REGIONAL CHECK-UP 2019

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1 bccheckup.com REGIONAL CHECK-UP 2019 CARIBOO KOOTENAY NORTHEAST BC NORTHWEST BC SOUTHWEST BC THOMPSON- OKANAGAN VAN ISLAND /COAST Check up on your region s economy

2 Due to gains in 368, , ,400 After impressive gains in 2016 and 2017, job creation slowed across BC largely due to labour shortages. Success of the LNG Canada project will play a key role in attracting and moving forward new investment. Workers with at least some post-secondary education enjoy lower rates of unemployment and higher labour force participation. Over the past five years, BC s educational attainment has improved considerably ,245 business insolvencies -0.4ppt -0.4ppt 4.7% 6.6% Growth in housing market, exports, and population continued to encourage entrepreneurs to establish across BC. The softening of the housing market was probably the reason business investment softened in BC s consumer insolvency rate has stabilized over the past few years as economic prosperity meant more people were better off. 1.4% to 4.9 million

3 CARIBOO 0.6% to 80,600 jobs 0.2% to $10.2 billion projects, such as oil & gas and mining, make up the majority of the total project value. 11,800 11,500 10,300 The region lost 500 jobs in 2018, due to sizeable losses in service industries. : +7.7% : -3.4% Cariboo's labour force saw considerable improvement in educational attainment. Some individuals upgraded their skills while those joining the labour force already possessed these credentials. Many workers without post-secondary education also left the labour force. 1 business insolvency 2,100 WORKERS LEFT THE LABOUR FORCE ppt -3.0ppt Cariboo's business climate held steady. Business insolvencies reached a five-year low. Consumer insolvency rate reached its lowest point in over a decade, but remains well above the provincial average. 5.6% 6.2% 0.8% to 166,180

4 KOOTENAY 1.0% to 71,200 jobs 5.5% to $8.6 billion 10,200 9,300 8,300 After gains made in 2017, the labour market shrank by 700 jobs, due entirely to losses in the goods sector. : -3.1% : 0% Mining and commercial projects, such as accommodation and recreation, make up the majority of the total project value. Many individuals without post-secondary education left the labour force, while a large share of new workers had post-secondary credentials, especially at the bachelor s level. This pushed the region s educational attainment rate to the third highest in the province, overtaking Thompson-Okanagan. 1 business insolvency 2,400 WORKERS LEFT THE LABOUR FORCE ppt -7.4ppt 5.3% 5.7% New businesses in rural areas and in municipalities such as Castlegar, Radium Hotsprings, and Invermere contributed to the business incorporations growth. The region s residents have been relatively successful in managing their debt over the past few years. 1.0% to 159,887

5 NORTHEAST BC 2.9% to 39,600 jobs 1.4% to $38.6 billion 6,000 5,000 3,700 After two years of decline, the region's labour market expanded by 1,100 jobs. : -3.2% : +5.4% The Site C project and other industrial projects, such as oil & gas and mining, make up the majority of the total project value. Northeast BC's labour force is steadily becoming more educated. This is good news for the region, as workers with more education tend to have better longer term job prospects. 3,700 2 business insolvencies JOB CREATION 1,100 LABOUR FORCE 1, ppt -3.7ppt 5.7% 5.6% Business incorporations have declined over the past five years, as economic challenges drove away residents and affected business prospects. While the rate of proposals stayed the same in 2018, the bankruptcy rate declined a little. The region s consumer insolvency rate remains the highest in BC. 0.2% to 71,817

6 NORTHWEST KOOTENAY BC 1.4% 1.0% 43,100 71,200 to to jobs jobs.04% 5.5% to to $194 $8.6 billion Biggest Industry by by Employment 5,600 10,200 4,900 9,300 4,200 8,300 Many After of gains the new made jobs in were 2017, part-time the labour positions market generated shrank by 700 in the jobs, service due sector. entirely to losses in the goods sector. : -4.4% -3.1% : +4.2% 0% Mining and projects, commercial such as projects, mining and such oil as & gas, as accommodation well as infrastructure and projects, recreation, make make up the up the majority of of the the total total project value. value. Shortages Many individuals of low-skilled without workers post-secondary drew many education individuals left with the high labour school force, or while some a post-secondary large share of new education workers into had the post-secondary labour force, contributing credentials, to especially a stagnation at the in educational bachelor s level. attainment. This pushed the region s educational attainment rate to the third highest in the province, overtaking Thompson-Okanagan. # 2,400 OF NEW WORKERS LEFT > # THE OF NEW LABOUR JOBS FORCE +0.1ppt -2.0ppt -4.2ppt -7.4ppt 5.3% 5.9% 4.7% 5.7% business insolvency new New businesses 95 new in rural areas and businesses in municipalities businesses such as Castlegar, Radium Hotsprings, and Invermere contributed to the Consistently low levels of business business insolvency incorporations since growth speaks to the resilience of existing businesses. 143 business insolvencies 1 business insolvency The region s residents have been relatively successful in managing their debt over the past few years. Residents of Northwest BC consistently have the lowest consumer rates in the province over the past five years. * YOUTH * YOUTH = Ages = Ages between between 15 and and % 1.0% to to 98, ,887

