Lower Mainland-Southwest: Bullish Outlook

Credit: Molson Coors Brewing at the Chilliwack Food and Beverage Processing Park. | Chilliwack Economic Partners Corporation

When Red Bull went looking for a North American site to premix the ingredients used in its energy drinks, it left few stones unturned. For this, only the second such facility in the world after the company’s headquarters in Austria, it needed a supply of high-quality agricultural produce, a workforce with a range of skills, competitive costs and the ability easily export to the 175 countries where it sells its products by land, sea and air.

This year it settled on a 15-acre property within the Chilliwack Food and Beverage Processing Park in the eastern Fraser Valley. The company credited the location’s proximity to the Port of Vancouver and the U.S. border in its decision.

You’ll hear different versions of the same reasoning why most businesses look to locate first in the Lower Mainland, in B.C.’s southwest. Metro Vancouver, the Fraser Valley and the Sea-to-Sky Corridor extending north account for most of the province’s population, most of its consumer market and most of its economic output. Combining a large, diverse, well educated labour pool, easy access to world markets, fertile farmland and a mild climate, the Lower Mainland is the engine of B.C.’s economy. It’s an internationally recognized centre for disparate industries from mining exploration and finance to filmed entertainment to athletic fashion design.

Further, Central 1 Economics expects the province’s economic growth, job creation and housing demand to rotate back towards Metro Vancouver in the coming year as tourism and immigration recover from the disruption of the COVID-19 pandemic. Employers are increasingly bringing their workers back into centralized offices for at least a few days a week.

“With business activity normalizing, business investment spending is expected to accelerate in metro areas,” Central 1 chief economist Brian Yu wrote in the credit union’s 2022-23 Regional Economic Outlook. “The flow of remote workers will slow or potentially reverse. These trends will propel growth back towards the Lower Mainland/Southwest, and Metro Vancouver specifically.”

21s Century Economy

Credit: Surrey is cementing its role as the Lower Mainland’s manufacturing and distribution hub with the expansion of the South Campbell Heights business park. | City of Surrey

Much of that growth is in fast-growing, export-oriented industries. A survey by office leasing company CBRE found Vancouver to have the fastest job growth in technology among all North American cities in recent years. CBRE’s Tech- 30 report said the city added 28,300 information technology jobs between 2018 and 2021, a 44.2% increase. Despite the job cuts by major technology firms over the past year on a global level, Microsoft, PlentyOfFish, Tipalti Inc. and Masimo Corp. all expanded their office footprint in downtown Vancouver. The city remains attractive for technology recruitment both due to the quality of the Canadian workforce and Canada’s relatively welcoming immigration policies compared to the United States.

The list of knowledge-based industries growing in the region extends well beyond software development too. In January, Surrey-based No Meat Factory was the recipient of $42 million in venture capital to expand its production and marketing of vegan meat alternatives. In 2021, CTK Bio, the cleantech offshoot of Korean cosmetic industry supplier CTK, likewise set up its Canadian headquarters in Surrey. The plant is slated to expand by 100,000 square feet in 2024.

Spurred by the experience of the COVID-19 pandemic, 350 manufacturers south of the Fraser River are collaborating on a Supply Chain Resiliency Program, providing an inventory of 823 unique industrial capabilities that could pivot their existing processes to support the production of key resources in the face of emergencies.

Major Investments

Credit: The $2.8-billion Broadway Subway project in Vancouver, currently under construction, is part of a plan to extend the SkyTrain rapid transit system to UBC.

Capital allocated for major projects in the Lower Mainland grew faster in both absolute and relative terms than in any other region over the past year, rising 20% to more than $100 billion, the Certified Public Accountants of B.C. note. The Lougheed Town Centre development in Coquitlam, announced in 2021, is a $7-billion project. Also under construction is the $2.2-billion replacement of St. Paul’s Hospital in Vancouver’s False Creek Flats.

