ETSI-BC is pleased to share an Economic Analysis of the BC Southern Interior, prepared by CIEL, the Centre for Innovative & Entrepreneurial Leadership.  This report draws on the data used by ETSI-BC’s regional economic dependencies data tool, EDD, and supplemented by 2011 Census data, for context. The data analysed for this report is based on the 2021 Census, conducted in May 2021, during COVID.  While the timing of that Census skewed some of the data, there are many conclusions from this analysis that are meaningful for the region today. The next Census in May 2026 should be revealing.

About the Region

The BC Southern Interior has a diverse and growing economy. In terms of total income, it would rank in the top 50% of countries – 89th of 196 countries – slightly more than Libya, Venezuela, Latvia, Bolivia and Uganda, and more than double that of Iceland.  At approximately 151,919 square km^[1],  the Southern Interior would also rank among the top 50% of countries in terms of size, two times larger than Ireland and Scotland combined, twice the size of New Brunswick and Panama, and more than seven times the size of Israel.

Trends

The Southern Interior region experienced the highest population growth rate of all BC regions during the period studied, and more than BC itself (9.9% vs 7.6% for BC) from 2016 to 2021, growing to more than 758,000 people. The region also experienced the highest job growth rate of all BC regions, and more than BC itself (8.2% vs. 5.5% for BC) from 2016 to 2021, adding more than 20,000 jobs to almost 350,000 total jobs.

Broad Conclusions

The report summarizes many important features of the Southern Interior economy. It also identifies some key features that are of importance to policy-makers, political leaders and economic development practitioners. These broad conclusions are summarized here and more detail can be found in the report.

1. Over-Reliance on the Public Sector

More than sixty percent – 12,000 of 20,000 – of the jobs created in the Southern Interior in the last Census period (2016-21) were public sector jobs. Clearly this is unsustainable.

To put the number of public sector jobs into perspective, Canada has 21.1% of its total workforce in the public sector while BC has 24.2%, the Southern Interior 23.9% (see further breakdown of Public Sector Jobs in Section E). The Netherlands has 13.4% of its workforce employed in the public sector, and Germany has 15.3%.

With pushback from the electorate, increasing levels of federal and provincial deficits and accumulated debts (and the associated increasing debt servicing obligations), tariff threats from abroad, it is likely that the expansion of the public sector cannot continue for long. Given the unsustainability of expansion, and the likelihood of public sector contraction, our heavy reliance on the public sector for job growth poses a threat to the long-term economic prospects of the Southern Interior region.

2. An Older Population Means Less Economic Dynamism

In the coming years, an older population will likely slow economic growth in the Southern Interior because of lower labour participation rate of older populations, unless this is reversed by in-migration. The aging population might represent the biggest single threat to the economy of the Southern Interior.

3. Tourism Amenities and Services Need to Keep up with Promises

While the Southern Interior weathered the COVID-19 storm better than other regions, there is still much work to be done, especially in developing other tourism services and amenities that keeps up to a growing demand. Communities need to be partnering with neighbours (First Nations, other neighbouring communities and regional partners, other non-profits, etc.) to develop not only solid experiences but also retail services, food and beverage, transportation, entertainment and recreation amenities. Statistics point to underdeveloped opportunities in these areas relative to accommodations. Communities and regions also need to consider branching into niche tourism markets (e.g. agri-tourism), building on local assets while reducing reliance on volatile industries.

4. Need for Diversification of Regions and Communities

The current tariff dispute with the United States demonstrates the need for the country, provinces, regions and communities to do everything possible to diversify their economies.

The Southern Interior has economically benefitted from significant in-migration over the last decade. Growing populations tend to mask underlying economic issues as communities grow to accommodate newcomers. However, with high housing and accommodation costs relative to the other provinces (historically a source of new migrants) and a tightening of immigration policies, this tap may soon get turned off, possibly revealing underlying structural issues – e.g. an aging population not in the workforce, underperforming sectors, lack of investment in businesses and sectors. The region needs to be proactive in increasing productivity, supporting businesses and attracting investment in order for prosperity to continue.

5. Solid Economic Development Research, Planning and Execution

Communities and regions must know their economies, be proactive in developing them and use all tools at their disposal to research, plan and execute these plans to fully develop their economies and move towards resiliency. The report outlines a number of ways that communities can enhance their economic prospects through proactively planning, leveraging their assets, fostering an entrepreneurial culture, collaborating, investing in emerging sectors, encouraging buy local, tapping into support programs and keeping a long-term view.

READ THE FULL REPORT HERE