The Top 100: The Last Good Year

How healthy was the B.C. economy, and how long could growth continue? Those questions were firmly answered in the opening months of 2020, as a new coronavirus spread from Wuhan, China, to infect the world. COVID-19, declared a pandemic by the World Health Organization on March 11, shuttered economies around...

Credit: Karen Mackenrot, Telus

Telus Corp., led by president and CEO Darren Entwistle (shown here with Juggy Sihota, vice-president, consumer health), claimed the No. 1 spot on the Top 100 list again this year

In our annual ranking of B.C.’s biggest companies by revenue, 2019 brought more prosperity for retailers and manufacturers as players in the resources sectors struggled. Now it remains to be seen how long the COVID-19 pandemic will sap consumer confidence

How healthy was the B.C. economy, and how long could growth continue? Those questions were firmly answered in the opening months of 2020, as a new coronavirus spread from Wuhan, China, to infect the world.  COVID-19, declared a pandemic by the World Health Organization on March 11, shuttered economies around the globe and sent gross domestic product into a nosedive in the latter half of the month. With B.C. limiting large gatherings through the end of May, the grim outlook prompted many events to be postponed or cancelled outright. Businesses of all stripes were sent scrambling.

But the biggest companies in the province seemed set to weather the challenges, ending last year with total revenue of $195.6 billion, up marginally from 2018 to set a new benchmark for the Top 100 list. Growth was slower, reflecting the maturity of the economic cycle but underpinned by the essential nature of the business being done.

The top five companies in the province for 2019, unchanged from the previous ranking, include Telus Corp., Jim Pattison Group and BC Hydro and Power Authority. Anyone with a phone, a charger and an appetite probably gave business to all three of them last year. (Pattison Group’s diversified holdings include far more than consumer goods, making it a provincial icon.)

Looking beyond the top five, homegrown retailers and manufacturers prevail. Besides key public sector players Insurance Corp. of British Columbia and WorksafeBC, well-known names such as H.Y. Louie Co., Lululemon Athletica, Best Buy Canada, BC Liquor Distribution Branch and London Drugs hold sway in the top 20. All of them saw revenue grow last year, while the province’s traditional resources sectors—mining, forestry and natural gas—began feeling the economic chill that really took hold as 2020 dawned. It’s the picture of a resilient economy, one rooted in local demand but not immune to global impacts.

“There’s been a lot of export uncertainty in the past year,” says Bryan Yu, deputy chief economist with Central 1 Credit Union. “When we look at what sectors or which parts of the economy would do relatively well, it’s very domestic,” Yu adds. “It’s driven by the population cycle; it’s driven by people moving here, their household needs.”

Supporting the strength of those companies, often by drawing people to the province, are the software, services and export-oriented businesses that call B.C. home. They’re strong contributors to provincial  GDP, even if few of them are large enough to make the Top 100. Many of those that are giants in their field aren’t headquartered here.

The tech sector is a case in point, with thousands of people employed by and Microsoft, both of which have grown their footprint in the province. “We are largely a regional headquarters, and that’s just because we’re not a financial centre like Toronto or an oil-and-gas centre like Calgary,” Yu says.

The resilience of companies focused on serving domestic needs becomes clearer with a look at performance. All but two of the 10 posting the biggest revenue declines last year are in the resources industries, with forest companies dominating. The exceptions: satellite firm  MDA (formerly Maxar Technologies), spun out of its U.S. parent early in the new year, and Concert Properties, which saw revenue drop as real estate development slowed.

Yet both MDA and Concert underscore the role of innovation and adaptation in keeping the B.C. economy vibrant. Purchased for $1 billion by a consortium led by Toronto-based Northern Private Capital, MDA will again operate independently from its base in B.C. as it continues to grow its business with government clients.

Some of the province’s fastest-growing companies in 2019 also showed an innovative streak. Despite the forest industry downturn, Paper Excellence Canada Holdings Corp.’s acquisition of Catalyst Paper Corp. delivered a significant boost to its revenue (based on industry estimates). The acquisition in 2018 of Bombardier’s Q400 turboprop business and de Havilland brand was set to lift Victoria-based Longview Aviation Capital Corp.’s revenue to the billion-dollar mark, also earning it a spot among the fastest-growing businesses last year. Meanwhile, the BC Housing Management Commission received a $500-million boost to its budget as the province set about tackling the housing crisis—now overshadowed as markets reel from the impact of COVID-19.

But perhaps the standout when it comes to quick growth is Mark Anthony Group, which undertook a rapid expansion of U.S. manufacturing capacity in 2019 as sales of its White Claw brand of hard seltzers took off, with retail sales estimated to top US$2 billion by the end of last year. The drinks powerhouse carved out a new segment just like it did with Mike’s Hard Lemonade 20 years ago. When non-compete agreements it signed after the sale of the Mike’s brand in 2015 expired on March 1, Mark Anthony began rolling out White Claw in Canada. Then COVID hit.

How the brand weathers the social and economic disease associated with the pandemic will tell the story, as it will for many other companies. Although the top end of the list may not look that much different a year from now, the current moment is a watershed for those businesses that depend on consumer spending and exports.

“You’re going to see sectors like retail taking a large hit in the next year,” Yu says. “What does that mean for…a Lululemon or Aritzia, or those types of companies that have made some major expansions in the U.S. or abroad in recent years?”

While diversification will favour conglomerates like Jim Pattison Group, smaller companies drawing revenue from goods or services that consumers may not consider essential could face significant pain. Social distancing measures will have more general, yet-to-be-determined impacts. “That’s going to constrain the amount that the economy can in fact rebound,” Yu says. “[Consumers] will largely be staying more at home than they have in the past because No. 1, there’s the fear factor.”

The limits on the number of people allowed in workplaces and shops will also reduce productivity and increase the hassles associated with doing business. Spending will flow to those companies that offer a hassle-free experience. But many consumers will stand back, Yu reckons.

“Some people [will] view it as more of a hassle to not being able to get back to a normal pace,” he says. “Why bother at that point?”

BCBusiness prepares the Top 100 list using various sources, but it makes no representation regarding the completeness, accuracy or timeliness of any information presented.