The recent completion of the Trans Mountain (TMX) pipeline expansion was celebrated as a success, for both Canada’s energy sector, and as a boost to the Canadian economy. However, the forecast that the TMX pipeline will contribute more to Canada’s growth (0.25 percentage points) than the entire province of British Columbia (0.23 percentage points) is a rude and sobering wake-up call.
That disparity, even if small, highlights the problems facing BC’s economy and shines a light on the pressing need to rebuild investor trust and make better use of our abundant natural resources.
Given its array of resources, BC should be one of the pre-eminent forces in the Canadian economy. While BC is certainly no slug, we are still witnessing Canada’s Pacific gateway province struggling to keep up with a single infrastructure project. This scenario exposes the issues affecting how BC chooses to handle and benefit from its rural economies.
BC’s economy on the whole has traditionally relied on its resource sectors for growth. From forestry and mining to energy and agriculture industries, these sectors have supported small-town BC for decades, and account for vast swatches of the province’s total international exports. However recent economic indicators in the province suggest a trend; a decline in the efficiency and profitability of these sectors.
A key concern lies in the diminishing confidence among investors in BC’s resource industries. The ever-changing policies of the provincial government, especially the uncertain regulations, have made it difficult for investors to make decisions in this province. While the government’s efforts to manage land use and resources have excellent intentions, they have caused great uncertainty among both the public and industry.
It is vital for British Columbia to work towards reconciliation, but shouldn’t come at the expense of excluding players, like industry and the public from policymaking processes.
Take, for example, the proposed changes to the Lands Act, the new strategy for watershed security, and the updated coastal marine strategy – all aimed at safeguarding BC’s environment, but unintentionally discouraging investment. The lack of transparency and perceived haphazard policymaking risks driving investors away not just from BC’s resource sectors, but from the entire province.
This situation is particularly challenging for communities that heavily rely on resource industries to put food on the table. According to the 2024 State of the North report, rural economies are already feeling the impact of declining traditional sectors like forestry, which saw multiple mill closures in the past year across the province. These forestry communities have been experiencing rising unemployment due to downturns across various resource sectors since 1997.
Nevertheless, there is still potential for growth and rejuvenation. BC holds huge reserves of the materials required for the energy transition, such as lithium and rare earth elements. These minerals play a key role in producing electric vehicles, solar panels and other innovative technologies.
The federal government is keen on boosting the development of new mines by improving the permitting processes, and offering financial incentives for investors, in addition to heavily subsidizing electric vehicle production in provinces like Ontario. It is therefore essential for provincial policies to align with these efforts.
BC needs to also simplify its own processes, ensure transparency and engage all stakeholders in decision making. A well-rounded approach that upholds Indigenous rights while fostering sustainable growth is key. The successful collaboration between the Haisla Nation and the Pembina Pipeline Corporation on the Cedar LNG project serves as a model for how Indigenous participation leads to benefits for all.
Moreover as urban areas in British Columbia undergo further economic diversification, it is crucial not to overlook the significance of rural economies. Investing in resource sectors should be seen as complementing the expansion of the technology and professional services industries. The prosperity of urban hubs, like Vancouver and Victoria, is intricately tied to the well being of the economies that supply the raw materials and energy for high tech sectors.
Realizing that the economic impact of the expanded TMX pipeline is exceeding that of the province of all of BC is a call to action. We need a revamp in how this province manages its resources and promotes economic development. Trust needs to be rebuilt among investors by adopting inclusive policy making practices and making the most of our resources in order to solidify BC’s role as a key contributor to Canada’s prosperity.
