Northern Development Initiative Trust has released its annual State of the North Economic Report, and the results are mixed, at best.
The report looks and a number of Northern BC’s key economic sectors— housing, employment, mining, forestry and more—and projects the futures for these industries.
There are some bright spots, Like Site C and LNG Canada, but the forest sector continues its decline. As well, the unemployment rate in the north is at 5.8 percent, which isn’t bad, but is 1.1 percent higher than the provincial aver- age. In the Northeast, unemployment is even higher, at 6.9 percent.
One of the hardest hit sectors in the last year has been forestry. Softwood lumber exports were down about 25 percent in 2019, based on early estimates. In 2019, three mills were closed permanently, two suffered reduced shifts, four closed indefinitely and a staggering 14 mills have closed temporarily, affecting over 6000 employees.
According to the report, “a strong supply response to record prices led to oversupply in the North American market and in June 2018 lumber prices began to fall.”
In 2019, cold weather and lower than expected housing starts in the US, along with weak export demand from Japan led to further price declines.
And, as prices declined, it meant that softwood lumber tariffs in the US ate away the profit margin to a point that many producers started to lose money.
By mid-July of last year, lumber prices were down 40 percent from their peak in 2016. The regions most affected are the Cariboo- Chilcotin/Lillooet and North Central regions.
Lumber demand is expected to start to rise in the US. however, increased supply from mills in Europe and the US are expected to keep prices low.
In the Energy sector, The Moose Lake Wind Project came online in April of last year. The four-turbine wind farm provides 15,000 kW of installed capacity, and bumps wind power up to 8.5 per cent of generating capacity in Northern BC.
But of course, for Tumbler Ridge, the most important metric is mining, which also had a strong year in 2019. Employment grew from 2900 the year before to 3000 people directly employed in mining in the Northeast.
Metallurgical coal prices were strong in 2018 as demand increased in China and India. As well, global supplies were constrained, forcing the prices higher, and in 2019, export prices were above $7-billion for the first time since 2011, up about 12 percent.
In 2019, the international supply increased, with output from Russia and Columbia increasing. But the price has been relatively stable as demand has also grown.
Tourism was down in 2017 and 2018 due in part to the wildfires, but was up slightly last year, at least passengers flying into the region’s major airports were up.
More worrying, the overall trend for the region is a smaller population, as natural resource industries become more efficient, employing fewer people. This may have stabilized, as the popula- tion has been fairly consistent over the last few years. Projecting this into the future, the report predicts that the pop- ulation of the Northeast will grow at a rate of 0.7 percent, below the predicted provincial rate of 1.1 percent.
Speaking of the Northeast, the report says overall employment increased in the Northeast region in 2018 and remained relatively stable through 2019. The growth comes from the opening of the Willow Creek Mine near Chetwynd.
And, while a number of people were affected by closures at a number of mills in the region, that is offset by increased construction activity related to Site C and the Coastal Gas Link pipeline.
In Tumbler Ridge, the cost of a home went up 4.2 percent year over year, to $113,897, well below the regional average of $269,405, a 9.2 increase from 2018.
