Construction, renovation, innovation, solidification - these are the themes that typified the local economy in 2018, setting the region up for a prosperous year ahead.
Forecasts are not always so rosy. It was only 10 years ago that the entire globe was gasping for economic air when the tumble of the U.S. banking industry and housing market caused a domino effect across the entirety of the financial sector. The effect was the worst depression on world economics since the Great one of the 1930s. Prince George suffered along with the rest of the province, nation, continent.
Three of the region's CEOs in closest touch with the industry and trades portfolios have a much more bullish outlook on current times.
Joel McKay of the Northern Development Initiative Trust, Todd Corrigall of the Prince George Chamber of Commerce and Scott Bone of the Northern Regional Construction Association took turns outlining their views of the 2018 that was and the 2019 they see ahead.
"The economy in B.C. remained strong through 2018, and although much of the growth we've seen has been centered in the southern regions of the province, some significant infrastructure projects such as Site C and AltaGas' propane export terminal in Prince Rupert spurred activity in the north," said McKay.
Bone said it was a plentiful year in all three construction sub-sectors: industrial, commercial, and institutional.
"The opportunities have come thick and fast, as have the challenges, all largely due to a complex political and economic environment shaped by local and international forces," said Bone. "With the recent announcement of LNG Canada to spend $46 billion dollars, all eyes will be on northern B.C. to capture the many procurement and employment opportunities this project has to offer."
Corrigall said the money wasn't just being handed over in the form of easy and plentiful jobs. Advocacy was required, because hurdles are in place that will only be removed by local effort.
"With historic investment from the LNG industry in B.C., we will see increased traffic throughout our region, on infrastructure which needs to be properly funded," he said, as one example. "The provincial government eliminated tolls for Lower Mainland commuters, ensuring that all of B.C. is now saddled with the bill. We will be advocating for increased road improvements to northern routes."
The three agreed that economic forecasts looked promising, but their jobs required of them to be realistic about the inevitable challenges. Problems and opportunities arrive together.
"One of the consistent themes we saw across the north in 2018 was the shortage of workers needed across an array of industries, echoing the relatively low unemployment rate for the region and the demographic shift that's underway with Baby Boomer retirements," McKay pointed out. "Evidence of a strong economy was certainly felt in Prince George in 2018, where building permit values hit record highs, and, on the qualitative side, we heard more and more stories of new people moving to the city from the south thanks to Prince George's relative affordability and career opportunities.
"Still," McKay cautioned, "not all things were positive in 2018. Summer wildfires, for the second year in a row, negatively impacted the economy, most notably in the forestry and tourism sectors. As well, the long-expected impacts of the Mountain Pine Beetle epidemic are being felt in communities throughout the north as forestry companies struggle to manage a reduction in fibre supply. Forest-dependent communities (are caught in a transition period) to a new reality of lower fibre supply, forcing them to seek new economic development opportunities while working to ensure important services are delivered to residents."
Corrigall said that, "from a business perspective, we saw some new challenges come forward in 2018. Whether it be new taxes or fees, businesses have been saddled with changes at the provincial level. A great deal of (Chamber of Commerce) focus was put towards the budget and what those impacts would look like. While some have seen the direct implications of those changes, the brunt of that will be felt in 2019. Whether that be double dipping with MSP and the Employers Health Tax (EHT), or the speculation tax."
Bone echoed McKay's observation about the labour pinch being felt by industry and trades companies of all size, and he echoed Corrigall's concerns about the state of provincial policies.
"Emerging issues are plentiful -- steel and aluminum tariffs, small business taxes, Community Benefits Agreements, deteriorating public procurement practices, and lack of prompt payment legislation in B.C. to name a few - but according to employers, the number one issue is still the overarching shortage of skilled workers," Bone said. "In a 2018 industry survey 68 per cent of employers - regardless of labour affiliation -- say finding skilled workers is their biggest challenge. In addition to the hunt for tradespeople, they can't find enough trained and experienced managers to replace the old guard that's retiring.
"Interestingly," Bone added, "in the same survey, many of B.C.'s skilled tradespeople identified an 'old school mentality' as a problem they experience, with this theme running through their concerns about diversity and the adoption of technology."
There are counterpoints, of course. The labour shortage, especially among the skilled trades professions, is a result of a lot of work going on.
"Looking forward, the positive investment decision for LNG Canada will support growth in the coming years across the north," McKay predicted. "Things are looking up for the mining sector as well, with stronger steel-making coal prices supporting reopened mines in the northeast and stronger commodity prices driving up interest in exploration activities.
"A number of capital projects are also slated to occur in the north in the coming years, including new hospitals, schools, highway projects and an expansion at the Port of Prince Rupert," McKay continued. "These activities coupled with a retiring workers will make workforce attraction and retention initiatives a top priority for industry, small business and the public sector in the coming years."
Unlocking these problems is a problem, but a good problem to have, each of these CEOs implied, because the issues are largely in response to economic activity not the lack thereof.
Diversification is certainly a key element to wrestle with, to ensure resource-focused communities have more employment sustainability than mills and mines.
Government policies are another matter. Some of those present bright opportunities but others look more like storm clouds in the eyes of northern proponents.
That will require firm, evidence-based input from this region's economic voices, said Corrigall.
"In 2018 we were able to create greater connections with our elected officials, and those representing other political parties and regions. We arranged tours and visits with members to discuss current and emerging issues, aligning their needs with those in power. We look forward to enhancing these opportunities in 2019," the Chamber boss said. "Finally, we anticipate 2019 will be a strong year for advocacy on behalf of our members. We know there will be one election in 2019, but there could be a second. It is important for our issues to be communicated to those running to serve our communities. We achieve this through direct advocacy work, and aligning ourselves and our members with the BC Chamber of Commerce and Canadian Chamber of Commerce."
"Most importantly, we'll continue to work hard to forge partnerships throughout the north that help strengthen our region as whole, acting as a catalyst for development opportunities," said McKay. "For our part, the trust will continue to focus on ensuring we're responsibly stewarding our capital base to ensure there's new funding available each year to support crucial community initiatives that strengthen local area economies and our region as a whole. That means our programs must continue to be responsive, accessible and inclusive so that communities, business and not-for-profit groups - no matter their size - can look to us for assistance with their economic development initiatives. We'll continue to be focussed on assisting to address the digital divide in the north through the delivery of the Connecting BC high speed internet access program, as well as providing innovation funding for our core industries through our Northern Industries Innovation Fund. On the community development side, our infrastructure, capacity building and internship programs will be mainstays that provide the funding and people needed in small communities to get projects done and fill succession gaps."
Bone said "There are many bright spots ahead: important projects such as LNG Canada's recent announcement, investments in social housing, local government infrastructure, and green building, and a booming provincial economy projecting a $1.35-billion surplus."
The construction association, he added, will be busy internally to put the building projects of the region, and the builders who turn them into reality, are actively served.
"In 2019 NRCA is expanding its suite of health and well-being services like the Employee Benefits Trust to include Employee Retirement Savings Program and a Retirement Benefit Plan for the construction workforce. Co-funded by the Ministry of Advanced Education, Skills & Training, NRCA is an industry partner including LNG Canada, the Industry Training Authority, and WorkSafe BC on a new project to improve retention of women in B.C.'s construction trades. The details of this new Construction Workforce Equity Project are coming in the new year. A highlight will be the availability of human resources advisors to employers looking for assistance in managing diversity."
"I'm a firm believer," said McKay, hitting on a theme all three CEOs radiated, "that the answers we seek in our ongoing drive to strengthen the economy in northern B.C. are here in Northern B.C. - we must only work together to find them and make them a reality."
