Putting last year’s expanded set of 46 communities to the test again, our sixth annual ranking of the province’s best cities for work highlights the consistency of the top economic contenders. While the 2020 list features encouraging performances and favourable reversals of fortune for some cities, it also presents less hopeful signs for others. Three experts in urban economics weigh in
At first glance, the 2020 Best Cities for Work in B.C. ranking looks much like 2019’s, with the Sea-to-Sky Corridor taking the lead again. But given the province’s more-subdued economic performance over the past year, our latest list may be as much about underperformers as overachievers. “It’s more a story of some cold spots than it is about hot spots,” says Peter Hall, associate professor of urban studies at SFU.
Gloomy signals from the forestry and real estate sectors figure in that assessment. At the same time, persistently high housing prices in Metro Vancouver appear to be having a ripple effect, pushing working families to the suburbs and elsewhere. As the Lower Mainland wrestles with the resulting burden on its transportation systems, communities from Vancouver Island to the Okanagan are seeing their populations grow.
For our sixth annual Best Cities for Work survey, we’ve used 10 indicators, gathered with help from research partner Environics Analytics, to evaluate the prospects for B.C.’s largest municipalities. (For details, see page 33.) Falling under three comparably weighted categories—income, household expenses and lifestyle, and municipal economic performance—these numbers reveal much about a community’s attractiveness as a place to work.
For the second year in a row, the Sea-to-Sky duo of Squamish and Whistler take the first and second spots, respectively, with the Township of Langley edging the District of North Van-couver to clinch No. 3. Driven by high household incomes, double-digit population growth and lofty spending on recreational opportunities, these top three cities have remained economically resilient despite their relatively high costs of living. In the case of Squamish, a hot residential construction market punctuates its first-place standing, with housing starts seeing nearly 50 percent more activity than in the next leading city on the list.
“There’s a lot of multiplier effects out of construction,” says Tsur Somerville, associate professor at UBC Sauder School of Business and senior fellow with the university’s Centre for Urban Economics and Real Estate. “It has a pretty high local factor—a lot of labour and a lot of the materials are local.” New homes spur local spending on household goods, too, Somerville notes.
According to SFU’s Hall, the relatively weak Canadian dollar has also helped sustain tourism in the Sea-to-Sky Corridor. However, he thinks the upgraded highway to Whistler may be a bigger factor in the area’s sustained economic success. “You build a nice road for people and you don’t make them pay for it—they reap the benefits.
Powered by the growth of its port, Prince Rupert again makes our top 10
The bright spots
After last year’s fall from multi-year stints in the top three, the northeastern communities of Fort St. John and Dawson Creek have regained some ground, with Fort St. John just shy of cracking the top five this year and Dawson Creek recovering three spots to reach No. 27. Even with muted oil and gas prices, major energy infrastructure projects like the Site C dam have kept the region’s economic wheels turning. Couple that with high average incomes, inexpensive housing and—in Fort St. John’s case—generous household spending on recreation, and the Northeast remains competitively positioned.
To the west, on B.C.’s North Coast, Prince Rupert has maintained an appearance in the top 10 for two consecutive years, aided by healthy income growth. Hall isn’t surprised to see it performing so well, given its growing stature as a port city. “The way the port is developing in relation to the city is quite positive,” he says. “The port doesn’t create a lot of jobs, but it does create good jobs for locals.” Over the next few years, Prince Rupert stands to further benefit as the $40-billion LNG Canada project in nearby Kitimat ramps up.
Vancouver Island is another bright spot, with Victoria, Saanich, Sidney, Nanaimo, Port Alberni, Courtenay, Comox and Campbell River rising a collective 58 places. After last year’s drastic decline, Victoria vaulted ahead 17 positions, mostly thanks to its province-leading low unemployment rates supporting solid wage growth. A moderating housing market has also taken the edge off high prices in the capital, which anchors the most expensive metropolitan area outside the Lower Mainland. The Central Island has fared particularly well over the past year, with reasonably priced housing and robust home construction in communities such as Courtenay and Parksville. Nanaimo, bolstered by strong population growth, leads the pack at No. 8, up seven places.
Communities in the Fraser Valley also distinguished themselves on this year’s list, with Abbotsford, Chilliwack and Mission leaping ahead 15, nine and eight spots, respectively, largely propelled by growing populations.
