BC Business
IN FULL BLOOM Tourism destinations like downtown Victoria are thriving thanks in part to a favourable exchange rate and new air connections
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Other Canadians think of Vancouver Island mostly for having the most benign, un-Canadian climate in the country. And sure enough, the region attracts more than its share of retirees and other well-heeled migrants from colder climes. But the Island is also accommodating to business, with a thriving, diversified economy. "Vancouver Island...
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Other Canadians think of Vancouver Island mostly for having the most benign, un-Canadian climate in the country. And sure enough, the region attracts more than its share of retirees and other well-heeled migrants from colder climes.
But the Island is also accommodating to business, with a thriving, diversified economy. “Vancouver Island is booming,” economist Bryan Yu wrote simply in Central 1 Credit Union’s November 2018 regional outlook. Employment surged 10 percent from 2014 to 2017 5.5 percent in 2017 alone led by gains in the service sector (accommodation, foodservices, information and culture, and wholesale and retail trade). Although he predicts a moderation in the pace of growth, Yu expects the momentum to continue through 2020.
Tourism in particular is benefiting from the decline in the value of the Canadian dollar versus the U.S. greenback since 2014. Hotel occupancy, at 62.5 percent, is the highest it’s been since 2001, and room rates are testing new peaks. The major national airlines, Air Canada and WestJet Airlines Ltd., have increased flights and seat capacity to both Comox Valley Airport and Victoria International Airport, which is doubling the seating capacity of its ground-floor departure lounge with an expected completion date in spring 2020.
Victoria’s information technology cluster welcomed a new arrival in November 2018 in the form of Daitan Group. The Brazilian company aims to scale up this, its first foreign software development office, to 100 employees within two years. Being in the same time zone as Silicon Valley, where many of its clients are based, was a factor in the decision, but so was the city’s relative affordability and high quality of life, Daitan founder and CEO Augusto Cavalcanti told the Victoria Times Colonist. “The whole world wants [software developers]. Who offers the best environment in terms of work as well as living I think will retain those guys, and that’s why we chose Victoria,” he said.
Though manufacturing activity pulled back in 2018 after strong gains in the previous two years, aerospace company Viking Air Ltd. hired an additional 50 staff late in the year and Seaspan ULC’s Victoria shipyard continues to benefit from the federal government’s National Shipbuilding Strategy in replacing and upgrading naval and Coast Guard fleets. Canadian Forces Base Esquimalt, the Canadian Navy’s station on the West Coast, is itself undergoing upgrades and modernization projects collectively worth $1.3 billion.
The Vancouver Island and Coast region boasts a number of renewable energy projects in the works. The Hawkeye Green Energy Project proposes a network of generation sites around Toba and Jervis inlets. The Nahwitti Wind Farm would see 50 wind turbines erected north of Port Hardy. Meanwhile, BC Hydro finished replacing the John Hart generating station near Campbell River last December at a cost of $1.1 billion. Decommissioning work to remove the old facility will continue into 2019.
The Island also holds out hope of getting in on the liquefied natural gas game. Though Steelhead LNG recently called a pause in its plans for a $30-billion gas liquefaction plant and export terminal in Sarita Bay on Alberni Inlet, on land controlled by the Huu-ay-aht First Nation, a smaller project, Discovery LNG, is aiming to build a plant at the former Elk Falls mill site near Campbell River. Both projects have obtained export permits from the National Energy Board.
Port Alberni Port Authority, meanwhile, is exploring the potential to turn the west-facing port into a $1.7-billion container transshipment hub designed to relieve congestion in Metro Vancouver port facilities by transferring cargo between short-haul barges and ships bound for Asia.
Coastal communities including Powell River and Port Hardy cheered the B.C. government’s decision to restore ferry routes and capacity that had been cut in previous years, effective April 1. “Permanently reinstating sailings that were cut by the previous government will help ensure families, small business owners, and seniors have easier access travelling along two popular BC Ferries routes,” Powell River-Sunshine Coast MLA Nicholas Simons said of restored service in his riding.
Like other urban areas in B.C. and Canada generally, the Capital Region and Nanaimo witnessed a pullback in residential real estate sales and prices in 2018. However, with property values having risen substantially over the long term, in-migration of more than 10,000 people per year and a still undersupplied housing market, home building is expected to remain robust for the foreseeable future.
The largest projects planned or under construction include Union Bay Estates, a $2-billion, 346-hectare development to feature two hotels, 375,000 square feet of commercial space and nearly 3,000 residential units in the mid- Island area south of Courtenay and Westhills Green, a $2-billion, 6,000-dwelling, LEED-certified community being rolled out in the Victoria suburb of Langford. For people and companies alike, the Island remains a magnet.