regional check-up 2017 - bccpa.ca · 4 cpabc regional check-up 2017 altogether, our 2016 regional...

www.bccheckup.com 1CPABC Regional Check-Up 2016

REGIONAL CHECK-UP 2017Cariboo Development Region

An Economic Analysis for the Region

Source: CPABC Regional Check-Up 2017. All numbers are from 2016. Increases/decreases are in comparison to 2015 data.

bccheckup.com

Educational Attainment:

59.6% +9.5%

Consumer Insolvencies: Personal Bankruptcies:

2.3 per 1,000 adults or

+5.0%Consumer Proposals:


of labour force has a post-secondary certificate/diplomaor higher (+3.4 ppt)

Job Losses: -600 Industries with the Most Job Losses:

Trade and Accommodation & Food Services (-1,400 each)

Other Services (-1,200)

Information, Culture & Recreation (-1,100)

#1#2

#37.4% > 6.0%CDR BC

10.8% > 8.7%CDR BC

Unemployment: Youth Unemployment:

<+2,000goods jobs

-2,600service jobs

with a value of

Number of Major Projects: 29 $10.7 billion -4 2 reportsto

Business Bankruptcies:

95% and of total value of major projects in CDR are either in the proposal stage or on hold

Major projects data is based on Q3 2016. +/- are in comparison to Q3 2015 data.

-0.8%residents or

Population:

155,418

Recovering commodity prices

+ – =Increase in

construction activityUncertain

economic outlook

FORECAST

Tariff on softwood lumber

HIGHLIGHTS

WORK

INVEST

LIVE

Cariboo

Cariboo Development Region (CDR)CPABC Regional Check-Up 2017

www.bccheckup.com 3

Executive Summary

declined in 2016 for the second consecutive year.

Employment sank to a seven-year low of 78,800 jobs,

and both the general and youth unemployment rates

increased to 7.4% and 10.8% respectively.

On the investment side, the value of major projects

under construction declined in 2016 as one project

wrapped up and two smaller projects began

construction. An increase in residential and commercial

construction, however, generated additional

employment for the Cariboo’s construction workers.

Although the last two years have been difficult for many

of the region’s service sector enterprises, fewer business

failures were reported in 2016, as entrepreneurs scaled

back and adjusted their business practices to avoid

insolvency.

The Cariboo’s educational attainment rate improved

dramatically in 2016, rising by 3.4 percentage points to

59.6%. This increase can be attributed to more workers

entering the labour force with a university degree, and

a substantial decline in the number of workers without

post-secondary credentials. The latter likely represents

displaced workers who left the Cariboo.

Of some concern is the Cariboo’s personal insolvency

rate. In 2016, this indicator increased by 4.9% to 4.3 per

1,000 adults, the highest rate in the province and well

above the BC average of 2.8 per 1,000 adults. The job

losses that the Cariboo has endured during the past two

years have no doubt been a contributing factor.

British Columbia enjoyed another solid year of economic

performance in 2016 with GDP growth surpassing the

Canadian average for the sixth straight year. Strong

retail sales, a robust housing market, and a solid gain in

the value of exports were the key drivers. BC’s leading

exports were softwood lumber, coal, aluminum, and

natural gas.

In the Cariboo Development Region (Cariboo),

the forestry and mining industries were the main

contributors to the economy in 2016. Production was up

in the region’s sawmills due to increased demand from

the US, a weak Canadian dollar, and a rally in prices.

The region’s three metal mines continued to operate,

benefiting from a rebound in copper prices late in the

year. As a result, the Cariboo’s goods sector was vibrant

in 2016 — all industries expanded, and as a result, many

full-time positions were created.

Unfortunately, spillover effects from the oil and gas

sector downturn in the neighbouring Northeast

Development Region and Alberta persisted. The

Cariboo’s population declined once again, by 0.8%

to 155,418, as displaced migrant workers and others

affected by the downturn left the region in search of

opportunities.

Population outflow, a decline in disposable income, and

the loss of oilfield-generated business reduced demand

in some service industries, triggering more layoffs. As a

result, the number of people employed in the Cariboo

CPABC Regional Check-Up 20174

Altogether, our 2016 Regional Check-Up indicators were

mixed — the Cariboo was a good place to live, work, and

invest for some, but clearly not for others.

Looking at the remainder of 2017, global commodity

demand and price forecasts are mixed due to

uncertainty pertaining to the outcome of Brexit, a

slower economic growth rate in China, and how the

new US presidency will proceed with international trade

relations. Analysts are positive about the outlook for

copper, however, which is great news for the Cariboo’s

three metal mines, and bodes well for the year ahead.1

It is possible this positive outlook for copper may also

revive exploration activity in the region.

