BC Business
Top 100 | BCBusinessSignificant growth is not expected until LNG projects get underway.
British Columbia’s economy was both inspiring and confounding in 2013. Overall business activity was stable, even strengthening, despite signs that recovery from the 2008-09 recession may have reached its peak.
Aggregate revenues for B.C.’s Top 100 companies in 2013 were up 5.4 per cent over the previous year, and traditional drivers of the B.C. economy remained firmly in the lead. The top three companies on the list remain unchanged from last year: Telus Corp., Teck Resources Ltd. and the Jim Pattison Group—even though Teck took a 9.1 per cent hit to its revenues as global demand for commodities slipped.
The world craves finished goods, and miners like Teck, Goldcorp Inc. and First Quantum Minerals Ltd. supply the raw materials for a variety of consumer goods, including the electronics at the heart of such Top 100 companies as Telus, Best Buy Canada Ltd. and Glentel Inc.
But while resource companies still hold prominent positions among the Top 100, many saw significant drops in revenue last year. The top drops in revenues were recorded by Goldcorp, Fortress Paper Ltd. and Silver Wheaton Corp. Lower revenues for these companies meant less demand for office space in Vancouver, which prompted Maury Dubuque, senior vice-president of office leasing for Colliers International in Vancouver, to express the concern of many when he commented at a conference last fall, “Seriously, are there really any growth industries in British Columbia?”
On the positive side, the global recovery that solidified in 2013 promises to buoy the province’s fortunes in 2014. A glance at the unemployment numbers shows this is already happening: while provincial unemployment ended the year at 6.6 per cent, up from 6.5 per cent in January 2013, it has since inched down to 6.2 per cent—5.9 per cent in Vancouver.
Bryan Yu, regional economist for Central 1 Credit Union, doesn’t see significant growth taking place until 2015, but says B.C. exports will support modest increases in employment and job creation until more aggressive growth kicks in with the launch of LNG projects in the north. The activity should translate into jobs in Vancouver, where builders such as Polygon Homes Ltd. and brokers of office and industrial space, including Colliers, experienced growth in 2013.
Yet change is afoot. B.C.’s export success is linked to the Asia-Pacific region, and the story in recent years has been of Chinese companies seeking to establish subsidiaries here: the Agricultural Bank of China, for example, chose Vancouver for its Canadian headquarters in 2012. A glance at the major shareholders in the Top 100 companies, however, indicates that investment has started to take a more subtle form, with Asian investors acquiring stakes in strategic sectors. Teck disclosed its single biggest shareholder as China Investment Corp., at 18 per cent, a shift from last year when Temagami Mining Co. Ltd. held the honour at 28 per cent. Meanwhile, China Gold International Resources Corp. Ltd. returned to the list, and its major shareholder is state-owned China National Gold Group Corp., with a 39-per-cent ownership stake.
Asian ownership interests were not limited to China; the biggest shareholder disclosed for Capstone Mining Corp. is Korea Resources Corp. at 10.6 per cent. Korea is B.C.’s fourth-biggest trading partner, making the investment a natural evolution of the existing relationship.
The influx of foreign investment was not matched by a rise in charitable giving. Although overall donations to the province’s biggest charities saw aggregate tax-receiptable donations rise 5.9 per cent in 2013, many charities surveyed posted significant drops in donations. SFU, for example, saw donations fall 55.6 per cent, and Family Services of the North Shore and the David Suzuki Foundation saw donations fall 33 per cent and 23.6 per cent, respectively.
The explanation might be found in Statistics Canada’s most recent survey of charitable giving, based on 2012 tax returns. (Official numbers from 2013 tax returns are not yet available.) While the median donation to charity in B.C. in 2012 rose to $390 from $370 in 2011 and 2010, the number of active donors fell. In short, those who chose to give gave more, and a select few benefited; others depending on smaller donors suffered.