Highlights:
British Columbia’s population geography is undergoing a dramatic shift.
Typically, the growth and decline of communities is the result of economic factors in the form of jobs, however, in recent years demographic (aging), social (lifestyle preferences), technological (remote working) and policy factors (immigration) have all begun to take on more prominent roles.
This represents an important opportunity for smaller communities across BC to grow their resident base in creative ways.
Shrinking communities equate to diminishing tax revenues, meaning that in order to preserve ones current standard of living, communities need to grow.
Key leverage points to help communities become competitive and grow their resident base include keeping housing affordable, strategically creating jobs in growth industries, resolving childcare deficits, leveraging tourism and alleviating vulnerabilities.
Once again, communities across British Columbia (BC) find themselves at a crossroads where they are confronted by important, and I would argue decisive trends, that will shape their future. Evidently, the most prominent at the moment is the CoVID-19 pandemic. The impact of CoVID-19 and the subsequent lockdown measures have caused many to question what they prioritize most in life. For the most part, this can be summed up in the form of larger homes, more outdoor space and a more intimate social fabric. This can be denoted from the droves of people that exited larger urban centers, setting their eyes on smaller communities across BC. This was only made possible by incredible technological advancements that have allowed people to live in one location while working from another and the forced experiment that demonstrated to senior executives that their staff can be equally productive working from home while additionally saving them millions in commercial real estate costs. As an Urban Economist, I don’t believe that this exodus is a ‘no-vote’ for cities, but instead the culmination of a reevaluation of current priorities among certain groups in society and new opportunities afforded through technology and workforce flexibility. That being said, CoVID-19 is a Black Swan event. Having disrupted the lives of many in the short term, it is highly improbable and unlikely to be experienced again anytime soon.
"Communities across BC are no longer just growing as a result of economic factors, but also due to demographic, social, technological and policy factors."
Instead, there are other more notable headwinds that have been occurring behind the scenes, that will arguably have a more long-term and transformative impact on the future of BC’s communities. Chief among these is Canada’s aging population. Canada’s accelerated aging is being fuelled by the overall magnitude of the baby boomer population. Accounting for 24% of Canada's population, the baby boomers have inflated everything from school enrolment rates to the labour force; making them arguably Canada’s most transformative generation. Born between 1946 and 1964, the baby boomers began to retire in 2011 and will continue this trend until 2029. Currently, BC’s over 65 population stands at 986 thousand (19% of the provincial population) and it is expected to increase to 1.3 million by 2030 (24% of the provincial population). As these baby boomers retire from the labour force it can be expected that many of them will relocate to more desirable locations that offer a comfortable climate and a better quality of life. This bodes well for certain locations across BC, such as the Thompson-Okanagan and Vancouver Island, which already boast a higher proportion of seniors than other regions across BC (24% and 23% respectively). That is not to say, however, that they will not choose to relocate to other locations that bring them closer to family, offer more affordable housing markets or have a higher density of healthcare professionals and assisted living facilities. On top of this, the Canadian government recently announced that they will be increasing their immigration target to 400 thousand in 2021 and will continue to increase it over the next 3 years. Such levels have not been seen since 1913 and efforts haven't come close since. While typically newly landed immigrants tend to settle in larger urban centers, BC’s overheated housing markets (ie. Vancouver and Victoria) have been favoring a greater dispersion of new arrivals. Many of these immigrants will be arriving for economic reasons, meaning that they will be bringing welcomed skills and investment with them. All of this has the potential to reshape the population geography of BC.
This places us at a crossroads, where communities across BC are no longer just growing as a result of economic factors (jobs), but also due to demographic (aging), social (lifestyle), technological (connectivity) and policy factors (immigration). Understanding these trends and how they are playing out at the local level will be important for positioning one’s community to navigate the forces of change and to potentially take advantage of new opportunities on the horizon.
"Shrinking communities equate to diminishing tax revenues, which are a necessary condition for maintaining important public infrastructure, services and amenities."
While many communities may already be content as it is, it’s important to recognize that a community is never static, but always in a state of flux; meaning that if it is not growing, it is likely shrinking. Evidently, shrinking communities also equate to diminishing tax revenues, which are a necessary condition for maintaining important public infrastructure, services and amenities and for providing a comfortable standard of living for its residents. For that reason, BC’s communities should be looking for opportunities to keep themselves competitive and to keep their populations growing, even if only slightly. The following are several strategic areas that communities across BC can focus on to establish a competitive edge and to build prosperous societies for their residents.