While oil prices have improved in recent months, it

is doubtful the price increase will trigger a return to

work in the oilfields. However, as construction activity

picks up at BC Hydro’s Site C Clean Energy Project

in the Northeast Development Region, employment

opportunities may improve for some of the Cariboo’s

displaced workers.

There is no clear picture of how the Canada-US

Softwood Lumber Agreement negotiations will impact

the Cariboo’s lumber producers in 2017. However,

demand for the region’s lumber will likely continue,

given the weaker Canadian dollar, the expectation that

new home construction in the US will rise steadily over

the next two years, BC’s position as a key US lumber

supply source, and the Cariboo’s competitive advantage

of high-efficiency mills.2 On the supply side of things, it

is yet to be seen what the impacts of future reductions

in the sustainable harvest rate, or annual allowable

cut, in the Cariboo will have on the Cariboo’s lumber

producers.

Labour market figures for the first quarter of 2017 show

that the number of people employed in the Cariboo

increased slightly; however, a sizable expansion of the

labour force drove the unemployment rate up to 10%,

the highest monthly unemployment rate in seven years.3

1 Cecilia Jamasmie, “Copper to be Best Performing Commodity of 2017 — Analysts,” mining.com, January 15, 2017.

2 TD Economics, Provincial Economic Forecast, March 27, 2017.

3 Statistics Canada, Labour Force Survey, CANSIM Table 282-0122, April 2017.

www.bccheckup.com 5

Table of Contents

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . .3

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

WORK Indicators . . . . . . . . . . . . . . . . . . . . . . . . . .9

Job Creation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

Unemployment Rate . . . . . . . . . . . . . . . . . . . . . . 12

INVEST Indicators . . . . . . . . . . . . . . . . . . . . . . . . 14

Business and Investment Activity . . . . . . . . . . . 14

Bankruptcies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

LIVE Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Educational Attainment . . . . . . . . . . . . . . . . . . . 17

Consumer Insolvencies . . . . . . . . . . . . . . . . . . . . 18

www.bccheckup.comCPABC Regional Check-Up 2017


previously commuted to Alberta and the Northeast

Development Region for work. At the provincial

level, the population grew by 1.2% in 2016 as more

people moved to BC. Newcomers were primarily from

Alberta and relocated due to that province’s economic

downturn and the attraction of BC’s comparatively

healthy job market.8

2016 marked another solid year of economic

performance in BC, with GDP advancing by 3.3%,

surpassing the Canadian average for the sixth

consecutive year.9,10 Much of 2016’s growth was

generated by a robust housing market, a rise in retail

sales, and a sizable gain in the value of exports.

Increased demand driven by a housing boom in the

US, a weaker Canadian dollar, and a rise in commodity

prices helped to boost BC’s exports by 9.9%, or $3.5

billion, in 2016.11,12 Softwood lumber remained BC’s main

export, representing just over a quarter of the total

value, with about two-thirds shipped to the US.13 Other

top-valued export commodities were coal, aluminum,

and natural gas.

BC’s economic strength in 2016 translated into

impressive employment gains, with the province

enjoying its largest annual employment growth in more

than a decade.14

The Cariboo Development Region

(Cariboo) is situated in the Central

Interior of British Columbia and

comprises the Cariboo and Fraser-Fort George

regional districts. With a total land area of 131,286 km2,

the Cariboo accounts for 14.2% of the provincial land

base; approximately 3.3% of BC’s population lives in this

development region.4,5 It is estimated that the Cariboo’s

population declined by 0.8% to 155,418 residents in

2016.6 Its largest population centres are Prince George

with 74,003 residents, Williams Lake with 10,753

residents, and Quesnel with 9,879 residents.7

The Cariboo has consistently experienced an outflow of

residents for the better part of the past two decades.

The decline in 2016 largely reflects out-migration

to other areas of BC that offered better economic

opportunities, especially for the region’s workers who 4 Statistics Canada, Census 2016.

5 Statistics Canada, Estimates of Population by Economic Region, Sex and Age Group for July 1, Based on the Standard Geographical Classification 2011, Annual, CANSIM Table 051-0059.

6 Statistics Canada population estimates for the Cariboo have been revised since the Regional Check-Up 2016 report.

7 Statistics Canada, 2016 Census of Population.

8 Statistics Canada, Interprovincial Migrants, by Province or Territory of Origin and Destination, Annual, CANSIM Table 051-0019.

9 Estimate, TD Economics, Provincial Economic Forecast, March 27, 2017.

10 RBC Economics, Provincial Outlook, December 2016.

11 Jen Skerritt, “Housing Boom Spurs Canada Lumber Surge as U.S. Mulls Import Duty,” Bloomberg, July 28, 2016.

12 BC Stats, Annual BC Origin Exports, March 2017.

13 BC Stats, Exports, Issue 16-12, released February 7, 2017.

14 Statistics Canada, Labour Force Survey Estimates (LFS), Employment by Economic Region Based on 2011 Census Boundaries and North American Industry Classification System (NAICS), Annual, CANSIM Table 282-0125.

