VANCOUVER, March 3, 2022 – According to BC Check-Up: Invest, an annual report by the Chartered Professional Accountants of British Columbia (CPABC) on investment trends across the province, there were 152,048 active businesses in November 2021, a 2.3 per cent increase compared to January 2020.
“By May 2020, the COVID-19 pandemic had reduced the number of active businesses by over 17,000 compared to the start of that year,” said Lori Mathison, FCPA, FCGA, LLB, president and CEO of CPABC. “By November 2021, as our economy reopened, the number of active businesses had increased in sixteen of the previous eighteen months and exceeded pre-pandemic levels.”
Business activity increased the most in media-related services, with 2,052 businesses in November 2021, an increase of 8.7 per cent compared to January 2020. However, some customer-facing industries were still below pre-pandemic levels. The largest decline in business activity was in tourism, where the 12,867 active businesses remained 1.9 per cent lower than in January 2020.
“It will be important to help industries still facing challenges through skills training for displaced workers and business support,” noted Mathison. “Another sign of investment recovery is that the number of housing starts reached a new record in 2021, largely driven by rising prices and demand.”
In 2021, 43,360 housing units began construction in B.C., slightly above the previous high set in 2019 and 24.3 per cent more than in 2020. Attached units, such as condos, apartments, and townhomes, accounted for nearly four-fifths (78.4%) of all units started in 2021.
B.C.’s inventory of major projects increased to $394.3 billion in Q3 2021, up 6.4 per cent compared to Q3 2020. The two largest projects started in 2021 were the Lougheed Town Centre Redevelopment ($7.0 billion) and Broadway Subway Project ($2.8 billion), while the LNG Canada Facility ($36.0 billion) continued to be the largest project underway.
“These investments will increase housing supply and boost our economic outlook by providing greater access to natural resources, improved education facilities, and by connecting our communities,” continued Mathison. “However, the pandemic’s impact on some investment trends is still evident, including on private non-residential investment, GDP, and government debt.”
Private non-residential investment – which includes maintenance, upgrades, and construction – decreased to $4.4 billion in 2021, compared to $7.0 billion in 2019 and $5.0 billion in 2020.
Inflation-adjusted GDP per person was forecasted to reach $53,623 in 2021, below the $53,983 set in 2019. While it is expected to exceed pre-pandemic levels in 2022, the impact of the 2020 recession will permanently reduce the GDP outlook.
B.C.’s Budget 2022 tabled last week also showed that provincial net debt-to-GDP has continued to increase, forecasted to reach 22.8% in 2024-25 compared to 17.8% in 2021-22.
“While investment activity has increased considerably over the past year and a half, challenges remain,” concluded Mathison. “Given the sustained decline in private non-residential investment, it will be important to target policies that encourage and attract business investment to help boost our productivity and incomes. It will also be important to create a plan to return to balanced budgets and control debt, particularly as the Bank of Canada has begun to increase interest rates.”
To learn more, visit the BC Check-Up page.