In Alberta, the price of oil is the economic sign of the times. In Saskatchewan, it’s a mix of key agricultural and mining commodity prices. In Ontario, manufacturing and financial services dominate.
These indicators provide a snapshot of their economies and signposts of the health of what is driving provincial economies.
A recent report by the Independent Contractors and Businesses Association (ICBA) of B.C. shows something different drives B.C. – immigration.
Though forestry, mining, and tourism remain important, it’s the in-flow of individuals and families from the rest of Canada and from other countries that’s at the heart of our economy.
With construction adding more than $9 billion a year to GDP, and driving nearly 10 per cent of the jobs in the province, the health of the industry matters to everyone.
Residential construction is more important in British Columbia than any other province.
More than nine per cent of our GDP comes from the sector. Quebec’s residential construction sector has the second largest impact in Canada – and its share of GDP is 25 per cent less than in B.C.
What drives residential construction? Population growth.
What drives population growth? Here in B.C., it’s international immigration.
B.C., like the rest of the Western world, has declining birth rates. British Columbians are doing little to bump up our population.
In-migration from other provinces has been strong for the past few years – a recovery from the 1997 to 2004 period, when more people moved away than moved here. International immigration now drives B.C.’s population increases.
There is a direct link between population growth and residential construction. There was solid growth and high housing starts up until the mid-1990s.
Population growth slowed from 1997 to 2000 – mirrored by a decline in housing starts.
When the population started increasing again in 2001, housing starts began rising to levels surpassing the mid-1990s.
It’s not just numbers that are important.
It’s the attitude the immigrants bring – a strong attachment to home ownership. In an assessment released last year, the Canada Mortgage and Housing Corporation looked at immigrants six, 24 and 48 months after arrival.
While less than one-in-five owned their home at the end of six months, (an already impressive proportion, CMHC noted) more than half did by the 48-month mark.
B.C. booms when more people decide to call this province home. Far from taking away jobs, immigrants, and Canadians heeding the call to head west, generate them. In particular, new British Columbians drive the construction sector – in homebuilding, in multi-family construction and in expanding the commercial and institutional infrastructure that a growing population requires.
Think of it this way – in Alberta, they’re building homes for oil workers, in Ontario for folks working in manufacturing plants.
In B.C. we’re building new homes for the people who are building homes for the people moving to B.C.
In addition to all immigration does to make this a more vibrant and interesting place to live, it’s also key to the economic well-being of all British Columbians.
Philip Hochstein is the president of the Independent Contractors and Businesses Association (ICBA) of B.C. Philip is also a member of the Journal of Commerce Editorial Advisory Board. Send comments or questions to firstname.lastname@example.org.