Vancouver Island’s economy is at a critical juncture and it’s time to start shifting our outlook from the short term to the longer term, Susan Mowbray, partner, economics and research at MNP, told attendees at the recent Vancouver Island Economic Alliance Summit.
The annual event was held from October 22 to 24 in Nanaimo. Almost 600 people attended the summit, with 120 speakers and more than 40 exhibitors addressing topics such as sustainable development, strengthening the Island’s supply chain and economic reconciliation. Among them, Mowbray’s keynote speech looked at how factors outlined in VIEA’s economic dashboard will shape the economic landscape of the future.
“The choices we make today are going to determine where we are in the future,” Mowbray told attendees. “So whether that’s positive, whether that’s negative, it’s really going to be determined by what we do in the near term.”
Mowbray spoke of “cracks” in the economy, both in British Columbia and on Vancouver Island.
Prior to the pandemic, she noted, provincial growth in gross domestic product was about 2.5 to three per cent, with the province having some major construction projects on Vancouver Island and Northern B.C. In 2023, GDP was 1.7 per cent, which was below pre-pandemic levels, but was “reasonably good” given all the shocks the world had gone through.
But for 2024, GDP is projected to be only one per cent or less. “That’s not good,” Mowbray said.
Growth in the manufacturing sector has been quite slow, and is expected to slow down even more as major projects, such as the Coastal GasLink pipeline and LNG Canada, are completed. “What this means is that we are not producing a lot of things that are bringing money into the province or the Island from outside,” she said.
Although there is growth in the tourism, knowledge and tech sectors, the resource sector — traditionally the backbone of the Island’s economy — is shrinking. The Island’s last mine closed in December 2023 and the future of salmon farming is unclear.
And although there are 50,000 new jobs on the Island, job growth “is also where we’re starting to see another crack,” Mowbray said, noting that more than half of those new jobs are in public-sector services such as education and health care. “And so here again, we’re seeing signs of increasing dependence on the public sector and limited growth in export sectors that are going to generate income from outside the Island.”
