Last week we heard the unfortunate news that about 100 employees were laid off at the Huckleberry Mine.
The mine had already laid off 20 employees in December 2015 in an effort to reduce costs as copper prices have plummeted over the last few years.
The global economic slowdown has also affected the Endako Mine, near Fraser Lake. The mine, which had operated since 1965, was placed on temporary suspension a little over a year ago due to a continued weakness in the molybdenum market. The mine has laid off about 300 employees and has no plans to reopen any time soon.
The recent layoffs and the uncertainty of the global economy have been causing concern to business owners in the region.
Kyle Thomson, Owner and General Manager of Monster Industries in Houston, said that with the Houston Forest Products sawmill closing in May 2014 and now Huckleberry’s suspension, Monster Industries has lost over $1 million per year in revenue.
Thomson said he expects 2016 and 2017 to be difficult years in Northern B.C.
“I would be lying if I said I wasn’t concerned now,” he said.
Joel McKay, a Spokesperson with the Northern Development Initiative Trust, wrote in the publication ‘Business in Vancouver’ that while the Lower Mainland has barely noticed the current global market slump, the northern half of the province has been facing “headwinds in nearly every community.”
According to McKay, Northern B.C. is used to relying on major projects as a source of economic growth and prosperity. He says that without them, the region must focus on business retention, expansion and diversification. However, he points out that this is a difficult task considering that many of small and medium-sized enterprises in the region are structured for doing business with industry and major projects.
But it’s not all doom and gloom. McKay says tourism was strong last summer, with exchange rates encouraging Americans to visit the north and forcing Canadians to take “staycations.”
In addition, improved beef and hay prices benefited the north’s agriculture sector, and major projects are still happening - the Red Chris copper mine, located south of Dease Lake, opened in 2015 and is working toward full production; Mount Milligan is near full production as well; and Mount Polley has reopened after a tailings pond breach in the Cariboo region. Besides, Huckleberry Mine will retain the balance of its workforce to continue milling stockpiled ore.
The slowdown in resource demand from around the world, most notably in China, also offers a silver lining.
Jeff Rubin, former Chief Economist with CIBC World Markets, wrote in The Globe and Mail that sharply lower commodity prices are offering Canada an opportunity to “push the reset button” on an economy that’s become distorted by an overdependence on resource markets.
“No doubt a downshifting in China’s economic growth will bring short-term pain for Canada, but it also sets the stage for a fundamental reshaping of the country’s economy, as lower commodity prices and a falling exchange rate breathe new life into a beaten-up manufacturing sector,” said Rubin. “Canadians may actually get to enjoy the merits of a diversified economy, one that ultimately will be much more sustainable than the resource-dependent one that today serves them so poorly.”