For lease retail locations on Robson Street in Vancouver, on Oct. 9, 2020.Rafal Gerszak/The Globe and Mail
For years, rural communities in British Columbia hollowed out while the urban centres in the southwest corner of the province – especially Metro Vancouver – generated most of the province’s economic growth. Schools in rural resource towns closed for lack of students, because the opportunities for jobs were flowing to the city.
Now COVID-19 has turned that upside down.
The arrival of the pandemic early in the year led to massive job losses in every region of the province. But B.C.'s resource industries – forestry, mining, oil and gas – have since rebounded. The fortunes of Metro Vancouver have not. And for many businesses and workers in the province’s most densely populated region, there is stagnation, not recovery, on the horizon.
In the provincial election campaign now under way, voters are being asked to decide who can best manage the pandemic response. What they want to see from the parties will depend on where they live, because the path to recovery is different.
PATH FOR RECOVERY LOOKS DIFFERENT
Construction has halted outside Vancouver International Airport in Richmond, B.C., seen here on Oct. 9, 2020.Rafal Gerszak/The Globe and Mail
In the middle of the sprawling complex of Vancouver International Airport, a major expansion project has been idled halfway through construction. It’s a visible sign of the changes COVID-19 has brought. YVR is at the heart of an air-transportation sector that was, until the start of the year, one of the engines of B.C.'s growth. In a normal year, it moves more than $10-billion through the economy, in both passengers and cargo. It is also a bellwether for the province’s large hospitality sector, which relies on tourism and business travel. When the travel bans and lockdown measures began in March, the terminals emptied. In April, traffic dropped off by 97 per cent compared with the same month in 2019. The airport authority does not expect to see a full recovery for years.
But in Quesnel, the forestry-dependent city in B.C.'s Interior, the economy is enjoying a boom. Not so long ago, the city of 10,000 was at the heart of a collapse in the forest industry. Today it is facing a rental-housing crisis as the population swells – a trend that has accelerated since the arrival of the pandemic in B.C. as people chase opportunities that now can be found in rural B.C. Employers are struggling to find enough workers – line cooks, nurses, hotel managers. Forestry mills are hiring again, with more than two dozen full-time jobs currently posted at West Fraser’s local operations. Homes are being snapped up at more than the asking price and contractors are running flat out to meet demand for renovations.
These two very different realities are being felt around the province. A recent report from the Business Council of B.C. found proportionally, Metro Vancouver has been harder hit by the virus-driven recession than other parts of the province.
“By region, Metro Vancouver experienced B.C.'s steepest job losses because of its industrial and employment mix. Consumer-facing industries have been hammered and have an over-sized presence in the Lower Mainland,” the Oct. 1 report found. Statistics Canada confirmed that trend on Friday, with new data showing employment in Metro Vancouver is 10.2 per cent below February levels, while outside of the metropolitan areas, employment in B.C. has increased by 2.6 per cent for the same period.
Tamara Vrooman is president and CEO of YVR. She made the decision to put construction of the new parkade on hold, leaving the airport with the equivalent of its front driveway ripped up. It had been launched in a period of growth – a record number of passengers moved through the airport in 2019. This year, she expects revenues will be down by 80 per cent over last year.
“The biggest challenge that we have is how to keep the sector functioning, so that we can maintain our staff and maintain our core operations, while we collectively deal with the pandemic until it’s safe to reopen and welcome that demand again,” she said. She is not speaking only of the airport and its major airlines, but of the many small companies – tourism operators and freight companies – that rely on this transport hub. The provincial government will have to play a role, she said, in building a bridge for this sector to make it to the other side.
A construction site at the parkade at Vancouver International Airport in Richmond, B.C., on Oct. 9, 2020.Rafal Gerszak/The Globe and Mail
Outside of those urban areas, the resource sectors have lifted B.C.'s communities back up. “Manufacturing, forestry, mining, oil and gas, and agriculture have regained all of the jobs lost since February – and then some. These industries are over-represented in non-metropolitan regions of B.C.,” the business council found.
Quesnel Mayor Bob Simpson is welcoming new residents who have left Metro Vancouver for the jobs, open spaces, and relatively cheap real estate. He said COVID-19 has accelerated a shift that started three years ago.
“We’re seeing some fundamental shifts in how people are living – they are realizing the big smoke isn’t where they want to be,” he said. But success brings its own challenges. “Our two pinch points as a community are, we don’t have the housing stock to accommodate the people who are moving in, and we don’t have the human resources to fill all the jobs.”
PROPOSED SOLUTIONS
British Columbia’s two main parties, the Liberals and the NDP, are offering different solutions to economic recovery, but both focus on provincewide solutions.
The Liberal platform includes a plan to eliminate the provincial sales tax for a year, with a reduced rate in the second year. That pledge would cost $10.8-billion in the first two years. They have also promised to permanently eliminate the 2-per-cent small business income tax, and to offer a loan-guarantee program for the province’s tourism and hospitality businesses.
Just days before the election was called, the NDP government announced a $2-billion pandemic recovery plan, which includes 55 programs – a mix of grants, training programs, and tax cuts. Business leaders have warned that the money is not yet flowing, and could come too late for some.
In the campaign, the NDP has focused on promises that would help people who work in the hard-hit service industry, including a cash payout of up to $1,000 for eligible British Columbians and a rent supplement. They are also offering more job training to help workers make the transition to in-demand jobs. Forecasters project that British Columbia’s economy, over all, will begin to recover in 2021. But the business council’s economist, Ken Peacock, said this won’t be spread out evenly and Metro Vancouver will be slower to recover.
“We fully expect more business failures here in the fall months and 2021,” he said. “They’ve been propped up by government funding, but as that winds up, and if we’re in a half-open situation in business and restaurants, there are going to be more bankruptcies," he said. "There’s so much lost revenue, and so many smaller businesses hurt. And that is going to weigh on this employment recovery process.”
A for lease retail location on Robson Street in Vancouver, on Oct. 9, 2020.Rafal Gerszak/The Globe and Mail
Metro Vancouver shed 150,000 jobs this year. Earlier this month, the Greater Vancouver Board of Trade released the results of a survey showing its members fear the coming year will bring more bad news. One in four businesses do not expect to survive another year under the current economic conditions.
In this election, the board is asking the parties to commit to a series of changes that could soften the blow. They want more action on the availability and affordability of housing, more skills-training opportunities and faster access to programs that would help small and medium-sized businesses stay afloat.
ADVERSITY PROMPTS SEARCH FOR RESILIENCE
The town of Port McNeill, on the north end of Vancouver Island, bills itself as British Columbia’s forestry capital. It was only just starting to recover from a devastating strike that shut down the region’s forest operations for almost eight months, when the pandemic arrived. Tourism has suffered but, on the strength of a rebounding forest sector, new businesses are opening up. Mixed with that confidence, however, is some caution.
The experience of the pandemic has shaken things up, said Port McNeill Mayor Gaby Wickstrom. She wants her community to prepare for the future by pursuing a more diverse economy.
“I would like to see less forestry-reliant businesses. We could have anything, a call centre, a Kicking Horse coffee company," she said. “COVID smashed everybody’s boxes, and that allows people to look at our community in a new way, to be open to new way of doing things.”
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Justine Hunter