +3% medical expenses and miscellaneous expenses. +3% The calculation does not include allowances for retirement savings, debt servicing or the costs $559,300 COMOX . VALLEY of caring for an elderly, disabled or seriously ill Mt. Waddington 2018 family member.43 $16.59
+3% Campbell River The living wage on Vancouver Island ranges $434,900 +4% from $16.59 in Comox Valley to $20.50 in Victoria. Comparing the living wage with median wages on Vancouver Island suggests
Comox COWICHAN $471,400 that most workers on Vancouver Island earn at Valley VALLEY 2017 least a living wage. However, median wages Qualicum $ Parksville for food and beverage servers, janitors, couriers +2% 19.05
Port Alberni and aquaculture labourers are below the living $318,300 +9% Nanaimo wage in all communities. There were no data available on earnings on Vancouver Island to assess wage trends. In BC, Duncan NANAIMO 2017 average weekly earnings grew by 2.1% per $ year between 2015 and 2018.44 Inflation over the Victoria*** 17.55 45 $754,200 -1% same period was similar at 2.2%. The highest earnings growth was in the mining, real estate, management of companies and utilities sectors. The BC minimum wage increased to $12.65 per
ALBERNI hour on June 1, 2018 and to $13.85 per hour
VANCOUVER PORT 2017 on June 1, 2019.46 It is set to increase annually $ ISLAND 17.56 until it reaches $15.20 in 2021. As the minimum | wage continues to rise and tight labour market $514,400 + 4 % conditions persist, wage growth is expected on Vancouver Island. PARKSVILLE
Source: Vancouver Island Real Estate Board Monthly Statistical Package June 2019, Victoria Real Estate Board QUALICUM Statistics Package for Media June 2019. 2018 43 Living Wage Canada, Canadian Living Wage Framework. $ 44 Statistics Canada. Table 14-10-0204-01 Average weekly earnings by 17.02 industry, annual.
*The benchmark for single family home is a composite of one-storey homes (where the bedrooms, kitchen 45 Statistics Canada. Table 18-10-0005-01 Consumer Price Index, annual and dining rooms are on the same floor and the utility room and laundry room are generally located below average, not seasonally adjusted. ground) and two-storey single family homes (characterized by distribution of bedrooms on the upper 46 BC Government. “Minimum Wage”. Available here: https://www2.gov. floor(s) and a kitchen, living room and other day-to-day rooms on the main floor). This benchmark does bc.ca/gov/content/employment-business/employment-standards-advice/ not differentiate between attached and detached homes. (source: MLS Home Price Index Methodology – employment-standards/wages/minimum-wage. Benchmark Descriptions) VICTORIA
**In May 2019, the Altus Group, who manages the MLS HPI data for CREA and all participating boards 2018 including the VIREB and VREB, revised the historic benchmark single-family home prices on Vancouver Island. $ Wage Rates This process is part of their annual review in which adjustments to the definition of the benchmark home 20.50 are conducted to match market trends. As a result, the benchmark prices reported in previous versions of LOW MEDIAN HIGH the State of the Island report have been adjusted and the year-over-year change will not align with them. $ $ $ ***Victoria includes: Victoria, Victoria West, Oak Bay, Esquimalt, View Royal, Saanich East, Saanich West, Sooke, 13.85 27.32 64.00 Langford, Metchosin, Colwood, Highlands, North Saanich, Sidney, Central Saanich, ML Malahat and Area, GI Source: Living Wage Canada and Gulf Islands. Cowichan Valley Living Wage 2017. Source: Government of Canada, Job Bank Wage Report, May 2019.