Housing – The most obvious impact of changing population geographies will be seen in the real estate sector. While there are many factors that influence the cost of housing, it is its sensitivity to supply and demand changes that has the most noticeable influence on prices. Data from the BC Real Estate Association, for example shows that the price of housing in the interior of BC has increased by 26.7% since this time last year, compared to a BC average of 16.1%. As mentioned above, this is likely a reflection of the desire to live in less densely populated areas and the flexibility offered by remote working availed by the CoVID-19 pandemic coupled with a limited supply of housing. While the effects of CoVID-19 are likely to be short term deviations from the mean, longer term demographic trends driven by population aging and increased immigration targets will also have a significant impact on the demand and supply of housing in smaller communities across BC. Those that are interested in preparing for the future will want to begin understanding the effects these trends will have on their communities. Anticipating impending demand and affordability by income group will be an important starting point for identifying the housing supply needs in a community.
Employment – Although some communities across BC have been growing as a result of non-economic factors (ie. lifestyle and retirement), the vast majority are growing for economic reasons, primarily jobs. Given BC’s rich geography, many communities have built their reputation on proximity to natural resources and locational advantages. Although such industries remain important to BC’s economy, the goods producing sectors have experienced rather limited growth over the past decades when compared to the services producing sectors. According to data from Statistics Canada, employment in goods producing sectors, such as forestry and mining, increased by 18.7% between 2000 and 2020, while employment in the services producing sectors, such as retail, healthcare and accommodation and food services, increased by 31.8% while accounting for a larger overall share of jobs. With a large proportion of the population expected to exit the workforce over the coming years, it will be important for communities to position themselves to take advantage of new growth opportunities on the horizon. Not only is the services producing sector the fastest growing, but a retiring baby boomer generation will generate increased demand in this area.
Childcare – It is not just retirees, but also young families that are moving to smaller communities. Although the connection is not always evident, the relationship between the economy and children is striking. Just think about it, for every stay-at-home parent, there is one less person participating in the workforce. The result is a reduction in productivity and ultimately in terms of output; this is what contributes to GDP. Consequently, we can conclude that what is good for childcare provision is also good for the economy. Unfortunately, most communities across BC lack sufficient childcare provision (ie. group childcare, pre-school, etc.). A 2018 survey by the Union of BC Municipalities reported that 92% of small communities across BC noted that it was difficult to find quality, affordable and accessible childcare. While a lack of available spaces was highlighted as the greatest challenge, affordability was a major obstacle. According to Childcare BC, the average fees for infant and toddler care across BC are around $1,000 per month; this is similar to the cost of rent for many. Critical to building a prosperous economy and an equitable society will be solving the childcare dilemma. For those communities that make an effort to recognize their current and future childcare needs and what it takes to address shortfalls and affordability issues will indirectly position themselves as competitive markets and desirable places to live.
Tourism – It is important to remember that tourism introduces external capital to a community, which from an economic perspective is more valuable than the recirculation of existing capital. Therefore, tourism should represent an important part of any community development strategy. Unfortunately, the face of tourism has drastically changed amidst the CoVID-19 pandemic and the subsequent closure of borders. Whereas BC received nearly 6.5 million international visitors in 2019, according to a study by Destination BC, in 2020 it only received 822 thousand, down 87%. While this has been a devastating blow to many of the communities across BC that rely on seasonal tourism, travel restrictions for Canadians and a shift towards domestic tourism has helped to soften the blow. As Canadians rediscover their own backyard, domestic tourism continues to rise and should not be overlooked. According to a report by PwC, prior to the CoVID-19 pandemic, domestic tourism accounted for more than 70 percent of overnight visits in BC. Offering some of the most diverse landscapes on the continent, the tourism industry in BC has something for everyone. Some communities have already undergone surveying exercises to identify the natural, historical and cultural assets that give them a competitive edge and have begun to develop campaigns to bring renewed awareness to them. With approximately 20 percent of Canada’s population over the age of 65, communities that prepare age-friendly tourism strategies will likely stand to gain the most.
Vulnerability – Last but not least, it is important to remember that our communities are diverse places. Diversity is what gives them their uniqueness and character. Unfortunately, not all groups in society are afforded the same opportunities, meaning that some groups are more vulnerable and susceptible to disruptions than others. Data from the Statistics Canada Labour Force Survey revealed that the impacts of the CoVID-19 pandemic and the subsequent lockdown measures were felt disproportionately among certain groups in society. While the economy has begun to rebound, employment levels among minority groups, low-wage workers, part-time workers, youth and indigenous communities all remain much further below their pre-CoVID levels than among those who are not part of these groups. While many of these fractures existed prior to CoVID-19, the pandemic has exacerbated them, revealing distinct and concerning fault lines in our communities. Overcoming these deficiencies will require concerted and coordinated effort among our leadership and other active members of our societies. Those that make the effort to address such structural shortfalls now, however, will stand to gain the most, as they will be contributing to building more robust and resilient communities for the future.
Kyle Farrell is Managing Partner and Chief Urban Economist at Economic Pulse Analytics. He works closely with local governments to provide them with population, housing and employment forecasts to make more informed decisions about their future. He holds a PhD with specialized knowledge in Urban Economics and regularly consults for the United Nations.
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