Diversity and Momentum

The southern Interior continues to attract people, companies and economic activity from a variety of sources

Combining well-connected cities and a resource-based hinterland, the Thompson-Okanagan has one of the most balanced and diverse economies in B.C. As the Chartered Professional Accountants of B.C. put it in their Regional Check-Up 2019, “Historically, Thompson-Okanagan’s economy has been based on forestry, mining, and agriculture. While these industries remain important, they are now part of a highly diverse economy dominated by service industries that have expanded with the region’s population and tourism growth.”

The construction of the four-lane Coquihalla and Okanagan Connector freeways, along with improved air travel links, in the 1980s and 1990s greatly improved the region’s accessibility and trade with surrounding urban centres Vancouver, Calgary, Edmonton and Seattle. This sparked a long-term boom in tourism, population growth and industrial development, as incoming holidaymakers, migrants and companies took advantage of the region’s relatively affordable real estate, moderate cost of living, picturesque orchards and wine country and reliably warm, sunny summer weather. Provincial government statistics show that the value of building permits issued for both residential and non-residential projects in this region has tripled since 1995.

Cities Rising

That secular trend continues to this day—on a relative basis, the Thompson-0Okanagan enjoyed the strongest employment growth of all B.C. development regions in 2019, with job rolls rising 6.9 percent, Central 1 Credit Union noted in its year-end labour market report.

The transformation is especially evident in the region’s largest urban centre, Kelowna. The lakefront city was named Western Canada’s best place for real estate investment in 2020 by Western Investor magazine. The publication noted how a dozen highrise condominium towers in various stages of construction—up to 36 storeys in the case of One Water Street—are transforming the city’s once-modest skyline. Eighteen rental buildings comprising nearly 1,600 units are under construction, too.

More than 300,000 square feet of office space is also on the way, including 80,000 square feet of class-A space downtown in the Bernard Block. Another notable addition is the Innovation Centre, a high-technology incubator. Rogers Communications has leased 32,000 square feet of another building under construction to house a customer service centre set to employ 350 when it opens this summer. On the industrial side, almost 180,000 square feet of space is in development in response to a 0.7-percent vacancy rate.

Multiple Economic Drivers

Serving close to two million passengers in 2019, Kelowna International Airport is now the 10th-busiest in Canada. The nine carriers flying out of YLW offer direct service to 10 Canadian cities as well as Seattle, Las Vegas, Phoenix and various vacation spots in Mexico.

According to Brea Lake, recently appointed CEO of Accelerate Okanagan, technology is now a $1.7-billion industry in the region. Long a development centre for Disney Online Studios, the Okanagan Valley boasts nearly 700 tech companies employing more than 12,000 workers.

Kamloops, the home of Thompson Rivers University, has become one of the fastest-growing cities in the region. New housing, commercial and industrial development is fuelling an economic boom. A strong economic development program and supportive local government is creating opportunities for entrepreneurs and new businesses.

In the Shuswap region, Salmon Arm continues to see tremendous growth, and the new Salmon Arm Innovation Centre is driving expansion in the downtown core and encouraging entrepreurship.

Even outside the cities, the southern Interior of B.C. has a diverse economy featuring fruit growing and processing, winemaking, ranching, mining (mostly copper), manufacturing (machinery, plastics, boats, aerospace), hydroelectric power generation and a wide variety of tourism-oriented businesses (ski resorts, fishing lodges, wineries, golf courses).

As in other parts of the province, the once-dominant forest industry is having to adapt to fickle demand for lumber and a reduced timber supply due to beetle and forest fire damage. There are success stories in the sector, however. Structurlam Mass Timber Corp. of Penticton expanded its workforce to 290 last year with the addition of 70 positions at its four B.C. plants. The company is a leading manufacturer of cross-laminated timber and other engineered wood products that are increasingly used by builders as a low-carbon replacement for structural steel.

More than any other region in B.C., the Thompson-Okanagan is likely to see an economic boost from construction of the Trans Mountain Expansion Project. At the beginning of this year, there were an estimated 4,200 workers engaged on the project, which will roughly triple the capacity of the existing Trans Mountain pipeline bringing crude oil from Edmonton to a tanker terminal in Burnaby. In the Thompson-Okanagan, the route traverses the North Thompson, Nicola and Coldwater valleys, passing through Kamloops, among other communities. Estimates of the project’s expenditure run from $7.4 billion to $9.3 billion before it comes into service in 2022.