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BC business



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How Transit Impacts our Economy

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The transit plebiscite is launching in a week, and whether or not you think a plebiscite is useful, it’s brought up much needed conversations about what Greater Vancouver’s transit system looks like now and should look like in the future.

It’s a fact that our population is growing and our transit system needs to grow, but let’s look at the economic impact that investment in transit could have in Metro Vancouver.

Transit as a job creator

Transit gets people moving, but it also gets our local economy flowing. You don’t have to be a frequent user of public transit to benefit from a good transit system. The economic impacts of investing in transit creates benefits that take many different forms:

  • Direct ROI & Multiplier Effects: It is estimated that for every $1 invested in public transit, there are about $4 in economic returns. ($1.70 benefits from spending, and $2.00 impact from long-term cost savings)
  • More local spending: Shifting spending from automobile expenses to the other household purchases adds 3.6 Jobs for every $1 million shifted
  • Creates jobs: More direct and indirect jobs are created per dollar invested  in mass transit infrastructure than any other type of infrastructure spending including projects focused on energy, water, public facilities, or any other mode of transportation

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Savings from congestion costs

In addition to job creation, transit investment brings us cost savings through the alleviation of congestion, and as we’ve heard before, ‘time is money’.

Congestion is the culprit of slower traffic and increased freight expenses, and the cost of congestion is estimated at approximately $500 million per year by The Mayors’ Council. In addition to this, a recent study by the C.D. Howe Institute and Clean Energy Canada looked at other costs of congestion, the hidden costs such as lost face-to-face meetings from choosing not to travel because of gridlock traffic. Maybe you decided not to go out for dinner or to the hockey game because the traffic was way too busy. Or maybe you decided not to have that business meeting because there was no way to get there in time.

The C.D. Howe report estimates that these hidden costs are between $500 million and $1.2 billion per year for the Metro Vancouver area.  This is separate from the $500 million in visible losses calculated by the Mayors’ Council.  C.D. Howe reports that these hidden costs include workers not taking jobs that are best fit for them due to traffic congestion, a smaller pool of job candidates available to businesses, and lost opportunities for face-to-face learning.

If it’s a responsible and profitable economy that we’re moving towards, building a better transit infrastructure is an essential component of that vision.

 

 

 

 

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The Future of BC’s Tech Sector

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DOWNLOAD “Is BC Poised to be the Next Tech Hot Spot?”

When tech grows, everyone benefits

Overall, the tech sector is responsible for $23-26 billion of BC’s GDP and more than 165,000 jobs. Growth in the sector benefits the rest of the economy more than growth in primary resource industries.

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The potential is huge, but more investments are needed

BC’s tech sector is growing at double the rate of the overall provincial economy; however, only 11% of Canada’s high tech jobs are in BC, compared to 41% in Ontario, and employment growth has been relatively flat since 2009. More strategic investments are needed to help BC achieve its potential.

Download our report to read more and see our key findings

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Clean tech jobs in BC

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A new report has been released showing that Canadian jobs in clean tech now surpass those in the oil sands. According to the report from Clean Energy Canada 23,700 people work in green energy organizations compared to 22,340 who are directly employed in the oil sands.

So who is creating these jobs locally? We’ve gone behind the numbers to profile a few companies that are doing just that.

Clean Tech Companies in BC

Premier Lighting: a Burnaby based company that manufactures energy efficient commercial lighting fixtures, many of which are LEED compatible. It recently installed patented lighting in the Vancouver Public Library’s main branch parkade.The integrated system uses motion sensors to guide vehicles to vacant stalls, while the LED lights turn on only when the sensors detect vehicles or pedestrians.The lights are powered about 75% of the time, and BC Hydro estimated the project would reduce the library’s energy costs by about $31,000 a year.

Corvus Energy: this Richmond-based company designs and manufactures high power lithium ion energy storage systems for use in heavy industrial applications throughout the world. Corvus Energy was created in 2009 and named one of Canada’s companies to watch in the 2014 Deloitte Technology Fast 50 Awards.

Solegear Bioplastics: founded in 2006 in Vancouver, this company produces and distributes high-performance plant-based plastics, such as bioplastic pellets, sheets, and finished goods for rigid packaging and durable products. Solegear received $1.6 million in funding from the federal government this past summer and has won awards from the Globe Foundation (Best emerging technology 2014) and City of Vancouver (leading business innovator).