46 OCTOBER 2019 www.viea.ca 47STATE OCTOBER OF THE 2019 ISLAND ECONOMIC REPORT www.viea.ca47 Cost of Living and Affordability Median Wage Rates FOR SELECTED OCCUPATIONS ON VANCOUVER ISLAND GOODS-PRODUCING SECTOR CONSTRUCTION MANAGERS $40.76
ELECTRICIANS $30.00 Homelessness A Social & Economic Crisis PLUMBERS $26.00
WELDERS $29.00 GUEST CONTRIBUTOR
Solveig Hanson - Graduate Candidate, Concordia University CARPENTERS $26.00 Every community on the Island, regardless of its size or location, is CONSTRUCTION LABOURERS $20.00 being negatively affected by homelessness. Homeless rates on the Island SILVICULTURE AND FORESTRY are predicted to continue increasing. Many communities are having to WORKERS $23.25 confront homeless populations that have risen dramatically in the last AQUACULTURE LABOURERS $16.50 few years. Closely tied to housing affordability and the opioid crisis, homelessness has become much more complex than ever before, making LOGGING AND FORESTRY LABOURERS $29.00 it difficult for support systems to keep up. Working to solve homelessness is the compassionate thing to do and reducing homelessness is critical to
HEAVY-DUTY EQUIPMENT preserving the vitality of our Island communities and economy. The cost MECHANICS $32.00 associated with increased homelessness is immense; and as homelessness rises, so does the cost of doing business. LOGGING MACHINE OPERATORS $33.54 In 2016, Greater Victoria counted a minimum number of 1,387 people experiencing homelessness – this number rose in 2018 to a minimum COURIERS, MESSENGERS, SERVICE-PRODUCING SECTOR of 1,525 homeless in Greater Victoria. In 2018, the minimum number of ETC. $13.85 individuals experiencing absolute homelessness in Nanaimo was 335, a SHIPPERS AND RECEIVERS significant increase from the minimum number of 174 counted in 2016. $18.03 In Port Alberni, the minimum number of homeless persons in 2016 was 73. In 2018, the minimum number of homeless in Port Alberni had grown SCHOOL TEACHERS $33.52 to 147. Between 2014 and 2017, the Cowichan Valley Regional District experienced an increased homeless population of over 50%. ‘Tent cities’ CASHIERS $13.85 in various Island communities in recent years have certainly increased the
JANITORS, BUILDING visibility and general awareness of the problem of homelessness, and it is SUPERINTENDENTS $13.85 easy to recognize that homelessness has continued to increase since data was last collected in early 2018. TRUCK DRIVERS $27.00 Rising housing costs have certainly been contributing to these new levels
OCCUPATIONAL THERAPISTS of homelessness. As the Campbell River and District Coalition to End $39.00 Homelessness (CRDCEH) commented, “with low vacancy rates, and high rental rates, it creates inequities for people experiencing homelessness LICENSED PRACTICAL NURSES $27.32 to secure safe and stable housing.” In addition, a new demographic of ‘economic homeless’ has emerged; this demographic is made up of young FOOD SERVICE MANAGERS $21.63 people who are unable to make rent, despite often working several low- paying jobs. As a result, Island communities that, for many years, have ACCOMMODATION MANAGERS had a relatively consistent homeless population are now overwhelmed $24.00 with new challenges while trying to respond to a larger and more diverse CHEFS $19.00 homeless population. Further complicating our ability to respond is the fact that support services surrounding homelessness have been targeted OUTDOOR SPORT AND RECREATIONAL GUIDES $18.00 toward a demographic that is no longer entirely accurate.
FOOD AND BEVERAGE SERVERS $21.63 If neglected, homelessness has an enormous impact on our Island econ- omy. Kim Smythe from Nanaimo Chamber of Commerce comments, Source: Government of Canada, Job Bank Wage Report for Vancouver Island and Coast, May 2019. Available “storefront businesses have three things happening: a loss of business here: http://www.jobbank.gc.ca/.
