According to the Chartered Professional Accountants of British Columbia’s (CPABC) annual Business Outlook Survey, 81% of B.C.’s CPAs identified attracting and retaining skilled labour as a challenge to effective business investment and productivity. B.C.’s high cost of living and increasingly expensive housing, particularly in Greater Vancouver, have impacted recruitment efforts.
On average, households in Greater Vancouver that make the median pre-tax income contributed 87.1% of their income to housing in 2016. Mortgage loans play a major role in driving up B.C.’s already high consumer debt, accounting for approximately three-quarters of consumer borrowing. In 2016, our province’s consumer debt per capita increased by 5.0% to reach $62,935, the highest level in the country.
Relatively lower wages also make it more difficult for B.C. businesses to attract skilled talent when competing against other jurisdictions. According to CPABC’s annual BC Check-Up report, in 2016 the average worker in our province made $54,030, behind the national average of $58,162. Ultimately, B.C. needs people who want to live and work here, and certainly in the Greater Vancouver, affordability is starting to make that a bigger challenge.
We are already beginning to see the impact of high living costs. In 2016, for the first time in five years, we experienced a slight decline in both the educational attainment level of our labour force and the percentage of workers in natural and applied sciences. Workers in these sectors are more productive, and employers tend to seek a better educated workforce. A decline in these two areas indicates that B.C. may have begun to lose its competitive edge. This will become an increasing concern over the next decade, as B.C. expects that three-quarters of the 934,000 job openings to be produced by 2025 will require some post-secondary education.
While B.C. checks several boxes when it comes to being a good place to invest, the high cost of living could make Greater Vancouver an unattractive place to live for some residents. B.C.’s high real estate prices and lower wages could cause young workers to leave the province, particularly those with highly transferrable skills or a post-secondary education. Ensuring B.C. remains an affordable and attractive place for these workers is critical in order to address labour supply issues that are anticipated over the next decade.
Lori Mathison, FCPA, FCGA, LLB, is the president and chief executive officer of the Chartered Professional Accountants of British Columbia (CPABC).