B.C. needs to commit to rural development and resources

Despite decades of debate the province’s rural communities are falling further behind urban centres in economic opportunities

Northern Development Initiative Trust
February 10, 2020


News of mill closures across northern British Columbia in the past year was shocking to anyone but northerners.

What was unexpected was the volume of closures, the result of a perfect storm of U.S. trade action, a decline in exports to China, higher log costs, increased stumpage fees, the loss of timber to the pine beetle infestation and consecutive years of record wildfires.

The good news is that forestry is here to stay. The bad news is that this most recent downturn furthers the narrative that rural communities are economically unsustainable so long as they’re reliant on traditional resource industries.

That brings me to two points.

One, my research shows me we’ve been talking about this problem for at least half a century and we’ve done precious little to solve it.

Two, that line of thinking reinforces the urban myth that the answer must be to move our rural communities away from resource industries (read: shut ’em down).

Truth is, these industries are here to stay due to our abundance of natural resources, our labour pool, integrated supply chain and proximity to market.

If there’s anything we should be focused on when it comes to our resource sector, it is improving its profitability, integrating value-added product development to improve its sustainability, lessening its environmental footprint and providing a stable, inclusive regulatory framework in which it can operate with certainty.

Now, let me get back to that first point – how we go about solving the problem we’ve been talking about longer than I’ve been alive.

Rural B.C. losing ground

First, let’s address the context – rural B.C.’s role as the engine of the provincial economy is fading.

In a good year the resource sector accounts for more than 70 per cent of the value of B.C.’s goods exports.

Yet goods exports themselves account for only two-thirds, or less, of total provincial exports. Service exports, which are largely concentrated in urban areas, are rapidly gaining ground as we transition to a knowledge-based economy.

According to Statistics Canada, service-based industries now account for 70 per cent of Canada’s economic output.

In B.C., you see the decline in the importance of the resource sector reflected in the provincial budget. A quick review of Budget 2019 shows natural resource revenue now accounts for only 4 per cent of provincial tax revenue. In 1999, it accounted for roughly 12 per cent of provincial revenue.

Other trends in northern B.C.’s economy also give cause for concern.

While the population of B.C. increased 9 per cent between 2013 and 2019, in northern B.C. it declined 1 per cent to 331,000.

The populations of Richmond and Delta are roughly equal to the number of people who live in northern B.C., an area the size of France.

And the rural-urban divide is growing.

Strategy for rural development required

What’s needed is a renewed vision for rural development – and we don’t have to reinvent the wheel.

It starts with investing in the people who are already here because they’re the ones most likely to stay.

That means ensuring rural British Columbians can access the education they need for the jobs that are in demand in rural areas.

On the service side, it means that health, education and social service programs need rural delivery models – not urban delivery models adapted to rural settings.

Innovative solutions such as rural-focused internships, co-ops and dual-credit trades training programs for high school students are all models that exist in B.C. and elsewhere, and they can help ensure rural youth have pathways to rewarding lives in small communities and address our ongoing capacity challenges.

Investing in community development should be another area of critical focus – ensuring that our communities are attractive places to live, which means investing in low-cost, multi-use, energy-efficient amenities, upgrading building facades and focusing on initiatives to improve overall quality of life.

Housing is another area of need – many of our remote communities have inadequate housing and can’t attract developers for renovations or new builds.

Innovative solutions, not just for social housing but also for market housing, are needed to ensure we don’t have professionals saying no to jobs because they can’t find a decent place to live.

On the economic infrastructure side, it means we need to ensure there’s a stable, competitive environment – that might mean different tax frameworks for specific zones in B.C. to attract capital, but it certainly means ensuring that existing tax regimes are competitive in key sectors.

It means certainty of timelines for investors – business needs to know how long it’s going to take to get to yes or no and have clear, consistent regulatory processes.

And we need to accept that reconciliation with our Indigenous communities is a multi-generational effort that will require patience, understanding and compromise on all sides.

In B.C., it’s time for a renewed commitment to rural development.

Joel McKay is the chief executive officer of Northern Development Initiative Trust, a non-profit organization that stimulates economic growth throughout northern B.C. McKay can be contacted at joel@northerndevelopment.bc.ca

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