Cariboo

www.bccheckup.com 7

With its wealth of natural resources, the Cariboo’s

economy is highly dependent on forestry- and mining-

related activities and is susceptible to global price

and demand fluctuations. During the past decade, the

Cariboo’s wood products manufacturing workforce has

been reduced by nearly half due to a drop in lumber

demand from the US, the pine beetle infestation, the

implementation of new technology, and a tightening

timber supply in some communities.

Part of the strategy for tackling these challenges has

been to diversify into new areas such as engineered

wood products, biofuels, and wood pellets. In 2016,

an innovative new mill opened in Mackenzie that

specifically processes beetle-killed or small diameter

wood into custom-sized cants for Asian and US

markets.15 Prince George’s Wood Innovation and Design

Centre, built in 2015, also helps to support industry

by researching new uses for wood and creating new

markets for forestry products.

Demand for softwood lumber from the US in 2016

helped to fuel the Cariboo’s forestry industry, which is

known for its efficiency due to significant technology

and process upgrades made over the past decade.

Lumber production in both the Northern and Southern

interior regions of BC was up from 2015.16

For many of BC’s resource-rich regions, the mining

sector experienced another challenging year in 2016

as markets for many commodities remained depressed

and investors encountered difficulty securing capital.

Mine development and exploration was dampened in

the Cariboo, but the region’s three metal mines — Mount

Milligan, Gibraltar, and Mount Polley — remained in

operation. All three benefited from a welcome late-year

spike in copper prices.

The Mount Milligan Mine, which produces copper and

gold, celebrated its third year of production, successfully

completing its ramp-up phase in early 2016.17 The

Gibraltar Mine took advantage of the provincial

government’s five-year power rate deferral program,18

which allowed the mine to maintain its copper/

molybdenum operations during the extended period of

lower copper prices.19 The mine had a successful year

with a 23% increase in copper production over 2015,

and it resumed molybdenum production in the fourth

quarter.20 Two years after the collapse of its tailings

pond, the Mount Polley Mine resumed full operations in

2016.

Despite a solid year in the Cariboo’s resource industries,

overall employment declined for the second consecutive

year. Job losses were spread across several service

sector industries, which offset job creation in the

region’s goods sector. As a result, between 2015 and

2016, the region’s unemployment rate increased by

0.4 percentage points and the number of employment

insurance beneficiaries increased by 11%.21,22

15 Frank Peebles, “Duz Cho Forest Products Opens New Sawmill,” Prince George Citizen, June 14, 2016.

16 Statistics Canada, Lumber Production, Shipments and Stocks, by Canada and Provinces, Monthly, CANSIM Table 303-0064.

17 C.P. Jago, British Columbia Ministry of Energy and Mines, “Exploration and Mining in the North Central and Northeast Regions,” Provincial Overview of Exploration and Mining in British Columbia, 2017.

18 Allows mines to defer up to 75% of their electricity costs based on metal prices. As commodity prices recover, the mines will repay the amounts deferred, plus interest.

19 Taseko, “Taseko Signs Power Cost Deferral Agreement for Gibraltar Mine,” press release, April 11, 2016.

20 Taseko, “Taseko Reports Fourth Quarter Operating Cash Flow of $50 Million,” press release, February 22, 2017.

21 Statistics Canada, Labour Force Survey Estimates (LFS), by Provinces, Territories and Economic Regions Based on 2011 Census Boundaries, Annual, CANSIM Table 282-0123.

22 Statistics Canada, Employment Insurance Program (EI), Beneficiaries by Province, Census Division, Total and Regular Income Benefits, Declared Earnings, Sex and Age, Unadjusted for Seasonality, Annual, CANSIM Table 276-0035.


*Northwest BC is made up of the Nechako and North Coast development regions.Source: CPABC Regional Check-Up 2017. All numbers are from 2016. Increases/decreases are in comparison to 2015 data.

