People are seen at Richmond Centre shopping mall with most wearing face masks, in Richmond, B.C., on Monday, July 20, 2020. The Conference Board of Canada suggested on Monday that economic recovery from the COVID-19 pandemic will take longer than originally expected, with British Columbia among the provinces that is best positioned to rebound. THE CANADIAN PRESS/Darryl Dyck

People are seen at Richmond Centre shopping mall with most wearing face masks, in Richmond, B.C., on Monday, July 20, 2020. The Conference Board of Canada suggested on Monday that economic recovery from the COVID-19 pandemic will take longer than originally expected, with British Columbia among the provinces that is best positioned to rebound. THE CANADIAN PRESS/Darryl Dyck

B.C. could shine amid Canada’s slow economic recovery: Conference Board

Restoring travel levels will be key for other provinces as well

The economic recovery from the COVID-19 pandemic will take longer than originally expected, with British Columbia among the provinces best positioned to rebound, the Conference Board of Canada suggests.

The Ottawa-based think tank predicts Canada’s real gross domestic product will fall by 8.2 per cent this year and that it will take until the end of 2021 for the country’s economy to return to its pre-pandemic output.

But the Conference Board also projects that in B.C., real GDP will fall by just 5.5 per cent this year and grow by 6.7 per cent in 2021.

“B.C. was very successful in containing the virus early on so that managed to dampen the impact of the closures, it dampened the impact on the labour market, and already we are seeing a fairly good situation because of that,” said Pedro Antunes, the board’s chief economist.

“B.C. is facing a deep recession nonetheless, it’s just relatively better than other provinces this year.”

The quarterly report looked at each province and found that while Alberta, Saskatchewan and Newfoundland and Labrador avoided the high COVID-19 infection rates that plagued Ontario and Quebec, they were hit by low oil prices.

The board looked at regional differences ranging from the shuttering of Nova Scotia’s Northern Pulp mill to trade agreements affecting Saskatchewan’s fertilizer and potash industries.

The report says B.C., on the other hand, has not only limited COVID-19’s spread but has also received a boost from construction, major energy projects and a strong balance sheet at the provincial government level.

Overall, the report found that people are quickly being rehired to work B.C.’s hardest-hit industries, including construction, retail, hotels and restaurants.

“What’s really driving the B.C. economy is this huge liquified natural gas project developing in the province,” Antunes said.

“This pandemic is strange, in the sense that incomes have been really well supported through the crisis. So home renovation, construction, and home building is holding up a lot better than we thought it might early on, and that is supporting the forestry sector.”

By contrast in Alberta, consumer confidence has faltered as businesses plow money into debts accumulated during the shutdown. The Conference Board noted that for Alberta’s oilsands mines, stopping production is costly because there are fixed, ongoing expenses that aren’t covered by current oil prices.

Alberta is projected to bounce back in 2021, but Antunes said it is “not a good news story,” since the economy is coming back off such a low baseline.

One factor that could bolster oil prices going forward, said the Conference Board, is increased demand for transport and travel, which has been restricted by the pandemic.

ALSO READ: ‘Modified’ games, limited competitive play return as B.C.’s local sports enter Phase 3

Restoring travel levels will be key for other provinces as well. The lack of travel has pinched the tourism sector in Prince Edward Island, the aerospace manufacturing industry in Manitoba and immigration levels in Nova Scotia, the Conference Board said.

“Eastern Canada and some of the smaller provinces were less hit by the virus itself,” said Antunes.

“But when you look at the sectors in particular — things like accommodation, anything associated with tourism, anything associated with air transportation, flight simulator technology, aerospace companies, manufacturing branches — all of this is going to face a much longer recovery.”

The report also keyed in on provinces beset by their connections to the U.S., where the outlook “could change sharply if the current surge in COVID-19 cases … isn’t brought under control quickly.” In Ontario, auto exports to the U.S. hinge on customers coming to dealerships, while New Brunswick manufacturers also rely on the U.S. market, the report said.

“We are an economy, in general, that’s very dependent on trade,” Antunes said.

“We have seen the U.S. being not very successful at all at containing the virus … We need the U.S. to do well through this crisis if we are to do well as a nation.”

