Major project constructions along with strong commodity prices are expected to help carry Northeast B.C through economic recovery from the COVID-19 pandemic, according to Northern Development Initiative Trust’s 2021 economic report.
The report also highlights mining and natural gas exploration and production as contributing factors in increasing employment in the region.
“This year’s State of the North contains good news, bad news and a lot of uncertainty,” NDIT CEO Joel McKay says in a release.
“Our region is faced with labour shortages, slow population growth and a myriad of other risks from floods, fires and a war in Eastern Europe. However, major project constructions along with strong commodity prices will likely continue to support various industry sectors for the next few years.”
The Northern region is, however, dealing with labour shortages, slow population growth, the war in Ukraine and environmental risks such as fires and floods on top of the pandemic.
Unemployment rates across the province increased dramatically in 2020 due to COVID-19 closing businesses and businesses laying off many employees.
In the northeast, the unemployment rates decreased rather quickly, reaching pre-pandemic levels by the end of the year due to strong employment growth.
The total unemployment rate in the north was at 6.3 per cent in 2019, peaked at 6.5 per cent in 2020, but dropped to 4.6 per cent in 2021.
Employment in the mining, oil and gas sector dropped in 2020 in comparison to past years, but the Northeast region held the highest numbers throughout.
In the forestry sector, employment in the Northeast region stayed pretty consistent from 2016 to 2020, at less than 1,500 employees almost across the board. Forest and logging went from less than 1,000 to less than 500. These numbers are the lowest in Northern B.C.
Job vacancies also jumped up in 2021, from over 5,000 in 2019 to over 10,000 in 2021. The average hourly wage went from $24.34 in 2019 down to $23.58 in 2021.
Average wages in the Northeast region are similar to other parts of Northern B.C., with most being above the living wage from 2019 at $18.29. However, retail salespersons, food and beverage servers and cashiers were the only ones below the living wage, at less than $16 per hour.
Even though the employment rates for the forestry sector in the northeast are low, the harvest volumes in the region have stayed at the top of the pack, though it did slow across the board during the pandemic but still stayed above 2016 levels.
Taylor pulp mill curtailed production in December 2021 due to transportation disruptions from flooding in parts of interior B.C. This curtailment was expected to last for a minimum of four weeks, however, was extended for another six weeks on February 16th and again on March 29th.
For energy, the northeast is home to 10 sector-specific facilities. BC Hydro runs two hydroelectric facilities that represent about 38 per cent of BC Hydro’s total power generated.
There are 41 independent power producers in Northern BC, including eight biomass facilities, four wind farms and twenty hydroelectric dams.
Site C is currently under construction and, according to the report, is expected to be completed by 2025. It was pushed back another year because of the pandemic.
During the pandemic, demand for precious metals increased while industrial metal demands decreased, but these levels soon stabilized. Coal prices did not recover the same, ending 2020 still below pre-pandemic prices.
Natural gas prices reached a record low in 2020 but recovered quickly in 2021. Price increases were because the production of coal decreased worldwide, and there was an increased demand for natural gas as a substitute.
“Extreme weather events and the inconsistent nature of renewable energy are expected to support demand for reliable backup energy sources, like natural gas, in the short to medium term,” claims the report.
LNG Canada is in its fourth year of construction and is also expected to be completed by 2025, and in October of 2021, it reached its 50 per cent completion mark.
The northeast is the only region in the north that has any coal mines, totalling three out of the province’s current nine.
The tourism sector is slowly recovering after suffering thanks to travel restrictions and border closures. It did improve in 2021, but the year also had a particularly bad wildfire season, limiting travel within the province and travel to Northeast B.C. was still restricted in the winter months.
“Looking forward, rising oil prices will increase the cost of all modes of travel. This may delay the return of out-of-province visitors and encourage more B.C. residents to vacation within the province in 2022.”
According to NDIT’s report, northeast farms accounted for 80 per cent of B.C.’s total acreage and export production of grain and oilseed. This region also farms cattle, hogs, bison and other game.
In 2020, producer deliveries of wheat declined by 21 per cent compared to 2019, apparently due to poor weather conditions. 2021 was also challenging, with a 31 per cent decrease for the same period, which was due to drought conditions for most of the summer.
The population in the Northeast region decreased from 2016 to 2021 by 3.4 per cent, while the average in the region increased by 0.6 per cent, which is still significantly lower than other regions in the province.
In most areas of the Northeast region, dwelling numbers were consistent with population trends, but Dawson Creek saw an increase of over forty per cent while the population dropped, resulting in a drop in housing prices.
For the most part, housing prices decreased in the Northeast region, except in Fort St. John. “Prices are expected to stabilize as higher interest rates reduce demand. However, due to sustained demand arising from construction and exploration activity in the region, a significant decline is unlikely.”
For the full report, click here.
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