Throughout Canada’s history, we’ve seen many areas of the country experience booms. Sometimes it’s one province or another, other times it’s a city or a region. These booms attract massive development, and we look with envy on anyone investing money with the foresight to profit when things heat up. There’s no magical incantation that allows us to peer into the future and know when a boom is coming. Investors who invest early are not fortune tellers, they’re detectives who spot the clues. They look at early data and make an educated guess.
Northeast BC, known as the Peace River Region or Peace Region, is an approximately 300,000 square kilometer region in the top right corner of the province. This rugged aspen parkland is an upside-down triangle, bordered on the north by Yukon and Northwest Territories, on the east by Alberta, and diagonally on the west by the Rockies. This area has a population of 64,000 people and includes municipalities like Fort St. John and Dawson Creek.
What’s interesting about Northeast BC is that it’s largely overlooked. The southern cities in BC earn a lot of newspaper ink for their growth, as do towns and cities throughout Alberta. And yes, those places are growing like crazy; it’s hard to miss those growth stories. But I think tomorrow’s growth story is going to be Northeast BC.
Think of Northeast BC as “the northern Alberta of BC.” Albertans won’t want to hear that and neither will British Columbians but geographically and economically, it’s true. The area is not mountainous – it has more in common with its rugged parkland neighbour to the east, and that hints at why this region is overlooked. It doesn’t have a lot in common with the other regions in the province, and therefore it’s largely misunderstood.
Here are 5 reasons why Northeast BC has a steady, stable economic story right now, and why you should be investing money:
#1. Northeast BC is a key contributor to the provincial economy:
Geographically, this area takes up about a quarter of the province but outpaces other BC regions in its contribution to the provincial economy. Here are a few examples from the North Peace Economic Development Commission: Northeast BC supplies 90% of the province’s grain and over a third of the province’s hydroelectric power. Overall, the region contributes 9% of BC’s total exports even though it has only 2% of BC’s population. What is more, this area contributes $198,500 per worker to the BC economy, which is considerably more than the $35,000 per worker that the average worker contributes in Vancouver.
#2. Northeast BC is a financially affluent region:
According to Statistics Canada, the average annual Canadian income (gross taxable payroll before deductions) in 2013 was about $47,000. In BC, that number was even lower at about $45,000. But according to the North Peace Economic Development Commission, the average income in Northeast BC was $108,000/year.
#3. Northeast BC is highly diversified:
This region sits on top of the third largest hydrocarbon resource in North America and companies from all over the world are looking at this resource to help slake their thirst. However, natural gas is not the only story here. It’s an important grain producer for the province, so farming plays a key role. And if you consider who the top employers are in the region (as reported by the North Peace Economic Development Commission), you’d have to look to the fourth company down the list to find the first energy company. In fact, among the top ten employers in the region, there’s only one natural gas company. The rest are a mix of public and private organizations in categories as diverse as healthcare and government services, forestry, retail, and grocery. And in Fort St. John (the largest city in the area, and one that is highly representative of the entire region), oil and gas accounts for only 16% of the employment base.
As I mentioned in a recent REIN presentation, not only has this diversified economy contributed to the region’s steady growth so far, those investing money in Northeast BC can have the confidence that this diversification will protect the region if new growth doesn’t happen as quickly as we’re predicting.
#4. Northeast BC is replacing the depleted Natural Gass supply:
According to an RBC Capital Markets report, the Canadian natural gas supply has diminished by 23% since 2003 and the region has been producing natural gas to make up that supply. So any new natural gas projects in the region will only add to the opportunity.
#5. Northeast BC is stable and growing:
The area has been growing steadily. The BC Real Estate Association reports that the region has been growing 7% to 10% each year for the past three years. This growth has led to major transportation infrastructure upgrades, including the twinning of one of the biggest highways in the region. The government sees the trends in this region and they’re investing money in a massive infrastructure project to support it.
When deciding on future investment options, smart investors don’t look at where the growth is right now. They look at where the growth will come in the future, and they do that by looking at the clues that point to growth. Northeast BC is attracting my attention because its steady, stable, diversified, affluent economy provides a solid foundation on which future opportunities can grow.
-Chris Biasutti