Both the district and city of North Vancouver made a strong showing
The elephant in the room
Despite having two communities in the top 10—the Township of Langley and the District of North Vancouver—Metro Vancouver cities generally underperformed this year, with a collective tumble of 44 spots in the ranking. One notable exception is Pitt Meadows, which jumped eight places, thanks to a solid suite of income indicators and healthy recreational spending. New Westminster, buoyed by growth in income and population, and Burnaby, with a booming residential construction market, both saw a three-place improvement.
Leading the Metro Vancouver slide were the City of Langley and Richmond, each falling 15 places, to No. 22 and No. 35, respectively. The City of Langley was wracked by underwhelming average household incomes, shrinking recreational spending, growing commute times and a slight dip in housing starts compared with last year. Dragging Richmond down: low average income for younger workers and some of the most expensive housing in the province.
Vancouver, continuing a downward trend from the previous year, fell an additional six places. Sluggish population growth, lengthy commutes and B.C.’s highest shelter costs continue to suppress it in the ranking, even with low unemployment, respectable income growth and a still-active construction industry.
The real estate market may have cooled, but unaffordable housing keeps taking a toll on the broader region’s performance, as captured by our average value of primary real estate indicator. Even more significant, the experts believe affordability is impacting Metro Vancouver well beyond what our ranking methodology might reveal.
Surrey barely cracked the top 20, reflecting a slide for Metro Vancouver cities
“You have lots of job creation in the region as a whole, but housing is a huge barrier for a lot of people to enjoy the fruits of their labour,” says Iglika Ivanova, senior economist with the Canadian Centre for Policy Alternatives think tank. The result has been a gradual erosion of people’s standard of living. “It’s one thing to think housing market prices are up, we have more wealth, but on the flip side we have a lot of household debt, and B.C. households have the highest debt levels of all the provinces when compared to income,” Ivanova adds. “Debt to disposable income is very high.”
One result, Hall points out, is an exodus of residents looking for more-affordable pastures in the suburbs. “There are really large pressures on the outer suburbs of Vancouver,” he says. “Where it shows up in the numbers is increasingly intensified forms of urban development in the suburbs—condo towers in Surrey and denser and denser multi-family low-rise developments on, you know, the other side of White Rock.”
By fleeing to the suburbs while holding onto their jobs in the pricier central cities, workers are straining transportation networks with longer commutes and growing congestion. “As more and more people want to be here pursuing the job opportunities and the economic growth opportunities, we’re going to have, increasingly, infrastructure challenges,” Ivanova reckons. “It’s a challenge that we don’t have very good transit to some of the outlying communities. Workers want to be close to transit—they don’t want to commute long hours. That makes it hard for recruitment and hard for businesses to locate.”
The solution? “We’re going to have to deal with congestion better,” Ivanova says, citing a bevy of upcoming improvement projects, including highway upgrades, the Pattullo Bridge replacement, the Broadway Corridor SkyTrain extension and more rapid transit in Surrey, as signs of progress. “We’re slowly working on it.”
While swapping more-affordable housing for longer commute times has been a reasonable trade-off for some, it doesn’t work for everyone. “It is very expensive in Metro Vancouver. It has become out of reach for many,” Ivanova observes. An alternative solution has been to escape the unaffordability and long commutes of the Lower Mainland altogether by looking for opportunities farther afield.
“We are seeing, anecdotally, that families are moving out of Metro Vancouver,” Ivanova says. “Some other regions are benefiting because they’re getting young families coming in, starting businesses, perhaps, or increasing the pool of labour there.
After debuting at No. 12 on last year’s list, oceanside Sechelt took a big fall
A tale of two cities
When it comes to affordability, Metro Vancouver’s loss has been other regions’ gain, Hall acknowledges. “There are spillover effects. Are they going to show up in big regional economic numbers? Maybe not, but they’re important to those places,” he suggests. “Nanaimo is a good case there. It had been a depressed place; it’s no longer.”
UBC’s Somerville has seen a similar trend: “It’s very striking: whether you go to Kelowna, you go to Victoria, the feel of those places is a lot less sleepy than, say, 15 years ago,” he says. “This may be tied to millennials moving elsewhere and looking for more opportunities, looking for more-affordable places.”
The experts are quick to admit that clear-cut data to support these observations are hard to come by—at least until the 2021 census. Still, indirect evidence, such as rising housing costs and more development activity in the province’s secondary centres, suggests that considerable intraprovincial migration is under way. However, the province’s housing market is only one of the disparate forces shaping the fortunes of B.C.’s cities in recent years.
“It’s kind of like a tale of two cities,” Somerville says. “There are cities in the province where people are moving to and things have grown and there’s a feeling of rebirth and reinvigoration, and then there are cities that have really been hit negatively on the resource side that are struggling a lot more—really in timber and wood products. Cities and towns that are dependent on those industries continue to struggle.”