48 OCTOBER 2019 www.viea.ca STATE OF THE ISLAND ECONOMIC REPORT 49 due to homeless individuals invading their space, loss of product off their shelves, and increased costsIn ofClosing... staffing and security.” In addition, rising levels of homelessness lead to significant costs to taxpayers due to increased IN CLOSING... use of emergency services. Large homeless populations also negatively impact the reputations and safety of our communities. There is a growing concern that residents and tourists alike will avoid spending time in our We hope that you have found the information of downtowns because they no longer feel safe. As Catherine Holt of the Vic- this report valuable and informative and that you toria Chamber of Commerce explains, “[our] tourism industry is absolutely will take advantage of the benefit of access to the based on Victoria having a reputation as being a clean and safe city to visit. data behind the data available to you at viea.ca. [With tourism] as the foundation of our economy, that is what we have to protect. It is the same issue across Vancouver Island. Business owners are The intent of this document has always been to very concerned about the rising intensity of [the homelessness crisis] and provide an overall and unbiased snapshot of the the economic cost is going to be significant if we bruise our reputation.” Island economy. With the professional guid- ance of MNP we are able to provide data that is In order to tackle the many obstacles associated with rising homelessness, meaningful and paints an accurate local picture the federal and provincial governments—including BC Housing—are that we continue to build upon. We take great supporting community initiatives through funding and staff who are care along the way to ensure that where opinions working on the ground to actuate coherent strategies. The approaches have been expressed, they are properly attributed. adopted by the federal and provincial governments have aided in the We continue to build upon previous data and sharing of best practices between communities who, until now, have largely with a number of years behind us we are able to been dealing with homelessness in isolation. Out of necessity, regional and get a real sense of what is transpiring in our own municipal governments have become engaged with community members backyard. We are extremely proud of this work and stakeholders, as well as the federal and provincial governments in and believe it is a unique report in all of Canada. order to work towards solutions. As always, we ask that if you feel we are missing The key to solving the homelessness crisis is collaboration, both within and a sector or key area, please let us know; especially between communities. Catherine Holt advocates for increased long-term if you have a reliable source of repeatable local solutions such as affordable non-market housing for working families and data we can access. individuals, as well as therapeutic facilities with year or two-year-long The Economic Summit is hosted every year by the programs to treat mental illness and addiction. Vancouver Island Economic Alliance to provide a The homelessness coalitions that have been established in various Island venue to explore and share ideas and to stimulate communities provide forums so that multiple stakeholders can come conversations that we can build upon. Having all together to create long-term action plans that tackle issues including sectors and industries, government and educa- affordable housing, opioid use, mental illness, and discrimination. As the tion, including students, present is what makes it CRDCEH explains, homelessness coalitions are “in the position to work a truly unique and innovative event. The State of at the micro, mezzo, and macro levels to support solutions for people the Island Economic Report is designed to supple- experiencing homelessness, have dialogue [in our communities,] and look ment these meaningful discussions with reliable to systematic policy change.” data, and in many cases, outcomes that result from discussions being had at the Summit. Every Kim Smythe asserts, “This is a problem that is not going to go away year is an opportunity to build upon these discus- without aggressive implementation of homelessness action plans.” And sions and identify new areas of opportunity. For as Signy Madden (United Way, Central & Northern Vancouver Island) instance, in 2018, VIEA was successful in having puts it, “There are no quick fixes… we can’t push the problem from one Vancouver Island designated as a Foreign Trade community or neighbourhood to another. The only way that we’re going to Zone by the Government of Canada—FTZVI—an address homelessness and help our communities be healthier, is if we do it idea that grew from a conversation at a previous together. The business community has a voice in creating thoughtful and Summit. logical solutions. I think business people have to say to their Chamber: ‘We want to be part of the solution.’” I firmly believe that we are at a tipping point and in the coming years we are going to see significant Left alone, this issue will continue to cost taxpayers, businesses, and entire investment and economic growth on the Island as communities. Confronting the current state of homelessness on Vancouver a result of this designation. I look forward to the Island requires immediate and significant human power and funding. continued development and diversification of our Collectively addressing homelessness could offset the predicted increasing Island economy and to being able to read about economic costs of homelessness continuing to escalate. theses successes in future Economic Reports. We will build this together as we leverage *Statistics are drawn from the Point in Time (PiT) Counts produced by communities across Vancouver Island. present advantages and remain alert to explore PiT Counts assess the minimum number of individuals experiencing homelessness in a community. PiT Counts other opportunities that will emerge from our are generally conducted bi-annually in order to measure trends in homelessness over time so that communities are better able to create and implement solutions. However, PiT Counts underrepresent the real number interactions. of homeless individuals and are not able to accurately measure those who have unstable housing or who periodically experience homelessness. —MARK SMITH, Chair VIEA
50 OCTOBER 2019 www.viea.ca STATE OF THE ISLAND ECONOMIC REPORT 51 THANKS
to the generosity of our supporters and the expertise of researchers and staff at MNP, VIEA is proud to present the 5th edition of this report, an annual reading of the state of the Island economy and the key issues, trends and events that shape the way we live, work and do business on Vancouver Island.
The next edition of the report is planned to be released at VIEA’S 2020 State of the Island Economic Summit...
viea.ca OCT 28 | 29 2020
If you would like to explore opportunties for strong, sustainable economic growth by engaging with an ever-expanding commu- nity of forward thinkers, policy makers and risk takers across sectors and all industries on Vancouver Island, then join VIEA.
Visit viea.ca to find out what we do and how you can get involved.
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