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How does BC’s construction sector break down?

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Construction generates a lot of buzz, especially when talking about the jobs created by new oil & gas projects. Here, we take a deeper dive into the sector as a follow-on from our recent report, “What’s Fuelling BC’s Economy?” 

Are construction jobs the missing link?

In BC, the construction sector – building everything from houses to roadways – is responsible for 7% of our GDP and almost one in ten jobs. It’s also one of our province’s fastest-growing sectors. But how does it break down, and what are some of the factors that keep the construction sector booming?

What fuels construction?

The construction sector is one of the primary drivers of our provincial economy. It’s a $15 billion dollar industry in BC – and over the past decade, has consistently been one of the fastest growing sectors.

So where is this growth coming from? Just over half of the GDP from BC’s construction sector comes from retail and commercial building construction and another 16% comes from repairs. Finally, the remaining 31% is from industrial projects, everything from roadways to hydroelectric dams [source: BC economic accounts – download].

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What Canada and Alberta could learn from Norway

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Should Canada adopt the same energy model that made Norwegian citizens theoretical millionaires?

Written from an interview with prominent Vancouver business leader Leonard Schein

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What is Norway’s energy model?

To understand Norway’s energy model, it’s helpful to go back to 1962, when excitement ignited about the possibility of oil in the Norwegian Continental Shelf (NCS). A year later, Norway claimed sovereignty over the NCS and deemed any natural resource found there the property of the government. This initial government response forms the basis of the very different philosophies between Norway and Canada on natural resource ownership. While Norway claims ownership over oil in its land, Canada assumes that any oil in the ground belongs to the companies that extract it.

Playing hardball

The disparate philosophies of the role of government in the oil industry seem to be at the crux of Norway and Canada’s very different paths in the industry. In 1972 the Norwegian government established its own oil company, Statoil, which was awarded 50% of all petroleum production licenses. (Currently the government owns 67% of Statoil, and the other 33% is public ownership.)

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How big is BC’s energy sector?

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CREDBC_bceconomy_infographic(click on image to expand)

How important is the energy sector to BC?

And is it more or less important than other sectors?  We’ve compiled this report to find out where the jobs, GDP and growth are coming from in order to determine BC’s main economic drivers.

DOWNLOAD “What’s fuelling BC’s economy?”

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CRED releases new report

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A new report from CRED, How do pipeline spills impact property values?, reveals that an oil spill in Burrard Inlet or along BC’s south coast has the potential to negatively impact property values and cost jobs in real estate and property development, in areas both adjacent to spill sites as well as the surrounding region.

DOWNLOAD THE REPORT
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The research concludes that oil spills have direct and lasting impacts on property values. In particular, the report finds that:  

  • In eight documented cases, properties directly impacted by spills were significantly devalued
  • Nearby properties lost up to 8% of their value
  • Where homes relied on well water and the groundwater was contaminated, the value loss was permanent

The goal of the report is to increase access to information and support a transparent conversation around the economic risks and rewards of Kinder Morgan’s proposed new Trans Mountain pipeline. CRED is calling for an independent study of the economic risks of the proposal.

Downloadable image highlighting the report’s main conclusion:

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Business leaders react to the report’s findings

This report brings up important information and concerns. As planners, it’s our job to be aware of all potential risks to housing and land values. We hope that the government will take action to protect Vancouver’s market from the impacts of an oil spill.” – Blaire Chisholm, Planning Manager at Brook Pooni Associates

Vancouver is famous the world over for its natural beauty and pristine environment. This is the driving force behind all of our real estate-related industries. As a realtor, it is my responsibility to let my clients know about the risks they could face by buying a property near pipeline infrastructures.” – North Shore realtor and CRED advisor Dallas la Porta

As a realtor I have noticed that with the huge amount of negative publicity surrounding the expansion of this pipeline, people are on red alert and are very aware of the potential impacts of the pipeline on their properties. As a result, buyers will typically avoid a property anywhere near a pipeline and this does have a negative impact on values.” – Langley realtor Annabel Young

Read the full report here 

How do oil spills impact property values?

Photo credit: John Lehmann/The Globe and Mail

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The following is an excerpt from CRED’s upcoming report. To be notified when the report is launched and available for download, please contact us or join our mailing list.

Introduction

British Columbia’s property development sector is a significant driver of economic growth and an important source of employment. According to the Urban Development Institute, the sector is directly and indirectly responsible for over 220,000 jobs across the province, in areas from planning and construction to secondary supplier purchases. It makes a bigger contribution to provincial GDP than any other sector – more than natural gas, tourism, mining, forestry or film and television.

In the real estate sector, a sub-section of the property development industry, there are over 14,000 people working as realtors in Greater Vancouver, Vancouver Island and the Gulf Islands alone. The coastal real estate market is also important to private homeowners who gain value not only from a physical property but from its viewscape, proximity to waterfront and wilderness, and location in one of the world’s most liveable regions.

CRED is seeking to better understand the risks of an oil spill as part of an ongoing dialogue about the economic future of the region. Where are the best places to invest for future growth and prosperity? How can we safeguard our quality of life and support industries that will ensure long-term responsible development?

Real World Examples

To begin assessing risk, we gathered information on eight separate oil spills in the US and Canada. In three of the cases, the spills directly impacted properties and in two further cases, the proximity and perceived impact of the incidents devalued properties. In the final three cases, residents have claimed values losses but they have not yet been independently confirmed. 