Comparison between Development RegionsCPABC Regional Check-Up 2017

+1.2%

New Jobs in BC:

+73,300

90%

-0.2% to 6.0%

-1.2% to 8.7%

of new jobs created in Mainland/Southwest

Greatest job increasein at least 10 years

Thompson- Okanagan

Other

Vancouver Island/Coast

Youth unemployment is highest inKootenay, Northwest BC, and Northeast,due to job cuts

Mainland/Southwest (+1.6%)

Vancouver Island/Coast (+1.3%)

Thompson-Okanagan (+0.7%)

Northeast (+0.3%)

Kootenay (+0.2%)

Cariboo (-0.8%)

Northwest BC* (-1.3%)

of BC’s residents live in Mainland/Southwest, Vancouver Island/Coast, and Thompson-Okanagan

Uncertaintyover commodity prices

Population in BC: 4,751,612 residents or

Unemployment in BC:

Youth Unemployment in BC:

WORK Total Jobs in BC: 2.3 million

Unemployment Rate across BC:

2015 2016 Change

Northeast 5.9% 9.7% +3.8%

Kootenay 7.4% 8.0% +0.6%

Thompson-Okanagan 6.4% 7.8% +1.4%

Northwest BC* 7.0% 7.7% +0.7%

Cariboo 7.0% 7.4% +0.4%

Vancouver Island/Coast 6.3% 5.8% -0.5%

Mainland/Southwest 6.0% 5.5% -0.5%

BC 6.2% 6.0% -0.2%

Potential international trade policy changes

Slower housing market

Cautious optimism for BC’s economyin 2017

+ + =

Mainland/Southwest

FORECAST

64.6%

9.5% 10.4%

15.4%

~ 94%

DEMOGRAPHICS

www.bccheckup.com 9

The overall value of building permits increased by 41% in

2016 in contrast to tepid growth of 1% at the provincial

level.27 After two years of fewer job opportunities in

the construction industry, this was no doubt a welcome

change for the Cariboo’s tradespeople.

In contrast, job losses battered seven of the Cariboo’s 11

service sector industries in 2016. The overall decline of

2,600 jobs drove service sector employment down to a

seven-year low of 54,200 jobs.28

The trade and the accommodation and food services

jobs declined by 1,400 workers each in 2016. A small

increase in jobs at the wholesale trade level was

insufficient to offset substantial layoffs made by the

region’s retail businesses. In the accommodation

and food services industry, much of the employment

decline took place in the region’s eating and drinking

establishments.

The “other services” industry lost an estimated

1,200 workers in 2015 and again in 2016, primarily in

operations that provide repair and maintenance, as well

as personal and laundry services.29 Other employment

declines in the Cariboo occurred in the information,

culture and recreation; finance, insurance, real estate

and leasing; and public administration industries where

a collective loss of 2,200 jobs was reported.

Job Creation

The Cariboo’s labour market

retracted again in 2016 with the

loss of 600 jobs, a decline of 0.8%

that edged total employment down

to 78,800 jobs.23 This is the lowest

employment level the Cariboo has

experienced since 2009, when the region fell into a

recession after the US housing bust and subsequent

decline in lumber demand.

It was not all bad news in the Cariboo’s labour market in

2016, as some industries expanded their workforce. The

goods sector was vibrant, with all industries reporting

job growth.24 Overall, 2,000 jobs were created, bringing

total employment in the sector to 24,600 positions.25

This was a positive turnaround from the ongoing job

loss the sector incurred from 2013 to 2015.

The forestry, fishing, mining, oil and gas industry

generated the largest share of employment growth in

the goods sector, expanding by 900 new jobs. Both the

mining and oil and gas extraction and the forestry and

logging sub-industries contributed to job creation, with

many new workers hired in the latter part of 2016.26

The creation of 600 jobs in the construction industry

was primarily driven by an increase in commercial and

residential building in Prince George and Quesnel.

WORK Indicators


24 Data for industries with employment estimates below 1,500 is suppressed.


26 Statistics Canada, Labour Force Survey Estimates (LFS), Employment by Economic Region Based on 2011 Census Boundaries and North American Industry Classification System (NAICS), Monthly, CANSIM Table 282-0124.

27 BC Stats, British Columbia Building Permits for Development Regions and Regional Districts, by Type 2006 – 2016, February 7, 2017.


29 There is insufficient data to conclude if the other sub-industries have contributed to the employment decline.


30 Nelson Bennett, “North’s Economic Boom Goes South,” Business in Vancouver, August 23, 2016.

31 Derek Clouthier, “Alberta’s Weak Economy Spilling Over to Other Western Provinces,” trucknews.com, January 5, 2016.

32 Sampling error in both 2015 and 2016 may account for part of the large variations in reported job creation and job loss in these industries.


Job creation in many of the foregoing service industries

can be sensitive to population, economic, and income

changes. The economic downturn in the neighbouring

Northeast Development Region has shut down or

resulted in downsizing of many suppliers to the oilfields

in that region, with the effects undoubtedly spilling

over to some Cariboo businesses.30 This, coupled with

a decline in disposable income due to job losses and

an outflow of residents, has reduced demand for some

services, and has resulted in further job cuts in an effort

to control costs.

