British Columbia Economic Overview
The data provided below describes the general condition of the British Columbia economy at this time. The statistics used are the latest data available on each segment of the economy as at June 9, 2008.
British Columbia is the westernmost province in Canada, strategically situated on the Pacific Rim and comprising 13% of Canada’s total population. After Ontario and Quebec, it is the third most populous province, with 4,113,487 residents as of May 1, 2006, representing an annual increase of around 1.3% per year since the 1996 census. New residents to the province are attracted by the temperate climate and the ample recreational opportunities. Over the years, B.C. has become well known as both a retirement and a vacation destination. After Ontario, B.C. is the most popular province for immigrants, taking 18% of Canada’s total immigrant population in 2006. From 2001 to 2006, 177,800 of the 1.1 million newest immigrants who came to Canada settled in B.C. These findings are reported from the 2006 Census Study, which is performed once every five years. Population changes through net inter-provincial migration, which were negative during the late 1990s and the early years of this decade, have returned to a more traditional pattern and the net migration to B.C. for 2006 was positive, at approximately 48,000, due to B.C.’s strong economy and opportunities for employment.
The majority of people moving to B.C. tend to locate in the Metro Vancouver and Victoria regions. The Metro Vancouver area has a population of 2,180,700 ( July 1, 2006 population census), which represents approximately 50% of the provincial population. Between 2001 and 2006, the communities in the Metro Vancouver District that recorded the largest population increases were Port Moody, Surrey and Abbotsford. These communities grew in population by 15.5%, 13.6%, and 7.2%, respectively within this five-year period. This is the latest data released from the 2006 Census Study. The Metro Vancouver area is the transportation, service, financial and manufacturing hub of the province.
The composition of the B.C. economy has undergone considerable change. B.C.'s manufacturing is diversifying from its traditional role in the primary industries to more high tech industries involving computers and telecommunication. Nearly 79% of employed British Columbians work in the service sector, including 16% in trade and 10% in health and social services.
The City of Vancouver has been awarded the Olympic bid to host the 2010 Winter Olympics which will be held in Vancouver and the mountain resort of Whistler, B.C. Certain events and the media centre will be based in Vancouver. Expansions are underway to the Vancouver International Airport, the Port of Vancouver, and the Vancouver Convention Exhibition Centre. Plans are also underway to construct various Olympic venues, such as two full service athlete villages, the Richmond speed skating oval, and additional public sector projects to service the Games. To accommodate the increased traffic between Vancouver and Whistler, upgrades will be performed on the Sea-to-Sky Highway to improve the flow of traffic.
Tourism is a major component of the B.C. economy. Although 2006 was a steady year after a healthy performance in 2005, visits were down 1.56% from Asia/Pacific, up 1.45% from Europe and down 2.1% from the United States. Convention business also increased in 2006 and there is a positive outlook in the next few years. While the Canadian dollar has been appreciating relative to the U.S. currency since late 2003, the current strength of the Canadian dollar does not appear to have negatively impacted tourism revenue in the province. Total room revenue for 2006 was more than $1.82 billion, an 8.3% increase over the previous year. Revenue up to February, 2008 is approximately $274 million, a 7.0% increase over the same period last year.
The economy of British Columbia is still based largely on exports. Many of B.C.'s industries are particularly sensitive to the state of the U.S. economy and to the value of the Canadian dollar, which, as of June 9, 2008, was at $0.955019 against the U.S. dollar. B.C.’s year-over-year inflation rate for April, 2008 rose by 1.7% from April, 2007.
British Columbia is more diversified than the nation as an exporter. B.C.’s location on the west coast of the country means that the province is a port of entry and exit for goods coming to or from parts of Canada. While Canada sent some 78.9% of its exports to the U.S. in 2007, only 59.7% of British Columbia's exports went to the U.S. After the U.S., the largest destinations for provincial exports were the Pacific Rim and Europe. Japan is the second largest country destination, receiving 12.8% of provincial exports in 2007.
The Port of Vancouver experienced growth during 2007 despite competition from other West Coast ports. Total container volumes handled at the Port increased by 9.0% from 2006 to 19.2 million twenty-foot equivalent units in 2007. Total tonnage through the Port of Vancouver was up 4.0% from 2006, to 82.7 million tonnes. Increased global demand for coal (the Port’s single largest commodity), grains, potash, crude petroleum and minerals were the primary reasons for the pick-up in volume. There has been continued growth in trade with Pacific Rim countries, such as China, Japan and South Korea, and this trade is expected to increase dramatically over the next 15 years. The cruise ship sector remains a valuable component of the local tourism industry, despite increasing competition from Seattle. For 2007, there was an increase of 14.6% in revenue passengers, compared to the same period the year before.
Retail sales are another good indicator of economic performance. The value of B.C. retail sales in February, 2008 was $4.848 billion, a 4.9% increase over the same month in 2007. Retail sales in B.C. for 2007 totalled approximately $56.4 billion. Monthly retail sales have increased in comparison to 2006, due to population growth, higher consumer confidence, low interest rates, and local employment gains in various industries.
During the early and mid-1990s, B.C. was able to maintain employment levels consistently higher than the national average. This relationship was reversed during the early part of the decade, but has since returned to the earlier trend. The provincial unemployment rate of 4.5% as of May, 2008 is lower than the national rate of 6.1%. Statistics Canada reported 2,317,400 persons employed in the province for the month of May, 2008.
As of June 9, 2008, the Bank of Canada rate was 3.00%, the Royal Bank of Canada prime rate was 4.75% and the five-year closed mortgage rate was 6.65%.
In April, 2008, housing starts in the Vancouver C.M.A. increased to 1,560 units from the March figure of 1,353. In 2007, housing starts in the Vancouver C.M.A. were up 1% from 2006 to an annual total of 18,705 units. Despite this, 2007 was another year of good growth compared to the long term historic trend for B.C.’s housing sector. The gradual rise in interest rates has been offset by a combination of an improving economy, increased employment and high levels of consumer confidence. However, future growth may be hampered by the increasing cost of materials and a shortage of skilled labour. An increasingly large share of housing starts are multiple-unit developments and two-thirds of projected provincial housing starts are in the Vancouver C.M.A.
In April, 2008 the total monthly non-residential building permit value for B.C. was approximately $378.0 million. The 2007 annual value of $3.94 billion, consistent with historic growth trends, showed an increase of 2.0% from 2006.
Sources: Statistics Canada, Statistics B.C., Royal Bank of Canada, C.M.H.C., Port of Vancouver, Tourism British Columbia, Vancouver 2010 Bid Corporation.
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