Case study: Pepco Pipeline, Maryland, 2000

Loss in value: 11-12% in the 1st year

In 2000, a 3,800-barrel (120,000-gallon) oil spill in a suburb of Washington DC affected property near the Patuxent River. A study published in The Appraisal Journal in 2001 concluded that waterfront and beach-access homes were significantly and negatively affected by the spill.

In the year following the incident, home values within a 10-mile study area fell 11%. In addition, waterfront properties experienced reduced sales volume. According to real estate listing data, only three waterfront homes sold in the first sale season after the spill, a 40% decrease from the previous year. Because there was no substantial variation in regional markets, the study concluded that this decline was likely due to the spill.

This is a small excerpt from an upcoming CRED report on the link between oil spills and local property values. If you would like to read the whole report, please contact us or join our mailing list.

Innovating beyond the beaver: Credible Conversations with Michael Tippett

michael tippett

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Our first Credible Conversations forum was held on May 29th at the Creekside Community Centre in Vancouver. Over 100 business leaders, entrepreneurs, politicians, First Nations representatives and BC residents came together to discuss the economic risks of pipeline expansion and explore how to build a more diversified economy here on the west coast.

How to make a billion dollars: building an innovation economy

Michael Tippett, lifetime tech entrepreneur and current Director of New Products at Hootsuite, shares his thoughts on Canada’s economy past and present. Here’s his call to grow rather than harvest, create rather than extract, and to disrupt everything:

Credible Conversations panel: What does responsible economic dev’t mean in BC?

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Our first Credible Conversations forum was held on May 29th at the Creekside Community Centre in Vancouver. Over 100 business leaders, entrepreneurs, politicians, First Nations representatives and BC residents came together to discuss the economic risks of pipeline expansion and explore how to build a more diversified economy here on the west coast. Over the next few days, we will be posting videos, photos and presentations from the forum here on our blog.

What does responsible economic development look like in BC?

The second experts’ panel explored economic alternatives: if we don’t built new oil pipelines, then what will our economy be based on instead? What industries should we nurture and support? Where will jobs, innovation and growth come from?

Moderated by Tara Mahoney from GenWhy Media, panelists included Linda Solomon from the Vancouver Observer, Bradley Shende from M2O Digital Agency and Rueben George from the Tsleil-Waututh Nation and TWN Wind Power.

Watch the full discussion here:

Credible Conversations panel: Will new oil pipelines benefit BC businesses?

Panel BC biz and pipelines

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Our first Credible Conversations forum was held on May 29th at the Creekside Community Centre in Vancouver. Over 100 business leaders, entrepreneurs, politicians, First Nations representatives and BC residents came together to discuss the economic risks of pipeline expansion and explore how to build a more diversified economy here on the west coast. Over the next few days, we will be posting videos, photos and presentations from the forum here on our blog.

Will BC businesses benefit from new oil pipelines?

The first experts’ panel explored the economic impact of oil pipeline development on the province’s economy as a whole.

Moderated by Mandy Nahanee from the Squamish Nation, panelists included Karen Campbell, a staff lawyer with Ecojustice, Wes Regan, CEO of the Hastings Crossing Business Improvement Association, and Ngaio Hotte, an economist with the UBC Fisheries Economics Research Unit.

Watch the full discussion here:

And here are the slides used by Ngaio Hotte in her presentation. A more detailed analysis can be found on the UBC Fisheries Economics Research Unit “talking fish” blog.

Slide1 Slide2 Slide3 Slide4

 

Credible Conversations presentation: BC economic snapshot + pipeline risks

CredConvo tech breakout group

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Our first Credible Conversations forum was held yesterday at the Creekside Community Centre in Vancouver. Over 100 business leaders, entrepreneurs, politicians, First Nations representatives and BC residents came together to discuss the economic risks of pipeline expansion and explore how to build a more diversified economy here on the west coast. Over the next few days, we will be posting videos, photos and presentations from the forum here on our blog.

To kick things off, here’s Liz McDowell giving a snapshot of BC’s economy and sharing some of CRED’s research to date:

And here is her presentation:

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Download the presentation slides

Notes from the real estate stream

Group question

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Our first Credible Conversations forum was held May 29th in Vancouver. Over 100 business leaders, entrepreneurs, politicians, First Nations representatives and BC residents came together to discuss the economic risks of pipeline expansion and explore how to build a more diversified economy on the west coast. 

*These are rough notes from the break-out sessions and are not meant to convey the opinions of all CRED members, or even all participants in the break-out group.

How could a new oil pipeline affect the real estate and property development industries?

Costs/risks:

  • Value of homes detrimentally impacted
  • Risk to property values
  • Affects Vancouver’s brand
  • Vancouver becoming a “petrol-port”
  • Health impacts – fumes from trucks and tankers
  • Harbour view affected

Benefits:

  • Kinder Morgan media plugs help raise awareness about the region
  • Kinder Morgan is reaching out to community regarding their proposal
  • Economic growth = population growth, more development, higher real estate values
  • Increased tax income to pipeline municipalities

Information needed:

  • How much do people value the Vancouver brand?
  • At what point is the impact too much to be allowable?
  • How long does it take to recover from an oil spill?
  • Is it possible to completely recover from an oil spill?
  • What are the economic costs of environmental degradation i.e. airshed quality?
  • Can Vancouver still be the “greenest city” if the project goes ahead?
  • How much would it cost to insure the pipeline without government coverage?
  • What / how many / for how long will new jobs be around for?
  • Will the pipeline attract people to move to Vancouver?
  • How would an earthquake affect the pipeline / tankers?