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/411627
bcbusiness.ca december 2014 BCBusiness 69 It wasn't that long ago that B.C.'s forestry industry looked to be in its death throes. With the U.S. homebuilding sector in shambles and softwood lumber exports still blocked at the border, any meaningful recovery in timber prices seemed like a dream. Well, that dream has come true, and faster than just about anyone expected—so fast, in fact, that the sector is now facing a major labour shortage. According to a 2013 report prepared for the BC Coastal Forest Industry Labour Market Partnership, "Demand- supply gaps are anticipated in priority occupations beginning in 2013 and increasing progressively each year through 2022." That's largely due to demo- graphic realities, including the retirement of a large cohort of baby boomer- generation workers. The effects of that are stark: according to the report, "Six of the seven occupations projected to experience the most severe skills gaps over the next 10 years are forestry- specific occupations." If Gateway gets the go-ahead and starts to compete with forest companies for an increasingly thin pool of young labour, those gaps will only grow wider. And if another multibillion- dollar infrastructure project, be it Site C or LNG, also goes ahead in the same period, there might be no economically feasible way to close them. Loser fOREStRy 6.1% 5% 3.9% Exports of softwood lumber from B.C. to the U.S. were valued at $2.6 billion in 2013, down from a high of $4.8 billion in 2005, but up from a low of $1.5 billion in 2009 Northern Gateway isn't the only multibillion-dollar infrastructure project that's slated to be built over the next decade in northern B.C. There's also BC Hydro's proposed Site C Dam, which has an estimated price tag of $8 billion, and the buildout of the region's LNG assets, which will involve billions more in spending. Add it all up, according to PI Financial's Jason Zandberg, and it could spell the mother of all labour crunches. And while that's bad news for the proponents of the various projects in the region, it's great for businesses on the other end of that equation. That's because increasing wages will almost certainly translate into increased sales at restaurants, on truck acces- sories and a range of other indulgences—and that's in addition to the $800 million that will already be spent on transportation, equip- ment, food and hospitality in local communities along the proposed route during the three-year construction window. "Labour will win out with higher wages, and so will the communities where they spend their money—all the goods and services that are purchased around the area," Zandberg says. "We'll see real estate prices going up in these northern communities, and there will definitely be winners as more income flows into the labour pool." rEtAilErS LabOUR PainS Expect upward pressure on wages in an area that is already short of workers B.C. Overall Prince George Northeast B.C. 8 7 6 5 4 3 2 1 0 Percentage Winner source: statistics canada; bc stats Unemployment rates