Trent Ernst, Editor
The annual Chartered Professional Accounts of BC (CPABC) Regional Checkup is out, and no surprise, 2015 was a tough year for Northeastern BC.
“Depressed mineral and oil and gas prices and Alberta’s economic downturn have impacted our region’s economy. While there were 18 proposed liquefied natural gas (LNG) projects in northern B.C., none of them received the approval to proceed. In addition, several coal mine and wind projects have been put on hold indefinitely. These factors have impacted communities like Chetwynd and Tumbler Ridge. And until the market improves, it is unlikely that these projects will begin construction,” said Ben Sander, FCPA, FCA, partner with Sander Rose Bone Grindle LLP in Dawson Creek.
“However, despite uncertainty over proposed LNG projects, there is some good news. Veresen Inc. and AltaGas Ltd. are investing in new gas processing plants near Fort. St. John and Dawson Creek; these projects will bring billions of dollars of investment to our region.”
In Tumbler Ridge, the coal industry remained stagnant throughout 2015 and into 2016. Four of the region’s metallurgical coal mines owned by Anglo American and Walter Energy ceased operations between 2014 and 2015, with no signs of restarting.
In January, Walter Energy announced that it is selling its three idled mines in the region as part of bankruptcy proceedings. Anglo American also announced that it’s getting out of the coal business and is planning on selling its Trend and Roman properties when the prices come back.
These factors affected unemployment, population numbers, and housing prices. Last year, the region saw a decline of 860 residents from the region, not including a significant temporary workforce that lives in industry camps, hotels, and motels near project sites.
The average price of a single detached home in Fort St. John declined by 32.5 per cent to $373,000 between the 2014 and 2015. And although the region saw a creation of 1,600 jobs in 2015, the unemployment rate increased by one percentage point to 5.9 per cent. This was due to job losses in the mining and oil and gas industries and an increase in the size of the labour force by 2,000 people.
“Although the Site C project is expected to generate employment and economic opportunities for our region, it is uncertain whether these benefits will be immediate. The project began construction in late 2015,” continued Sander, “The Site C project alone will not have much positive impact on our economy. Given our strong economic ties with Alberta, we will be faced with some economic challenges this year and into 2017, and expect very little job creation over this period of time. Higher oil prices are expected for 2017, which should positively impact Alberta’s economy and in turn, bring corresponding benefits to our region.”
According to the report, capital investment between September 2014 and September 2015 increased by approximately 16.8 per cent to $37.1 billion. The value of projects that are on hold increased by $2.3 billion due to coal, wind power, and natural gas projects that are waiting for approval.
Other findings include: the share of Northeast BC’s labour force between the ages 25 and 54 with post-secondary credentials increased by 1.2 percentage points to 53.8 percent. This is well below the provincial average of 70.2 percent.
Consumer insolvency in Northeast BC increased by 29.4 per cent to 2.2 per 1,000 adults (aged 18 and over) after five consecutive years of decline. The region still enjoys one of the lowest consumer insolvency rates in B.C., but the increase is concerning as it indicates that the economy is slowing which may lead to job losses and higher unemployment.
The Northeast Development Region, which encompasses the Peace River and Northern Rockies Regional Districts, had an estimated population of 68,595 residents in 2015.
For more information, visit www.bccheckup.com.