Paper Excellence Canada Holdings grew thanks to its recent takeover of rival Catalyst Paper
Global connections have made B.C.’s biggest companies more resilient, but not smug
See the complete list—Top 100 2019: 1 to 50 and Top 100 2019: 51 to 100
Trade deals and rumours of trade wars; rising interest rates and tighter government regulation—such was the year in business across B.C. as the 100 biggest companies by revenue kept expanding, evolving and broaching new markets in 2018.
“Right now, the economy is pretty strong,” says Ken Peacock, chief economist with the Business Council of British Columbia. “But more and more, there’s this sense of cracks emerging, and it’s all centred around these competitiveness challenges and concerns.”
While businesses such as Avigilon Corp. and Pure Industrial Real Estate Trust were acquired and left the list, B.C.’s Top 100 companies also did their share of takeovers. In one of the most significant deals of 2018, Paper Excellence Canada Holdings Corp. announced the purchase of fellow Richmond rival Catalyst Paper Corp., closing the merger this spring. The combination of Goldcorp and U.S.-based Newmont Mining Corp. also closed earlier this year, and a regional headquarters of Newmont Goldcorp Corp., one of the world’s biggest gold miners, will be in Vancouver.
BID Group, a supplier to the forest industry, and beverage maker Mark Anthony Group made strategic acquisitions, while Victoria-based Longview Aviation Capital Corp.—owner of Viking Air—bought the Dash-8 program and the de Havilland trademark from Quebec aerospace giant Bombardier. Such deals will boost corporate revenue and job opportunities in Canada’s hottest labour market. B.C.’s unemployment rate ended 2018 at 4.4 percent, Statistics Canada reports, lower than anywhere else in the country, and remained so through the first quarter of this year.
That strong showing came even as regulations tightened and fears grew about the policies of the province’s NDP government, hitting its stride after a full year in power. “Canada is starting to garner a reputation as a place that’s very difficult to get anything accomplished, particularly on the landbase,” says Peacock, noting that the issue isn’t restricted to B.C.
Government measures designed to limit speculation and curb house prices catered to public concerns, but developers hit the brakes and real estate investment began to flag. Demand remained robust, according to Toronto-based real estate services firm Altus Group, resulting in the second-best year on record for investment sales in the Lower Mainland, but rising rates, trade worries and provincial policies weighed on activity. Total investment dropped 15 percent from a year earlier, to $12.5 billion, as developers hit pause on residential projects.
Peacock says mining could be next in line for investment to cool. The fledgling cannabis sector—simultaneously hailed as the next big thing in the run-up to the legalization of recreational sales last October and the biggest threat to food-producing land after foreign ownership—is already being reined in. The federal and provincial governments declared pot a legitimate crop but denied it the financial support available to other farm products.
Meanwhile, legal cannabis sales—projected to total $1.5 billion this year nationally, according to a recent report by U.S. market intelligence firms Arcview Market Research and BDS Analytics—have yet to place the likes of Delta greenhouse vegetable grower Village Farms International and startups Sunniva, Tilray and Zenabis Global in the Top 100.
Challenges at home and trade uncertainties didn’t dampen the province’s entrepreneurial spirit, though. The top companies in the province form a cohort that’s more resilient than those of the not-so-distant past, when revenue was closely linked to local spending.
The 30th anniversary of our Top 100 event gives us an opportunity to weigh how the list has changed over the past three decades. Gone is the preponderance of players rooted in the local and regional economy: Pacific Brewers Distributors and grocery counterpart Kelly Douglas & Co., retailing giant Woodward’s Stores, and food processors Dairyland and Lucerne. Gone, too, are larger resources companies that proved attractive targets as globalization swept the commodities sector: Cominco, Fletcher Challenge, MacMillan Bloedel and Placer Dome have been replaced by Teck Resources and West Fraser Timber Co. Those two companies remain cornerstones of the top 10, alongside Telus Corp. and one of the list’s most resilient businesses, the highly diversified Jim Pattison Group.
Outside of Crown corporations like WorkSafeBC and retailers, geographic diversification is a hallmark of the Top 100. For the most part, the biggest businesses on this year’s list thrive thanks to activities beyond the province’s borders.
Finning International supplies heavy equipment to projects around the world, while outward-looking fashion and food companies include Aritzia and Nature’s Path Foods. Gateway Casinos & Entertainment’s plans to go public on the New York Stock Exchange mark a rare initial public offering by a B.C. company, more than a decade after the financial crisis and the IPOs of the mid-2000s. Meanwhile, companies from Ritchie Bros. Auctioneers to Windset Farms have struck deals that allow them to succeed globally from a base in B.C.
It’s a visible sign of an economy that continues to attract talent, thanks to flexible immigration policies and an enviable quality of life. Technology companies in particular find B.C. a convenient place to set up, giving them access to a talented workforce within a short distance of other West Coast tech hubs. Housing costs may be high, but the other factors more than make up for it.
“The quality of life is great, which means we can attract the best global talent, and local talent wants to stay here and grow,” says Jill Tipping, president and CEO of the BC Tech Association. “A strong talent pool is the key thing tech companies need to thrive. So while everything isn’t perfect, B.C.’s strengths more than offset the challenges for tech companies and workers.”
But the cost of housing—and real estate in general—should sound alarm bells for policy-makers. Although an exodus of companies is unlikely, the long commuting times required to find affordable digs for living or work could end up giving other jurisdictions an edge.
“A lot of companies in many ways are more resilient, but I would add a caveat,” the BCBC’s Peacock says. “Yes, they may be more resilient, but I don’t think that can result in any sort of complacency.”