7 SOUTHWEST BC 9.1% to $76.1 billion and mixed use projects account for the majority of the total projects value. 230, , ,600 Gains in the the goods sector was significantly greater than gains in the service sector. : +6.3% : +0.2% The educational attainment level of Southwest BC's labour force has steadily improved over the past decade, and remains the highest in BC. The slight dip between 2017 and 2018 was likely due to statistical variation. 67 business insolvencies JOB CREATION 20,900 LABOUR FORCE 17,200 36, ppt +0.2ppt 4.3% 6.7% Economic diversification, population growth, and active housing market in Southwest BC created a positive and sustainable business environment for entrepreneurs. Since the 2008 recession, Southwest BC s consumer insolvency rate has been on a declining trend and has stabilized over the past few years. 1.5% to 3 million

8 THOMPSON-OKANAGAN KOOTENAY 1.7% 1.0% 255,200 71,200 to to jobs 4.0% 5.5% to to $20.6 $8.6 billion Biggest Industry by by Employment 43,600 10,200 41,300 9,300 27,300 8,300 After After impressive gains made job gains 2017, in the 2017, labour the region market lost shrank 4,400 by jobs 700 in jobs, due Job losses entirely in the to goods losses sector in the goods were sector. entirely : responsible -3.1% : for this 0% decrease. : -8.4% : +0.4% Mining and and commercial commercial projects, such projects, as such as accommodation and and recreation, make up up the the majority of of the the total project value. value. Over Many the individuals past five years, without the post-secondary region s educational education attainment left the level labour has force, generally while trended a large share upwards, of new as the workers region s had economy post-secondary expanded and credentials, became increasingly especially at diverse. the bachelor s level. This pushed the region s educational attainment rate to the third highest in the province, overtaking Thompson-Okanagan. 7,000 2,400 WORKERS LEFT LEFT THE THE LABOUR FORCE 151 3, business insolvencies insolvency -1.0ppt -2.0ppt -0.5ppt -7.4ppt 6.1% 5.3% 7.1% 5.7% The New number businesses of business rural areas and incorporations municipalities in the such region as increased Castlegar, by Radium 2.6% in Hotsprings, 2018, indicating and Invermere ongoing contributed confidence to of the entrepreneurs business incorporations the region s growth. economy. Increases The region s in consumer residents insolvency have been was relatively due entirely successful to an increase managing consumer their debt proposals. over the past few years. * YOUTH * YOUTH = Ages = Ages between between 15 and and % 1.0% to to 588, ,887

9 VANCOUVER ISLAND/COAST 2.6% to 396,600 jobs 3.3% to $60.6 billion and mixed use projects account for the majority of the total projects value. 64,700 63,500 36,100 Population growth, increases in housing prices, and tourism activity, contributed to gains in service sector. : -6.1% : +4.5% The region s remarkable job growth and economic diversification over the past five years attracted workers with higher education. This is a record high for the region. 15 business insolvencies JOB CREATION 10,000 LABOUR FORCE 9,000 4, ppt UNCHANGED 4.7% 6.6% Difficulty in labour recruitment and retention could be a contributing factor to the 2.2% dip in business incorporations. Consumer insolvency rate increased for the first time in a decade. As the economy is stable, this increase could be the result of personal circumstances, such as debt over extension. 1.4% to 857,144

10 REGIONAL CHECK-UP LNG Canada and other resource projects will encourage economic activity in the region. CONSTRUCTION ACTIVITY WILL REMAIN STRONG The region will keep its status as BC's powerhouse due to the diversified economy. Economic activity is expected to stabilize with a forecasted GDP growth rate of 1.4% The region s technology and tourism industries will continue to drive economic growth.

11 bccheckup.com Regional Check-Up 2019 As leaders in analyzing and validating information, CPAs are often called upon to provide independent, fair, and objective information to assist in decisionmaking. It is our hope that the report will make a positive public policy contribution to the province by stimulating debate and discussion about how to make BC a better place in which to work, invest, and live. Media Contact Vivian Tse, Public Affairs Manager vtse@bccpa.ca The report is prepared by Chisholm Consulting, in association with Gold Island Consulting. Opinions expressed in the report do not necessarily reflect those of individual chartered professional accountants. Regional Check-Up, Chartered Professional Accountants of British Columbia