Several service industries reported substantial

employment gains in 2016. The transportation and

warehousing industry rallied with the addition of 1,300

workers, after four years of declining employment. Most

of 2016’s job creation was in the trucking sub-industry,

which has been suffering from driver shortages across

the province.31

Employment in both the educational services industry

and the professional, scientific and technical services

industry rebounded following a slump in 2015. In

educational services, a total of 1,200 new jobs were

reported in 2016, with new opportunities created

in elementary and secondary schools and by other

educational services employers.32 The professional,

scientific and technical services industry expanded by

1,100 new jobs.

Other new jobs created in the Cariboo’s service sector

in 2016 were in health care and social assistance,

specifically ambulatory health-care services and

hospitals, which added 600 new workers.

Job creation in the Cariboo’s goods-producing

industries is, by and large, positive news, as occupations

in this sector are generally higher paying than many

in the service sector. The Cariboo’s goods sector now

supplies 31% of all the region’s jobs, compared to 26% in

2011 and 20% at the provincial level.33

At the provincial level, 73,300 new jobs were created

in 2016, an increase of 3.2%, due to substantial

employment gains in the Mainland/Southwest and

Vancouver Island/Coast development regions. Although

the Cariboo lost jobs, the Kootenay and NOrtheast

development regions lost more jobs.

See our summary infographic for regional comparisons.

www.bccheckup.com 11

Table 1-1: Employment, Cariboo Development Region, 2011 to 201634

Job Creation (000)

2011 2012 2013 2014 2015 20165-Year2011-16

1-Year2015-16

TOTAL EMPLOYMENT (000) 81.1 84.7 81.6 85.3 79.4 78.8 -2.3 -0.6

Goods-Producing Sector (000) 20.9 26.2 24.1 23.5 22.6 24.6 +3.7 +2.0

Agriculture x x x x x 1.6 n/a n/a

Forestry, fishing, mining, oil and gas 4.2 6.8 6.1 6.9 5.7 6.6 +2.4 +0.9

Utilities x x x x x x n/a n/a

Construction 6.7 6.9 7.7 6.2 6.3 6.9 +0.2 +0.6

Manufacturing 8.4 11.1 9.4 9.2 9.2 9.4 +1.0 +0.2

Services-Producing Sector (000) 20.9 26.2 24.1 23.5 22.6 24.6 +3.7 +2.0

Trade x x x x x 1.6 n/a n/a

Transportation & warehousing 4.2 6.8 6.1 6.9 5.7 6.6 +2.4 +0.9

Finance, insurance, real estate & leasing x x x x x x n/a n/a

Professional, scientific & technical services 6.7 6.9 7.7 6.2 6.3 6.9 +0.2 +0.6

Business, building & other support services 8.4 11.1 9.4 9.2 9.2 9.4 +1.0 +0.2

Educational services 5.5 5.9 5.9 5.6 6.8 5.0 -0.5 -1.8

Health care & social assistance 9.1 10.2 10.7 10.0 10.0 8.7 -0.4 -1.3

Information, culture & recreation 2.3 2.4 2.3 1.9 2.9 2.9 +0.6 0.0

Accommodation & food services 5.6 6.2 6.3 7.4 6.4 6.4 +0.8 0.0

Other services 4.0 2.7 3.1 3.2 5.4 4.2 +0.2 -1.2

Public administration 3.3 3.5 2.4 4.0 3.4 3.6 +0.3 +0.2

Source: Statistics Canada, Labour Force Survey Historical Review

34 Industries with an “x” are estimated to have less than 1,500 employed at that particular point in time; as a result the numbers presented in the table may not add up to total sector figures, and job creation statistics cannot be calculated.


Unemployment Rate

The unemployment rate is defined as the unemployed

share of the labour force that is actively seeking

employment and willing to work. In 2016, the Cariboo’s

unemployment rate increased by 0.4 percentage points

(ppt) to 7.4%. In contrast, the provincial average rate

declined by 0.2 ppt to 6.0%, spurred on by buoyant

labour markets in the Mainland/Southwest and

Vancouver Island/Coast development regions.

Although the size of the labour force in the Cariboo

declined by 500 in 2016, the number of available jobs

still fell short, resulting in an increase in the number

of unemployed individuals. Some individuals left the

Cariboo in search of new opportunities, while others

withdrew completely from the labour force. The number

of employment insurance beneficiaries grew by 11%.35

2016 was the third consecutive year that the Cariboo’s

unemployment rate grew, widening the gap with the

provincial average to 1.4 ppt.

Nonetheless, the Cariboo’s provincial standing in this

indicator advanced from the second highest in 2015

to the third lowest in 2016, due to four development

regions reporting a larger one-year increase. As some

of the Cariboo residents have been employed in the

Alberta and Northeast oil and gas sectors it is not

unexpected that the Cariboo would experience an

increase in their unemployment rate given the reduced

economic activity in the Cariboo and Alberta resource

sector.

