CPABC in Focus November/December 2014 | Page 12

Cover Story By Marlyn Chisholm Resources: The Driver of BC’s Economy E ach year, CPABC produces the BC Check-Up report to evaluate British Columbia’s overall economic health. Research gathered for the report informs CPABC’s public policy recommendations to government (see page 6) and drives public affairs activities that promote the business and economic expertise of the CPABC membership. This year’s BC Check-Up reviewed the state of the province’s economy in 2013, and created a forecast for 2014. The focus piece in this year’s report looks at the province’s resource sector, which is a key—but often forgotten—player in the BC economy. What we’ve forgotten 2014 BC CHECK-UP BC Check-Up 2014.indd 1 Design Pics/iStock/Thinkstock A digital edition of the BC Check-Up is available at www.bccpa.ca under the News, Events & Publications tab. 14-09-09 5:50 PM British Columbia has witnessed profound changes in its economic structure and trade patterns since the beginning of the 20th century. Over the past 100 years, our province has transformed from an economy primarily reliant on the export of commodity lumber and minerals to one that is far more diversified and dominated by a rapidly proliferating service sector. But what prompted this shift? From its beginning, BC has been a resource producer and exporter, starting with the fur trade in the mid-18th century and timber and gold in the 19th century. Coal, energy, other minerals, and agricultural products subsequently emerged as other key BC exports. Over the past 150 years, the provincial economy has grown and built on these “basic” industries—either directly, in support of industries such as construction, transportation, and wholesale supply, or indirectly, in support of a wide range of services such as retail and accommodation. Traditional resource industries continue to spur development in both the goods and service sectors, and continue to constitute a large part of the economic foundation of this province. However, for the Lower Mainland, the current economy is dominated by a combination of the knowledge economy, tourism, and a vast array of services, and our province’s historic role in the resource sector seems to have receded. It appears that we’ve lost sight of the importance of resources in our economy, particularly in the Lower Mainland and other major urban centres. A snapshot of resource industries today The forest products industry is a major employer on the coast and in the Interior. The industry has seen periods of boom and bust throughout the years as markets and prices varied, with corresponding effects on company revenues, employment, and earnings. The forest industry’s fortunes began to wane in the late 1980s, as revenues slumped and many mills closed, and thousands of jobs were lost permanently throughout the province. As a result, between 1988 and 2012, the forest product share of the value of BC global exports declined from 57% to 32.3%. However, this industry’s fortunes have improved in the past two years. In 2013, solid wood product exports from BC rose by 25.5%, stimulated by renewed demand in the US. Employment in wood product manufacturing rose for the second year in a row. At the same time, however, pulp and paper exports declined slightly. BC’s agriculture and fisheries industries are integral to the resource sector and the provincial economy. Altogether, the value of BC’s agriculture, seafood, and agri-food industries has risen over the past 25 years. In 2013 alone, BC producers exported $2.9 billion worth of products to more than 140 countries.1 BC’s most productive farmlands lie in the Fraser Valley, the Peace River Valley, and the Okanagan Valley, and produce a range of dairy products, livestock, grain, fruit, and vegetables for domestic consumption and national and international export. With the consolidation of farms over the past decade, employment in agriculture has remain Y