The report authors said their forecasts assume that a COVID-19 vaccine will be offered in Canada by June 2021 and that there will be no national lockdown for COVID-19 containment going forward, although there may be regional shutdowns.

Still, the board’s report raised concerns about an uptick in COVID-19 cases in some provinces that were previously able to re-open businesses, such as B.C. and Quebec. The report said clusters of COVID-19 in B.C. are a ”cause for concern,” noting that Ontario’s higher case count was more easily offset by work-from-home options for the financial sector.

“(Early) measures allowed Quebec to restart non-essential industries in May, earlier than other provinces, and this has mitigated the damage to the balance sheets of many Quebec households and businesses,” said the report.

“However, there may be a price to pay for these earlier reopenings.”

Anita Balakrishnan, The Canadian Press


Like us on Facebook and follow us on Twitter.

Want to support local journalism during the pandemic? Make a donation here.

Coronaviruseconomy

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Victoria’s Royal Jubilee Hospital took in two COVID-19 patients from Northern Health as part of a provincial agreement. (Black Press Media file photo)
Victoria hospital takes in two COVID-19 patients from Northern Health

Royal Jubilee Hospital takes patients as part of provincial transport network

An aerial shot of Cedar Valley Lodge this past August, LNG Canada’s newest accommodation for workers. This is where several employees are isolating after a COVID-19 outbreak was declared on Nov. 19. (Photo courtesy of LNG Canada)
52 positive COVID-19 cases now associated with LNG Canada site outbreak

Eight cases still active, 44 considered recovered

The Kitimat River in July. (Clare Rayment photo)
Good News, Kitimat!

Bringing some local good news to your week

Skeena MLA Ellis Ross has been named critic for Environment and Climate Change Strategy for the BC Liberals. (Peter Versteege photo)
Skeena MLA Ellis Ross named critic for Environment and Climate Change Strategy

Previously, Ross was the critic for LNG, Resource Opportunities, and Responsible Development

Provincial health officer Dr. Bonnie Henry updates B.C.’s coronavirus situation at the legislature, Nov. 30, 2020. (B.C. government)
Hockey team brought COVID-19 back from Alberta, B.C. doctor says

Dr. Bonnie Henry pleads for out-of-province travel to stop

B.C. Premier John Horgan on a conference call with religious leaders from his B.C. legislature office, Nov. 18, 2020, informing them in-person church services are off until further notice. (B.C. government)
B.C. tourism relief coming soon, Premier John Horgan says

Industry leaders to report on their urgent needs next week

An RCMP cruiser looks on as a military search and rescue helicopter winds down near Bridesville, B.C. Tuesday, Dec. 1. Photo courtesy of RCMP Cpl. Jesse O’Donaghey
B.C. Mountie, suspect airlifted by Canadian Armed Forces from ravine after foot chase

Military aircraft were dispatched from Comox, B.C., say RCMP

An 18-year old male southern resident killer whale, J34, is stranded near Sechelt in 2016. A postmortem examination suggests he died from trauma consistent with a vessel strike. (Photo supplied by Paul Cottrell, Fisheries and Oceans Canada)
“We can do better” — humans the leading cause of orca deaths: study

B.C. research reveals multitude of human and environmental threats affecting killer whales

A logo for Netflix on a remote control is seen in Portland, Ore.,Aug. 13, 2020. Experts in taxation and media say a plan announced Monday by the government will ultimately add to the cost of digital services and goods sold by foreign companies. THE CANADIAN PRESS/AP-Jenny Kane
‘Netflix tax’ for digital media likely to raise prices for consumers, experts say

The government says Canadian companies already collect those taxes when they make digital sales

BIG SALMON ranch in Washington State. (Center for Whale Research handout)
Non-profit buys Chinook ranch in hopes of increasing feed for southern resident killer whales

The ranch, which borders both sides of Washington State’s Elwha River, is a hotspot for chinook salmon

Gaming content was big on YouTube in 2020. (Black Press Media files)
What did Canadians watch on Youtube during isolation? Workouts, bird feeders

Whether it was getting fit or ‘speaking moistly,’ Canadians had time to spare this year

Most Read