The Mainland/Southwest enjoyed the lowest

unemployment rate at 5.5%, followed by Vancouver

Island/Coast at 5.8%. In contrast, the Northeast

sustained a shocking one-year increase of 3.8 ppt, and

reported the highest unemployment rate in the province

at 9.7%.


Table 1-2: Unemployment Rate, Cariboo Development Region, 2011 to 2016

Percentage Point (ppt) Change

Region 2011 2012 2013 2014 2015 20165-Year2011-16

1-Year2015-16

Cariboo 7.5 7.0 5.9 6.0 7.0 7.4 -0.1 ppt +0.4 ppt

British Columbia 7.5 6.8 6.6 6.1 6.2 6.0 -1.5 ppt -0.2 ppt

Source: Statistics Canada, Labour Force Survey, Custom Table.

35 Statistics Canada, Employment Insurance Program (EI), Beneficiaries by Province, Census Division, Total and Regular Income Benefits, Monthly, CANSIM Table 276-0035. Author’s note: Part of this increase, however, may be attributed to extended benefit periods for northern BC claimants in 2016.


Table 1-3: Youth (Aged 19 to 24 Years) Unemployment Rate, Cariboo Development Region, 2011 to 2016


Region 2011 2012 2013 2014 2015 20165-Year2011-16

1-Year2015-16

Cariboo* 12.7 14.0 11.7 10.1 10.7 10.8 -1.9 ppt +0.1 ppt

British Columbia 11.8 11.3 10.7 9.2 9.9 8.7 -3.1 ppt -1.2 ppt

Source: Statistics Canada, Labour Force Survey, Custom Table.

In 2016, the Cariboo’s youth unemployment rate inched

up by 0.1 ppt to 10.8%. Contrary to last year’s trend

in several other development regions, there was an

increase in the number of employed young people in the

Cariboo.

The positive effect of this job creation was offset,

however, by an expansion of the labour force of youth

aged 19 to 24, leaving more youth unemployed than in

2015.

At the provincial level, the youth unemployment rate

declined by 1.2 ppt to 8.7%.

Despite last year’s decline in the Cariboo’s youth labour

market, the region managed to achieve the fourth-

lowest youth unemployment rate in BC in 2016. This

was parimarily due to large youth unemployment

rate increases of 4.0 ppt and 3.4 ppt in the Northeast

Development Region and Northwest BC.

The province’s highest youth unemployment rate was

18.6%, recorded in the Kootenay Development Region.


*Unemployment rate calculated by author.


Between Q3 2015 and Q3 2016, the value of the

Cariboo’s proposed investments decreased by $816

million, largely due to the revaluation of the Trans

Mountain Pipeline expansion project from $5.4 billion to

$4.5 billion. Two new developments were also added to

the inventory of projects proposed for the Cariboo:

• Biofuel facility, Prince George, Canfor Corporation and Licella ($70 million); and

• Compressed natural gas transit operations and maintenance facility, Prince George, BC Ministry of Transportation and Infrastructure and BC Transit

($19 million) — start Q4 2016, finish Q4 2019.

The transit facility, which is intended for the

maintenance and operation of city buses, is the only

major project scheduled to proceed in 2017.

The value of projects under construction decreased by

$39 million between Q3 2015 and Q3 2016. During the

same period, two projects began construction:

• Highway 97 Salmon River Bridge replacement, Prince George ($20 million) — start fourth quarter 2016, finish fourth quarter 2017; and

• North Cariboo Arena Replacement Project, Quesnel ($21 million) — start third quarter 2016,

finish fourth quarter 2017.

The value of the Cariboo’s on-hold projects decreased

by $70 million between Q3 2015 and Q3 2016.The North

Cariboo Arena, began construction and the $40 million

Spruce Hills Resort and Spa expansion project near 108

Mile Ranch was moved forward to the proposal stage.

INVEST Indicators

Business and Investment Activity

Investment in Non-

Residential Construction

Capital investment in

industrial, commercial, and institutional infrastructure

fuels job creation and boosts long-term labour

productivity and economic growth.

