Exploring Major Projects in British Columbia

British Columbia is at a crossroads. For the past several years, major projects have been a significant pillar of B.C.'s economy, creating tens of thousands of jobs and injecting billions through procurement spending. However, as many of these projects reach completion, the province faces a crucial juncture that demands strategic foresight and careful planning.

The Economic Pillars: $80 Billion Boost

Over the last decade, the construction of four major energy projects, collectively valued at an impressive C$80 billion, has fortified B.C.'s economic foundation.

These four projects include the Coastal Gaslink pipeline, which is physically complete; the LNG facility in Kitimat, which is 85% complete; the Trans Mountain expansion project slated for service in Q1 2024; and Site C, which construction activities are scheduled to be completed by 2025. The completion of these projects marks both an accomplishment and a challenge for the province

The Major Projects Inventory (MPI), a comprehensive list of projects exceeding $15 million, reveals a shifting tide. Between the second quarters of 2022 and 2023, there's a notable $27 billion dip in activity – a transition from $388 billion in Q2 2022 to $361 billion in Q2 2023. It is concerning that there are no imminent projects on the MPI of the size and scope of the four mentioned above that are ready for FDI and capable of creating thousands of jobs immediately.

Jobs at Crossroads: Completion and Closure

While the completion of these major projects also comes with the realization that numerous well-paying jobs, especially in rural areas, will soon conclude. Estimates suggest that the completion of just those four projects could impact between 25,000 to 30,000 jobs – families, livelihoods, and a substantial segment of the private sector.

The concern looms large regarding the need for the next wave of private sector investment to sustain growth and wages for British Columbians.

The Road Ahead: Investing in Tomorrow

To address the challenge of no impending wave of private sector investment, B.C. must strategically cultivate conditions that attract businesses and sustain economic growth. Collaboration between all levels of government and the private sector becomes paramount to facilitate the region's growth, ensuring a prosperous and resilient future for all its residents.

Our recent reports on the industrial land shortage and government-imposed costs look at some ways for this to occur. For example, the Counting the Costs: Assessing Economic Challenges for Businesses in British Columbia identifies that between 2022-2024, the provincial government imposed an additional $6.5 billion in costs, whilst our Industrial Land Shortage report found that despite only making 4.5% of land use in Metro Vancouver it accounts for a third of regional GDP and more than one-in-four jobs (27%) in the region.

Increasing the payroll tax threshold can ensure that local businesses aren't taxed when they seek to increase their payroll, raise wages or hire more staff. Furthermore, in these uncertain economic times, if we want investment to flow to B.C., we need to unburden businesses of unnecessary regulatory red tape, stifling their ability to grow. We need to find ways of efficiently and expeditiously getting to a regulatory decision that provides clarity and certainty to capital markets.

According to estimates, the carbon tax has been a net tax to businesses of nearly $2 billion in just three years. If we revert back to revenue neutrality, we can recycle the revenues back into local, made-in-B.C. technology and emissions reduction efforts, we can ensure that B.C.'s business sector is primed to propel us toward a sustainable and prosperous future.

Meanwhile for every one per cent increase in land available for jobs and production, our study estimates that an additional 126,100 jobs are created and $12.2 billion in GDP is generated for B.C.

This is not just about securing investments but about securing the future prosperity of the province. Creating a collaborative partnership between the government and the private sector is key to advancing the major projects that will define B.C.'s economic landscape. Creating an environment conducive to private sector involvement ensures a steady flow of investments, job creation, and sustained economic vibrancy.