Unsurprisingly, perhaps, in the Cariboo, where 22 percent of the workforce has ties to forestry, the economy has begun showing signs of distress. The region’s largest communities—Prince George, Quesnel and Williams Lake—fell 50 collective spots to rank among the lowest on this year’s list. Although they offer affordable housing and convenient commute times, their depressed income growth, population growth and unemployment rates are cause for concern.
The challenge and opportunity for these centres may be to reinvent themselves at a time when they can take advantage of the disparity between their affordable housing costs and those of larger provincial centres.
Other regions have begun to capitalize on this dynamic as they try to diversify their economies away from resource-dependent industries, the CCPA’s Ivanova says. “We’re seeing some bursts of tech and other entrepreneurial activity in the Kootenays,” she reports. “It used to be the case in many communities outside of Metro Vancouver that young people went away to go to school and never came back, because they needed to work and stayed in the big city. Now we’re starting to see that some of the families are moving back, and that’s a benefit for those other regions out of the unaffordable housing in Vancouver.
Just so you know...
• Our ranking only includes cities of 10,000 or more permanent residents.
• We excluded bedroom communities such as Lake Country, Sooke and West Vancouver, which may offer a high quality of life but have relatively small job markets.
• Langley and North Vancouver are represented on the ranking by both their city and district municipalities.
• Despite using the term “city” throughout, our annual list is technically a ranking of municipalities, as legally defined by the B.C. Local Government Act.
• We work with research partner Environics Analytics because we believe it has the best data available–but even the best data has its limitations. The unemployment rates come from Statcan’s September 2019 Labour Force Survey, a three-month moving average that only calculates rates for B.C.’s eight economic regions and four census metropolitan areas. Similarly, housing starts figures are provided by Canada Mortgage and Housing Corp.’s monthly Starts and Completions Survey, and only reflect the year-to-date figures collected to the end of September 2019. As such, those indicators won’t show economic trends over the final quarter of 2019.
How we crunched the numbers
To determine the Best Cities for Work in B.C., we examined 10 economic indicators with weightings ranging from 5 to 15 percent. Unchanged from last year, these include so-called lagging economic indicators, such as income growth, as well as more forward-looking, or leading, indicators like housing starts. Each city received a score out of a total of 100 points and is ranked accordingly.
Average household income (maximum score of 10 points)
This figure represents the average for 2019. To establish a score out of 10, we gave the top average income 10 points and measured the other cities in proportion to that.
Average household income under 35 (10 points)
The key number here is 2019 average household income for primary income earners under the age of 35. Again, we gave the top average 10 points and scored the other cities in relation to that.
Five-year average household income growth (15 points)
This number represents the percentage income growth from 2014 to 2019. Assuming a floor of zero, the top value received 15 points, with the other cities scoring accordingly.
Average household spending on recreation (10 points)
For this indicator, we measured household spending on all leisure activities tracked by Statistics Canada, from concerts and sporting events to recreational vehicles and home entertainment systems. Giving the city with the highest average recreation spending a 10, we evaluated the others in relation to it.
Average shelter spending (10 points)
Here we’re talking about recurrent housing-related living expenses, such as mortgage payments, rent and utilities, for 2019. The city with the lowest average shelter spending received a score of 10, with the others scoring in inverse proportion.
Average value of primary real estate (5 points)
This value measures the average price of primary real estate (i.e., not including secondary or recreational properties). We gave the lowest value 10 points and scored the other cities in inverse proportion to that.
Average commute time (10 points)
For all members of the employed labour force aged 15 years and over, this indicator provides the average one-way commute time, in minutes. The city with the lowest average duration received a score of 10, with the others scoring in relation to that.
Five-year population growth (10 points)
This figure represents the proportional population growth of each city from 2014 to 2019. We limited the floor to zero and scored cities out of a maximum value of 10.
Housing starts per 10,000 residents (10 points)
We derived this value from the year-to-date housing starts from Canada Mortgage and Housing Corp.’s monthly Starts and Completions Survey to the end of September 2019. Housing starts are divided by the total city population and multiplied by 10,000 to give the number of housing starts per 10,000 residents. The city with the highest number of housing starts per 10,000 residents received a score of 10, with the other cities scoring in relation to that.
Unemployment rate (10 points)
The unemployment rates cited are from Statcan’s Labour Force Survey for September 2019. We gave the lowest rate 10 points and evaluated the others in relation to that.