Endurance Wind Power: based in Surrey, it manufactures and sells turbines for homeowners, businesses, and institutions around the world. It opened a new manufacturing plant in the West Midlands, one that is expected to become a centre for international exports and produce 100 farm turbines a year.

dPoint Technologies: this company began in 2005 and licensed the patents, designs and manufacturing equipment for low cost membrane humidifier technology from leading fuel cell manufacturer, Ballard Power Systems. Today, it carries out R&D, manufacturing and selling of membranes and heat and humidity exchangers for energy recovery in buildings, worldwide. DPoint has over 20 of the leading HVAC companies in North America, Europe, China and India including Honeywell, Daikin and Goodman as clients.  The top 3 residential energy recovery companies in Europe are using DPoint membranes.

Powertech Labs: a subsidiary of BC Hydro that specializes in clean energy consulting, independent testing and power system solutions. It operates the only hydrogen refuelling station in the lower mainland that is capable of filling 700 bar (which is considered a full tank). Powertech also tracks over 350 of BC’s 550 public electric charging stations.

What is needed to support this sector?

The Clean Energy Canada report estimates 24 billion has been invested in clean energy since 2009, with the majority of provincial investments going to solar and wind power in Ontario and Quebec, and hydro power in BC. There are also significant investments coming from private sector financiers abroad. However a common sentiment is that there needs to be more support from the federal government to push the clean tech sector into maturity.

Grant Brown, global marketing vice-president for Corvus, said clean-tech companies in BC have, by and large, created their own success with little help from governments, apart from the trade commissioners who facilitate introductions abroad.

Endurance Wind Power has focused its business in the UK due to high-energy prices and financial incentives to encourage Britons to generate their own power and sell any excess back to the grid. In an interview, Randeep Dosanjh, Endurance’s marketing specialist, said because B.C. doesn’t have such “feed-in” tariffs, or comparable energy prices, Endurance sees little local potential. The Clean Energy Canada report also prescribes more federal support of the industry, and Merran Smith, Director of Clean Energy Canada notes that currently subsidies and taxes are heavily entrenched in favour of oil and gas, and eat up a good deal of the country’s diplomatic relations efforts.

Changing regulation

Clean tech is clearly a strong job creator, with huge potential right here in BC, but is it enough to spark a change in national regulation? While there is some infrastructure, we are nowhere near Germany’s goals for renewable energy to make up 40 to 45% of the share in gross electricity consumption by 2025. Perhaps we could start with an energy policy, and make strides from there.

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Kinder Morgan holds few benefits

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by Liz McDowell, December 16, 2014

It’s been a whirlwind couple of weeks up on Burnaby Mountain. In a high-stakes stand-off late last month, hundreds of protestors clashed daily with Kinder Morgan surveyors over the company’s right to test drill in a city park. The Burnaby RCMP arrested over 100 grandmothers, First Nations leaders, Clayoquot Sound veterans and other local residents for stepping over what turned out to be a fictitious line (somebody needs to check their darn GPS), and local politicians in Burnaby declared war on the proposed expansion of the Trans Mountain oil pipeline.

Now that Kinder Morgan surveyors have packed up their machinery and the hubbub has died down, it’s time to step back and look at the bigger picture. What, exactly, would this pipeline bring us that is worth all the controversy and conflict? As British Columbians, what are we really getting out of the project?

Earlier this month, a report from economists at the SFU Centre for Public Policy Research and the Goodman Group found that Kinder Morgan had over-estimated the number of jobs created by the project by threefold. This means that during the project’s construction, at most 4,000 short-term jobs would be created.

Compare this to the tens of thousands of jobs in tourism, retail and other marine-based sectors that would be impacted if there was a major oil spill in Burrard Inlet, and the project starts to feel like a real risk for our local economy. The same report also found that only 2 per cent of the project’s benefits would flow to BC, whereas tar sands operators would retain a whopping 68 per cent of revenues. The rest of the revenues would flow to Alberta and other provinces.

CRED’s own research has found that tax benefits would also be tiny. Burnaby, the municipality that stands to benefit the most, would be able to fund at most 1/12th of its parks and recreation budget from additional tax benefits. And that’s assuming no repeats of the 2007 spill on Inlet Drive, since a mishap like that could immediately wipe out all the municipal gains.

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Provincially, the amount of benefit Kinder Morgan claims this project would bring would fund, at most, two-thirds of the running costs of just one of BC’s 99 hospitals. Now, that’s hardly a nation-building project. You can bet that Kinder Morgan’s announcement in late November that the company has quietly sold all its assets to its American counterpart certainly won’t increase the benefits to British Columbians, either.

A recent report came out claiming that there are now more Canadian jobs in clean energy than in the oil sands. Our own research has found that there are more jobs in the brewing and beer economy than in the whole of the oil sands. So why it is assumed that finding export markets for oil is a national priority but building clean energy jobs and, more importantly (sorry solar panels but a nice microbrew beats you any day), beer jobs isn’t?

