Prince George may be proud blue-collar, but it is building the kind of economic and educational muscle that should quiet any doubts that it is a city poised to play a huge role in the Canadian economy of the 21st century.
Consider mining. Since 2005, Prince George has seen a 116 per cent increase in employment related to mining and oil and gas development, with 1,300 new jobs created. The number of resource-linked businesses has nearly doubled. And mining growth has really just started.
Mining surge
The $917 million Mt. Milligan mine northwest of Prince George is currently under development as the first major mine in B.C. in 15 years. The Dome Mountain mine project is also re-opening, also northwest of the city. Northern B.C., of course, is the centre for B.C. mining, with 10 operating mines, three under development, a dozen proposed projects and 69 major exploration projects underway. Last year nearly $230 million was spent on northern mining exploration - and Prince George is the centre of most of the action.
Important as it is, mining is just part of the widely diversified Prince George economy, according to Tim McEwan, president and CEO of Initiatives Prince George (IPG), a municipally-owned corporation created to encourage development. " We have the opportunity to be the supply chain route of choice between China and the United States ," McEwan said.
Last year Canadian National Railway put in a transmodal and intermodal facility that is now operating at near full capacity, largely due to the Chinese market. To meet rising demand, IPG's key partner, the Port of Prince Rupert, has plans to expand the port's container terminal to two million TEUs, providing Asian shippers a faster route to North American markets. For air cargo carriers, Prince George is positioned on the existing flight route between Asia and North America, making it a strong contender for refuelling and technical stops.
Forestry is back
Prince George was built on the lumber industry and, after some painful years, forestry is back with a vengeance. Local sawmills are humming, the main pulp mill is running full shifts and a nascent bio-fuels industry - using mostly beetle-kill wood - is shipping wood pellets are far as Europe. The real change is the breakthrough into the Asian market for B.C. dimensional lumber after the U.S. real estate collapse.
"The Asian market is enormous," McEwan said, quickly credited Prince George-Mackenzie MLA Pat Bell now minister of jobs, tourism and innovation, for helping to make stick-frame building popular in China. Last year, Shanghai, a city of 25 million, included wood construction in its building code for the first time.
In the U.S., housing starts have fallen more than 50 per cent to the 550,000 unit range annually, but in China one home builder alone started half-a-million homes last year, part of at least eight million homes being built annually in the world's most populous country, Bell told a meeting of the Truck Loggers Association. "A lot of these are six-storey concrete buildings using framing lumber for various purposes like floor joists, infill walls, roof trusses and concrete forming," Bell said.
Forestry giant Canfor Corp., which has pulp mills and sawmills in Prince George, reports that 25 per cent of its dimensional lumber will be shipped to China this year, from nearly nothing five years ago.
Canfor signed an agreement last year to commit the entire output of one lumber mill for a single client in mainland China. The rebuilding of quake-hit Japan, where wood is both popular and scarce, is another major Asian market for northern lumber.
Job magnet
McEwan suggests those Vancouver latte drinkers would be wise to get off their butts and head to where jobs are plentiful and where you can buy a substantial house for the same price as a tiny East Vancouver condo.
At 5.7 per cent, Prince George has an unemployment rate about 3 per cent lower than the B.C. average, with an above average labour force income. The typical detached house price is around $261,000, up 6 per cent from a year ago and far below the provincial average of nearly $590,000.
Said McEwan, who relocated from South Delta: "You can buy twice the house at half the price" compared with anywhere in the Lower Mainland.
Prince George real estate values still reflect the 2008-09 recession, but things could change fast. One clue is that year-to-date housing starts in Prince George are up 127 per cent, compared with a provincewide average increase of 3.8 per cent.
Canada Mortgage and Housing Corp. pegged the apartment rental vacancy rate in the northern city at around 7.5 per cent last October, with the average rent for a two-bedroom at $650. These are, respectively, the highest and lowest rates of any second-tier city in the province.
Landlords, however, may be enticed to invest in Prince George because of both an influx of resource workers and ongoing expansions of the local University of Northern B.C. (UNBC) and the College of New Caledonia.
As well, a job-generating $125 million Cancer Care Clinic is under construction, part of a large regional hospital presence in the city. Based on recent ads in the Western Investor, Prince George apartment buildings are listing in the $60,000 to $70,000 per-suite range, with cap rates north of 7.5 per cent.
Airport
It is the Prince George airport that will play an important role as the city matures into a global transportation hub. Work is completing on a new highway link to the airport that will divide a 3,000-acre logistics park aimed at the burgeoning air cargo market.
The expanded airport - now with the third-largest runway in Canada - can handle 747 cargo planes and already welcomes about 36,000 airline passengers every month. The industrial land is being serviced and carved into lots, but McEwan would not put a price tag on the city-owned lands that will be coming to market shortly. Industrial lots across the region are priced from $30,000 to $40,000 per acre, but some with existing buildings are asking $800,000 an acre, so investors have to look closely at locations.
The bottom line for McEwan, who presents an honest excitement about the potential of Prince George, is that the city of 88,0000 will soon need more workers and more services.
from Western Investor June 2011
