According to the CPABC Regional Check-Up, an annual economic report by the Chartered Professional Accountants of British Columbia, Northeast B.C.'s economic prospects will depend on a much needed revival of the resource sector.
"Last year was one of the most challenging in recent history. There was a significant slowdown in major project development activity and our unemployment rate jumped to 9.7 per cent, the highest rate in at least 15 years," said Ben Sander, FCPA, FCA, partner at Sander Rose Bone Grindle LLP in Dawson Creek. "This was due to 1,000 job losses and an increase of 1,700 unemployed people in the region. In addition, delayed investment decisions in oil and gas projects have worn away any optimism about the near-term future of our economy."
Slower activity in the natural gas sector and uncertainty over proposed major projects related to LNG stalled economic activity in the region. Major project investments in the region fell by 2.8 per cent to $37.4 billion over the past year. Jobs were lost in some of the region's key industries, including construction, transportation and warehousing, and trade. Collectively, these industries lost 2,900 jobs in 2016. However, there were some bright spots in the region's labour market. The forestry, fishing, mining, oil and gas industry created 1,300 new jobs in 2016, with half of these created in the oil and gas industry.
"As regional service hubs with the most diversified economies in the region, both Fort St. John and Dawson Creek have seen job creation from activities on Site C and the Montney Formation projects, as well as construction on a number of smaller infrastructure investments," continued Sander, "The reopening of two coal mines late last year also restored some jobs in the communities of Tumbler Ridge and Chetwynd."
Towards the latter half of 2016 coal prices recovered and there was a growing demand for lumber, which were positive developments. Price forecasts for Northeast B.C.'s principal commodities: natural gas, coal, and lumber, are trending positively for 2017 and 2018, which should have a correlating positive impact on the economy. During the first quarter of 2017, total employment in Northeast B.C. increased by 700 jobs.
"Improved commodity prices should help recover some of the jobs lost last year. However, it may be a while before our economy fully bounces back. The U.S. tariff on softwood lumber, as well as uncertainty over natural gas prices and trade negotiations with the U.S. and other countries will continue to dampen our economic outlook for the foreseeable future," continued Sander.
About CPABC Regional Check-Up - Northeast Development Region:
The Northeast Development Region, which encompasses the Peace River and Northern Rockies Regional Districts, had an estimated population of 70,032 residents in 2016.
The CPABC Regional Check-Up reports look at British Columbia's eight Development Regions as a place to work, invest, and live. The reports are available online at: www.bccheckup.com.www.bccheckup.com
About CPA British Columbia
The Chartered Professional Accountants of British Columbia (CPABC) is the training, governing, and regulatory body for almost 35,000 CPA members and 5,000 CPA students. CPABC carries out its primary mission to protect the public by enforcing the highest professional and ethical standards and contributing to the advancement of public policy. CPAs are recognized internationally for bringing superior financial expertise, strategic thinking, business insight, and leadership to organizations.
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