Maybe what we really need is a beer pipeline.

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Kinder Morgan benefits overblown: independent study

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Earlier this week, an independent study released by the SFU Centre for Public Policy Research, in collaboration with California-based consultancy the Goodman Group, found that Kinder Morgan has substantively over-stated the benefits of its proposed Trans Mountain Pipeline Expansion in its submission to the National Energy Board.

The report echoes past research from CRED which has found that BC’s provincial and municipal coffers will only get a tiny benefit from the Trans Mountain expansion. Instead, oil sands producers, Alberta and, of course, Kinder Morgan will be the main beneficiaries.

Municipal benefits from the Trans Mountain pipeline expansionCRED_km tax revenue Municipalities rev1-01

According to our research, Kinder Morgan’s stated tax benefits (which, as this report highlights, maybe also be overblown) would only fund a small fraction of provincial and municipal services – 0.3% of the costs of running the province’s schools, for example, or just 1% of the Coquitlam police department. Even the biggest municipal beneficiary, the City of Burnaby, could fund less than 9% of its Parks, Recreation and Cultural budget with tax revenues from the Trans Mountain Expansion. And this is a best case scenario, assuming no increased costs for servicing the pipeline right-of-way or any incidents to respond to.

BC provincial benefits from the Trans Mountain expansionCRED_km tax revenue BC rev1-01

The SFU report also found that Kinder Morgan has significantly over-estimated the number of jobs the pipeline would create, and downplayed the cost of a major oil spill because the company failed to take into account the high population density of the Lower Mainland, underestimating the costs of a catastrophic oil spill by potentially billions of dollars.

Download the full report here, and read CRED’s reaction here.

 

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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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The changing face of jobs in Northern BC

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How important are resource jobs to BC’s north?

After posting a report highlighting that only 1 in 100 BC jobs are in the mining, oil and gas sectors & that more people in our province work in the tech sector than in oil, gas, mining, forestry and utilities combined, we started having conversations about the tensions between different parts of our province – is information like this more relevant to Vancouver and the surrounding south coast than to the interior and north?

Outside of the urban and populous south coast, it’s often assumed that vastly different market forces are at play. We decided to examine the data and see if these assumptions matched up with reality.

In particular, we were interested to learn what regional job markets in the north of the province look like, which industries are growing & which are shrinking, and where future demand is expected to come from. What would the same jobs breakdown look like in Kitimat or Prince George – both places where primary resource industries have traditionally played a significant economic role?  Is there a much higher reliance on extractive industries (oil, mining and gas) than in the south? The following summarizes our initial research:

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Tech jobs trump resources

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Job creation is often touted as a primary reason to go ahead with energy projects like the Trans Mountain Pipeline.  But in fact, energy takes a back seat to many other sectors.

For example, the tech sector is significant in job creation – it employs 84,000 people in BC, which is more than oil, mining, gas, and forestry combined.  If this number surprises you, take a look at some other surprising stats on where BC’s wealth comes from. We find that the energy sector is small potatoes when it comes to job creation, funding social programs and generating wealth for our province.

Tech sector jobs

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Fuelling BC’s economy: where does our wealth come from?

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Why does this conversation matter?

In order to decide whether energy development projects should go forward, it’s essential to have a good understanding of where the sector fits into the bigger economic picture. Of course we know that energy is important to Canada, but how important? In what ways? And is it more or less important than other sectors?

Where does our wealth come from?

It’s often said that British Columbia is a resource-based province. In actual fact, the reality is a lot more complex. While it’s true that much of BC was built on natural resources, and that even today sectors like technology and construction have a certain amount of inter-relationships with the resource sector, the basis of our economy has overwhelmingly shifted to service-based industries. More than 4/5 of us work in services and over 76% of our GDP comes from those sectors.

It’s also important to note that a significant part of our economy is based on small businesses. Small businesses make up 98% of all businesses here in BC, more than any other province.

Although economics can be complex and numbers can tell different stories depending on how they’re interpreted, some data speaks for itself. Here’s a chart breaking down the main sources of GDP in British Columbia:

BC GDP by industrySource: The 2012 British Columbia Economic Accounts, BC Stats

Oil, gas and support services make up just 3% of our GDP, compared to 15% for manufacturing and construction and over 23% for financial and real estate services. When secondary energy services are added into the equation, the total contribution to GDP is still only 11%. While this number is significant, it’s certainly not where most provincial economic activity is coming from.

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