Vision and Luck: Why B.C. is Canada’s Most Diverse Economy

Vision and Luck: Why B.C. is Canada’s Most Diverse Economy

Did you know that Vancouver has more flights to Asia than anywhere else in North America?

As an outlier within the Canadian economy, B.C. is certainly its most diverse. Right now, B.C. sends 44 per cent of its exports to Asia, the highest percentage by far of any province. (The next closest in terms of export percentage is Saskatchewan, which sends just over 20 per cent of its products to Asia.)

Greg D’Avignon, President & CEO, BCBC

Greg D’Avignon, President & CEO, BCBC

Why? A combination of vision and luck, says Greg D’Avignon, President and CEO of the Business Council of British Columbia (BCBC), which provides public-policy research and advice on issues to enhance B.C.’s competitiveness.

No doubt, the province has natural and historic ties to Asia. With a large diaspora of Asians living in B.C., more than 40 per cent of its residents are of Asian descent, giving Vancouver bragging rights as the most diversified city in North America.

But for many other reasons, including the lower Canadian dollar, U.S. economic growth and stronger consumer confidence, B.C. is easily outpacing Canadian economic growth right now.

Certainly in the last three years, the energy story has gained some ground, particularly liquefied natural gas (LNG). With more than $300 billion in contemplated projects coming up, LNG is the bottle opener, he adds. “If not the future of B.C., it’s definitely a big play moving forward,” says D’Avignon.

In fact, in 20 years it’s estimated that more than half of the world’s energy demands will come from Asia. “This is a transitional fuel, with countless clustering opportunities for global supply chains,” he adds. “But it’s time sensitive, so we don’t want to miss the window.”

More to B.C. than natural resources

But when you go beyond forestry and energy, B.C. has some other hidden export gems that are gaining some ground on the international stage, notes D’Avignon. It starts with our home-grown expertise.

“If you go back 20 years, B.C.’s forestry sector went through a huge upsurge in automation, primarily to drive costs down. But then they started exporting these value-added services to the world. So Canadian ‘expertise’ has become part of the export game.”

“But we could do a better job of collaborating good ideas to solve problems across sectors; share our efficiencies, especially when it comes to energy,” says D’Avignon. “Hydro power alone is such a fusion of technologies. All of these open up so many opportunities down the supply chain, and that’s what we need to capitalize on moving forward.”

And the province is creating clusters of expertise in areas such as such as clean technologies, biotechnology and life sciences. The Genome BC in Vancouver, for example, is doing some ground breaking research and attracting a great deal of global talent, creating a cluster of knowledge right in the city.

B.C.’s aerospace sector is also recognized worldwide for its highly specialized products and services. Close to Seattle’s final assembly and integration production lines, B.C. has become a major hub for Canada’s aerospace sectors and a preferred gateway for the aerospace industry to Asia Pacific, a region which is expected to see major growth in airplane sales and increased traffic in the coming years.

So the real hidden secret, says D’Avignon, comes from trade in services. While commodities and manufactured goods traditionally have formed the foundation of the province’s trade, services are gaining ground.

“Services don’t get counted in trade statistics, at least not enough,” notes D’Avignon. “But, Canada is quickly becoming a service-oriented economy. The data is just not there to support this yet.”

In fact, over the past decade, services have accounted for three of Canada’s fastest-growing exports: financial and insurance services, management services and IT services. More and more, it’s where B.C.’s economic growth will come from, and where the jobs of the future will be.

Particularly when you consider the rapid growth of the middle classes in Asia right now. It’s estimated that the size of the global middle class come close to five billion by 2030. And the bulk of this growth will come from Asia. This new consumer class, with higher disposable incomes, wants higher quality goods and services like education and agri-food products to name a few. “Given Canada’s reputation for quality and safety, there are a lot of opportunities for B.C., says D’Avignon.

“At the end of the day, this province has a lot to offer,” says D’Avignon. “We might live in B.C., but our business is global.”

So book your flight…

The aim of the 50-year-old BCBC is to provide public-policy research and advice on issues to enhance BC’s competitiveness and ultimately, to help create jobs. The BCBC is made up of the province’s top employers, from all major economic sectors. Collectively, the members are responsible for about a quarter of all jobs in B.C.

On April 9, 2015 Export Development Canada (EDC) President and CEO, Benoit Daignault will deliver remarks on the importance of trade diversification at the BCBC’ Putting BC to Work’ event.

Categories Economic Insights

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