With a mission to inform, empower, celebrate and advocate for British Columbia's current and aspiring business leaders, BCBusiness go behind the headlines and bring readers face to face with the key issues and people driving business in B.C.
Issue link: http://digital.canadawide.com/i/1441359
JANUARY/FEBRUARY 2022 BCBUSINESS 55 BCBUSINESS.CA example of a B.C. sector tied to China. "We've yet to hear—I'm touching wood as I say this—any concerns with that," he says. "Are they going to be looking for that lumber supply from Russia? Are they going to be looking for it from Scandinavia? Maybe it's too early for us to really see it, but I haven't seen any fallout from that yet." 12. What happens when government turns off the taps? "Overall, pretty good," the BC Chamber's Famulak says when asked how we're doing with government supports for businesses still navigating the pandemic. "But let me be clear: the federal and provincial gov- ernments need to look at ways they can continue sup- porting businesses that include easing tax burdens and slowing down the layering-on of costs as we have seen over the last few years. We need to deal with our skilled labour shortage, and governments need to explore all channels available to them, from enhanc- ing immigration policy to essential skills training." Peacock suspects that many companies have been sustaining themselves on government programs. "When they're wound down, we probably are going to see more businesses fail," he says. "If these were struggling businesses, maybe shifting to another industry or sector or line of work will in the long term, in the medium term, be an improvement. But there's pain associated with this turn- over process." Williams suggests that busi- nesses think about how to add value. "If they're able to offer higher-value-added goods and services for their customers, they should do pretty well," he says. "But the businesses that are in low-value-added sectors where they're dependent on a low cost of labour and easy access to pools of low- cost labour, clearly that's going to be more difficult." 13. Getting the lay of the land base: no easy task Peacock makes a distinction between the province's tech sector, which is concentrated in Metro Vancou- ver and parts of Vancouver Island and the Interior, and land-based industries such as forestry and min- ing. For those businesses, the regulatory climate, Indigenous issues and the carbon tax make life com- plicated, he says. Peacock singles out the provincial government's recent announcement that it plans to defer logging on as much as 2.6 million hectares of old-growth forest. That policy decision could prompt the closing of 10 to 14 sawmills, plus a couple of pulp mills, he says. "This is going to lead to the shuttering and loss of high-value- added jobs." 14. Indigenous economic reconciliation faces roadblocks With the province and many businesses committed to economic reconciliation with Indigenous Peoples, what can we expect in 2022? "It's mixed, because I think the reconciliation and economic development and First Nations' involvement in economic projects is clearly a positive," Peacock says. "And I think busi- nesses have for many years been keen, as long as they know the rules and the relationship and who owns the land, to get on with doing business." But events like the blockade of the Coastal GasLink pipeline by a Wet'suwet'en Nation clan pose chal- lenges, Peacock maintains. "I think it's prompting companies to take a closer look at deploying hundreds of millions of dollars or half a billion dollars in the province and wondering what that investment return might be over a decade or two, given some of the com- plexities related to the land base." 15. Dwindling choices spell more housing crisis One of the biggest pandemic stories is the red-hot provincial housing market. With help from low inter- est rates, B.C. home sales remain well above pre- pandemic levels, Yu says. But for 2022, Central 1 fore- casts a 21-percent drop. Don't expect prices to follow suit, though. "The pricing conditions are going to remain very strong because there's no supply," Yu says. "There's not a lot of choice or options for a lot of buyers right now, so they're kind of rushing toward the market." To tackle its shelter shortage, B.C. needs to mas- sively increase not just public and not-for-profit hous- ing but also the overall supply, the CCPA's Hemingway 2022 B U S I N E S S and E C O N O M I C "We need to deal with our skilled labour shortage, and governments need to explore all channels available to them, from enhancing immigration policy to essential skills training" –FIONA FAMULAK, BC Chamber of Commerce HOME ECONOMICS Here's where the B.C. housing market is headed, according to a recent forecast by Central 1 Credit Union After surging 18% in 2021, home prices will increase by 4% this year and 2% in 2023 Home sales will drop by 21% in 2022 and 3% in 2023 HAVING FALLEN TO 2.2% IN 2021, THE RENTAL VACANCY RATE WILL DIP TO ABOUT 1.7% BY 2023 At almost 45,000 annual units, housing starts will stay robust