Low oil prices and ongoing investor uncertainty

hindered capital investment in Canada in 2016. BC’s

overall investment in non-residential construction shrank

by 1.9% to $1.41 billion between 2015 and 2016. While

spending on institutional, governmental, and industrial

projects declined during this period, commercial

building investment grew.36

Inventory of Major Capital Investment Projects

The value of BC’s Major Project Inventory of capital

projects in the proposal phase, under construction,

completed, and on hold also declined in 2016.37 Between

the third quarter of 2015 (Q3 2015) and the third quarter

of 2016 (Q3 2016), the estimated value of these projects

dipped by 2.7% to $437.7 billion.38

In the Cariboo, the total value of major projects declined

by almost $1.0 billion (or 7.8%) from $11.7 billion in Q3

2015 to $10.7 billion in Q3 2016.39 As of September 2016,

there were 29 projects listed, the same number as in

September 2015. Twenty projects with a value of $8.9

billion were in the proposal stage, three estimated at

$481 million were under construction, one project worth

$40 million was completed, and five projects worth $1.3

billion were on hold.

36 Statistics Canada, Investment in Non-Residential Building Construction, by Type of Building, Province and Census Metropolitan Area, Quarterly, CANSIM Table 026-0016, February 16, 2017. Preliminary estimate. Fourth quarter 2015 to fourth quarter 2016. Excludes engineering construction.

37 Only projects with an estimated value over $15 million, or $20 million in the Lower Mainland area, are included.

38 BC Ministry of Finance, BC Major Projects Inventory, September 2016.

39 BC Ministry of Finance, BC Major Projects Inventory, September 2015 and September 2016.

40 A $40-million hotel and condo development in Prince George (duplicate entry) was removed from the Major Project Inventory. Source: Email, February 20, 2017, Ministry of Jobs, Tourism and Skills Training.


Table 1-4: Business Bankruptcies, Cariboo Development Region, 2011 to 2016

Change

2011 2012 2013 2014 2015 20165-Year2011-16

1-Year2015-16

Cariboo 3 2 1 2 6 2 -1 -4

British Columbia 192 198 189 200 154 149 -22.4% -3.2%

Source: Office of the Superintendent of Bankruptcy Canada.

Bankruptcies

The trend in business bankruptcies indicates the health

of a region’s business climate. Business failures arise

from a variety of circumstances, the most common

being unable to manage a reduction in business during

an economic downturn.

Between 2015 and 2016, the number of business

bankruptcies in the Cariboo declined by four to two

reports. The number of reported business bankruptcies

in 2016 is comparable to data from 2011 to 2014. In 2015,

however, there was a spike in business bankruptcies;

this jump coincided with substantial job losses and a

subsequent decline in consumer and industry spending.

A return to a typical level of business failures in 2016

may indicate that weaker operations have shut down,

and the remaining entrepreneurs are adjusting business

practices to become more resilient.

At the provincial level, the number of reported business

bankruptcies fell by 3.2% in 2016, from 154 to 149

reports. This is the lowest level in the past five years and

represents a 22.4% reduction from 2011.



Comparison between Development RegionsCPABC Regional Check-Up 2017

*Northwest BC is made up of the Nechako and North Coast development regions.Source: CPABC Regional Check-Up 2017. All numbers are from 2016. Increases/decreases are in comparison to 2015 data.

Note: Major projects data isbased on Q3 2016. +/- are in comparison to Q3 2015 data.

Personal Bankruptcies:

1.2 per 1,000adults or

Consumer Insolvencies in BC:

Educational Attainment in BC:

Thompson-Okanagan saw the highest increase in business bankruptcy reports

Consumer Proposals:


-20.0%

+6.7%

69.4%

-2.7% to

$437.6 billion-3.2% to

149 reports

341 major projects valued at

LIVE

Mainland/Southwest (71.4%)

Vancouver Island/Coast (69.7%)

Kootenay (67.7%)

Thompson-Okanagan (63.8%)

Northwest BC* (62.9%)

Cariboo (59.6%)

Northeast (53.8%)

Value of all major projects in BC:

Business Bankruptcies in BC:

The Northeast saw the largest increase in the number of consumer insolvencies

#1#2#3#4#5#6#7

are currently under construction (or -3.7%)

$76.6 billion

of BC’s labour force has a post-secondary degree certificate/diploma, or higher (-0.8 ppt)

INVEST


LIVE Indicators

Table 1-5: Percent of Labour Force Aged 25 to 54 with a Post-Secondary Certificate/Diploma or Higher,

Cariboo Development Region, 2011 to 2016


Region 2011 2012 2013 2014 2015 20165-Year2011-16

1-Year2015-16

Cariboo 55.5% 60.1% 56.8% 61.0% 56.2% 59.6% +4.1 ppt +3.4 ppt

British Columbia 65.9% 66.5% 67.9% 68.1% 70.2% 69.4% +3.5 ppt -0.8 ppt

Source: Statistics Canada, Labour Force Survey, Custom Table

Educational Attainment

A post-secondary education

prepares workers to adapt to

new technology and ideas,

to innovate, and to be more

productive. At today’s rate

of technological growth, many workers are not only

required to obtain post-secondary education before

they enter the labour market, they are also expected

to continuously upgrade their skills throughout their

careers. The BC government predicts that more than

three-quarters of projected job openings to 2025 will

require some type of post-secondary education.41 This

will be discussed further in our BC Check-Up focus piece

later in 2017.

