According to a new economic report by the Chartered Professional Accountants of British Columbia, northwest B.C. had a rough year in 2016 after strong economic growth in 2015.
“Construction activity in our region declined, as major project development slowed,” said Jeanne MacNeil, partner with Edmison Mehr in Smithers. “The economic momentum from proposed LNG projects also came to a standstill due to market uncertainty and declining fuel prices.”
“Furthermore, low prices for some of our metals led to the shutting down of several mining operations in the region, as well as reduced mine development and mineral exploration activity,” she added.
As a result of reduced economic activity, the number of jobs in northwest B.C. declined by 0.2 per cent in 2016. There was an overall decline in full-time jobs, which was evidenced by an increase in reported consumer insolvencies and business bankruptcies. The region’s unemployment rate was 7.7 per cent, above the provincial average of six per cent.
However, MacNeil said it was not all bad news for the region last year.
“The recently opened Red Chris Mine achieved its first full year of production; the newly modernized Kitimat aluminum smelter also ramped up to full production, which coincided with a recovery in aluminum prices, and a small silver mine near the Yukon border began operations late in the year,” she said. “Looking ahead, continued operations at these mines and the opening of the Brucejack Gold Mine, which powered up on March 31, should bring economic activity to the region,” she continued.
“The Brucejack Gold Mine is a few months ahead of schedule and once this mine is in operation, it should employ roughly 500 workers over its estimated mine life of 18 years,” she added.
Besides a bright spot in the mining sector, the region’s forestry sector also remained a solid contributor to the economy as lumber production increased and shipments of wood pellets and logs through the Port of Prince Rupert grew. However, MacNeil says the new U.S. tariff on Canadian softwood lumber exporters will likely impact the forestry sector and affect exports through the port.
With major resource projects stalled, she said construction activity will likely slowdown in the region. In fact, the region’s labour market lost another 1400 jobs over the first quarter of 2017.
And with continued uncertainty over commodity prices and trade negotiations, MacNeil said it is likely that northwest B.C. may be in for a period of slower economic growth in the near-term.