FORT ST. JOHN, B.C. — The Chartered Professional Accountants of British Columbia released their annual economic report for Northeast B.C., which shows the region’s employment fell for the second year in a row in 2017 due to a subdued economy.
The CPABC’s Regional Check-Up says that regional employment in both the goods and the service sectors declined, bringing down total employment to 38,500, a loss of 600 jobs. The region’s goods sector lost 200 jobs in 2017, due primarily to a decline in the forest, fishing, mining and oil and gas industries. The service sector also saw a decline of 400 jobs, with losses across most industries eclipsing modest gains in the health care and social services and trade industries.
The report adds that at the same time employment fell, there was an outflow of 2,300 workers seeking employment elsewhere. This not only reduced the labour force participation rate, but also significantly cut down the region’s unemployment rate to 5.9 per cent.
“Economic activity in our region is stalled due to the unknown fate of the 20 proposed major natural gas projects here and across northern B.C. Our economy is tied hand-in-hand with the fortunes of the resource sector, particularly with the energy industry,” said Ben Sander, FCPA, FCA, partner at Sander Rose Bone Grindle LLP in Dawson Creek. “While investment has stalled over the past two years, natural gas exploration activity did pick up last year, with spending on petroleum and natural gas drilling and exploration in the region jumping from $15.1 million 2016 to $173.3 million last year.”
Northeast B.C.’s economic prospects will depend on a much needed revival of the resource sector. A slightly promising note is the increase in the value of Northeast B.C.’s major projects inventory. Between the fourth quarter of 2016 and 2017, the total value of all major projects increased by 4.6 per cent to $39.1 billion. The greatest share of these continued to be proposed projects, with 27 projects valued at $18.2 billion.
“There are some budding signs of economic improvement in our region for 2018, including more expenditures on drilling and exploration activity, and more construction and trade jobs. But natural gas prices continue to suffer and are not predicted to improve significantly, which will likely push back any announcement of major new LNG projects. The spectre of trade protectionism in our biggest market, the U.S., casts some doubt on our exports as well, most certainly for the softwood lumber industry,” said Sander.