After a setback in 2015, the percentage of the Cariboo’s

labour force aged 25 to 54 with post-secondary

credentials rebounded in 2016, rising by 3.4 ppt to

59.6%. This one-year gain was second to that of

Northwest BC, where educational attainment increased

by 4.2 ppt.

The Cariboo’s improvement in educational attainment in

2016 reflects 1,000 new workers with a post-secondary

certificate/diploma or higher in the labour force of

individuals aged 25 to 54, and a substantial loss of 2,500

workers without post-secondary credentials – many of

whom exited the labour force completely. At the post-

secondary education level, the Cariboo saw growth in

the labour force of individuals with a university degree,

and fewer people with a post-secondary certificate or

diploma.

Despite the Cariboo’s improvement in educational

attainment in 2016, the region still trails most

development regions in BC, ranking second to last.

The Northeast Development Region had the lowest

attainment rate at 53.8%, while the Mainland/Southwest

Development Region, with a rate of 71.4%, had the

highest in the province.


41 Province of BC, British Columbia 2025 Labour Market Outlook, July 2016.


Consumer Insolvencies

The consumer insolvency rate, which captures both

bankruptcies and proposals, is defined as the number

of personal insolvencies per 1,000 adults (aged 18 or

older). Indebted individuals may choose to declare

bankruptcy or seek a consumer proposal, which is often

preferred if they have assets or are earning income. This

option allows an indebted person to repay part of their

debt and keep their assets if they continue to make

payments on any loans secured by those assets, such as

a residential mortgage.

The most common causes of consumer insolvencies are

job loss, a decline in income, money mismanagement, a

relationship breakdown, or medical problems. Given the

trend in job losses which the Cariboo since 2013, it is no

surprise that in 2016, the region’s personal insolvency

rate increased for the second consecutive year. Between

2015 and 2016, this rate rose by 4.9% to 4.3 per 1,000

adults due to growth in both personal bankruptcies and

consumer proposals.

The Cariboo was not alone in reporting a higher

incidence of consumer insolvencies in 2016, as all of

BC’s northern regions experienced the same trend. The

Cariboo remained well above the BC average of 2.8

insolvencies per 1,000 adults and posted the highest

rate of consumer insolvency in the province for the third

consecutive year. In BC, this metric declined by 6.7%

in 2016, owing to fewer insolvencies in the southern

development regions.


Table 1-6: Annual Consumer Insolvency Rate per 1,000 Adults (Aged 18 Years and Older),

Cariboo Development Region, 2011 to 2016


Rate 2011 2012 2013 2014 2015 20165-Year2011-16

1-Year2015-16

Cariboo

Insolvency 4.0 4.0 3.9 3.9 4.1 4.3 +7.5% +4.9%

Bankruptcy 3.0 2.7 2.6 2.3 2.1 2.3 -23.3% +9.5%

Proposal 1.0 1.3 1.3 1.6 2.0 2.1 +110.0% +5.0%

BC Insolvency 3.2 3.2 3.1 3.0 3.0 2.8 -12.5% -6.7%

Source: Office of the Superintendent of Bankruptcy Canada and Statistics Canada.


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CPABC Regional Check-Up — Cariboo

As leaders in analyzing and validating information, CPAs are often called upon to provide independent,

fair, and objective information to assist in decision-making. It’s with this goal in mind that the Chartered

Professional Accountants of British Columbia prepares the CPABC Regional Check-Up and BC Check-

Up reports each year. It is our hope that the reports will make a positive public policy contribution to

the province by stimulating debate and discussion about how to make BC a better place in which to

live, work, and invest.

The CPABC Regional Check-Up and BC Check-Up reports, as well as related information, are available

online at www.bccheckup.com.

Staff

Kerri Wilcox, Vice President, External Affairs and Communication, CPABC

Vivian Tse, Public Affairs Specialist, CPABC

Economists

Chisholm Consulting, in association with Gold Island Consulting.

The Regional Check-Up — Cariboo report is edited by Vivian Tse. Creative layout, infographics, and

graphics used in this report are done by Linda Mitsui of Profile Design Group Inc.

Opinions expressed in the CPABC Regional Check-Up — Cariboo do not necessarily reflect those of

individual chartered professional accountants.

CPABC Regional Check-Up

#800 - 555 West Hastings Street

Vancouver, BC V6B 4N6

Tel: 604.872.7222

Fax: 604.681.1523

Toll free in BC: 1.800.663.2677

www.bccpa.ca

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