Major transit improvements are also on the bill, notably the $2.8-billion Broadway Subway line, which will extend the SkyTrain rapid transit system west from Clark VCC Station to Arbutus Street in Kitsilano. Plans call for the line to run all the way to the University of British Columbia at the tip of Point Grey by 2030. SkyTrain is also being extended eastward through Surrey and Langley in a $4-billion announcement confirmed in 2021.

Surrey, which is on track to surpass Vancouver as B.C.’s largest city in the next decade with some 8,000 advanced manufacturing and robotics suppliers alone creating a robust local supply chain. City council recently approved build-out of the South Campbell Heights business park, adding needed industrial land to the marketplace. In recent years Campbell Heights became the headquarters of laboratory equipment supplier Alliance Scientific as well as a regional distribution centre for Amazon, Sobey’s (owner of Canada Safeway) and pharmaceutical distributor McKesson Canada.

In 2022, the University of British Columbia announced it would build a Surrey campus. Simon Fraser University, meanwhile, is adding a new Quantum Algorithms Institute and BC Centre for Agritech Innovation at its SFU Innovation Plaza in Surrey City Centre. Federal and provincial funding was announced for the BC Centre for Agricultural Innovation based at SFU Surrey, a collaboration between nine colleges and universities with a goal to help farmers leverage new innovations around food production and processing technologies. The institution also has based its Fuel Cell Research Lab Centre of Excellence, Powertech Labs and Sustainable Energy Engineering hubs in the municipality.

Valley Bound

Credit: City of Mission

As Vancouver and its suburbs grow denser and more costly, migration of people and businesses continues to the less crowded, more affordable Fraser Valley to the east. Chilliwack was the second fastest-growing city in Canada between the 2016 and 2021 censuses, surpassed only by another B.C. city, Kelowna. Its population grew 12.1% to 113,767 over the five-year period. (Another Fraser Valley municipality, the Township of Langley, grew even faster, by 13%, but was not included in the list of census metropolitan areas.)

Agriculture remains a pillar of the Fraser Valley economy, and because much of it is supply-managed (including dairy, poultry and egg production), it is close to recession-proof. As for industrial space, land that not long ago cost half a million dollars per acre now typically fetches $3.5-5 million, which is causing owneroccupiers and developers alike to upgrade their properties for more intensive uses. Examples include the Beedie Group’s 15- acre Skyline Business Park, Denciti’s 12.5- acre Fraser Gateway and the Chilliwack Food and Beverage Processing Park centered on the Molson Coors brewery.

The nearby City of Abbotsford continues see expansion of the Abbotsford International Airport, which now hosts more 500,000 passengers annually. The city’s profile rose in 2021 with the relocation of the Vancouver Canucks farm team to the Abbotsford Centre from Utica, NY. The American Hockey League franchise is now known as the Abbotsford Canucks.

Some of the most ambitious plans for community development are coming out of Mission, a small city north of the Fraser River. Last year Mission adopted a Waterfront Revitalization Master Plan into its official community plan that will guide the redevelopment of nearly 300 acres stretching along 3.5 kilometres of Fraser River frontage. The plan calls for a mix of commercial, institutional, light industrial and residential uses combined with parks and open spaces. The city also adopted a plan for the Silverdale area of southwest Mission that, upon completion, will effectively double the city’s population with 20,000 new homes and more than a half million square feet of retail and office space.

Recent land settlements with the provincial and federal governments have enabled the urban Musqueam, Squamish and Tsleil-Waututh First Nations to emerge in recent years as the leading real estate developers in Metro Vancouver. Collectively, the three nations have 25,500 new homes in various stages of development. Some of these are owned by an individual First Nation, like the Musqueam’s recently opened Lelem complex near the University of B.C. and the Squamish’s massive Senakw project on Kitsilano Point. But they also have a joint venture, MST Development Corp. with a property portfolio worth an estimated $5 billion.