BCBusiness in partnership with BCEDA

Small-Town Diversification

Even without a big population base, the Kootenay region is seeing a flowering of non-traditional industries

Golf at the Fairmont Hotsprings ResortDESTINATION BC/KARI MEDIGLying along B.C.’s eastern border, the Kootenay region is a diverse economy that includes mining, refining, forestry, tourism and the tech sectors. The Kootenays boast the province’s lowest unemployment rate of 3.1%. Economists for the Chartered Professional Accountants of B.C. noted in their Regional Check-Up 2018: “The number of jobs in the Kootenays increased by 6.7% in 2017, boosting annual employment to 71,900 – the highest level in four years.” At the same time, residential building permit dollar volumes increased 25.7 percent, to $243.9 million.

Kootenay statsThis is good news as the entire region is seeing increased development and investment, including the $900-million expansion of the Red Mountain Ski Resort in Rossland which includes luxury boutique hotel The Josie and the Nowhere Special Hostel. 

The region also boasts two regional hospitals in Cranbrook and Trail with investments of $72 million on tap going toward upgrades and expansions.

Diversified mining company Teck Resources Ltd. is far and away the leading private-sector employer and economic bellwether in the Kootenays, operating metallurgical coal mines around Sparwood in the East Kootenay and a smelter for lead and zinc processing in the West Kootenay city of Trail. The largest single capital project under development in the region is Teck’s $1.6-billion expansion of its Baldy Ridge open-pit mine, which is meant to supply 6.8 million tonnes of coal per year to Asian steel mills.

The forest industry has benefited from strong housing construction activity in the U.S., which has made it easier for producers to pass the cost of American softwood lumber tariffs on to consumers. At the same time, the Kootenays were less affected by the mountain pine beetle infestation than other parts of the Interior, given that lodgepole pine makes up only a small portion of the region’s tree species. As a result, reductions in the annual allowable cut have been modest.

NEW INDUSTRIES RISING

Despite the absence of large cities – the biggest is Cranbrook, population 20,000 – the Kootenay region is seeing diversification and the flowering of knowledge-based industries. Foreign investors recognized that in 2017 with acquisitions priced in the hundreds of millions of dollars. Italian beverage multinational Lavazza bought an 80-percent stake in Kicking Horse Coffee of Invermere in a deal that valued the whole company at $215 million. (The remaining 20-percent share was retained by co-founder and CEO Elana Rosenfeld.)

In barely two decades, Kicking Horse had become the largest organic and fair-trade coffee roaster in Canada; with the help of new ownership, it’s now looking at expanding farther south of the border and even into European markets.

Although such takeovers shift corporate control out of the region, the capital they provide can also help seed the entrepreneurial ecosystem locally. For example, after selling their Kelownabased cloud services firm, RackForce Networks Inc., in 2015, Bryan Fry and Tim Dufour teamed up with forest industry entrepreneur Brian Fehr of Prince George to create the Columbia Lake Technology Center (CLTC) in Canal Flats, in the East Kootenay. On the site of a shuttered sawmill, more than 70 high-tech workers are now engaged in things like making parts for automated sawmills and building compact, prefabricated data centres that store information for technologies such as artificial intelligence and virtual reality. The CLTC is in turn stimulating new residential and commercial development in a community that until recently feared for its survival. “We see Canal Flats as a model for B.C. and, indeed, rural areas across the country,” chief executive Lorri Fehr told BCBusiness. “Because so many of our communities have been dependent on a single resource, and we want to switch that out.”

This is an optimistic, forward-looking area, enthuses Don Freschi, co-founder of Firebird Technologies and executive director of the Kootenay Association of Science and Technology: “Doing business in this area is quite easy, and I see nothing but great things for this area in the future.”

Roasting coffee at Kicking Horse CoffeeKicking Horse Coffee

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