As leaders from government, industry and First Nations gather in Prince George for the 14th annual Natural Resources Forum, it’s worth taking a fresh look at the important role natural resources play in B.C.’s economy, today and in the future.
1. B.C.’s natural resources are diverse, and effective stewardship means they’ll continue to support sustainable jobs, businesses and communities for decades to come.
While the recent downturn in some commodity markets has been challenging for a number of resource-reliant regions in the province, the outlook for 2017-18 is brighter: Prices are forecast to rise for lumber, natural gas, coal, aluminum, copper, zinc and others, in some cases on the heels of sizable price gains last year.
The main worry is around the impact of the long-running, Canada-U.S. softwood lumber trade dispute on the B.C. wood-products industry.
2. B.C.’s natural resource sectors dominate the province’s export base, adding to our prosperity and quality of life.
How do natural resource exports improve British Columbians’ quality of life? Exports provide basic income for B.C. firms, suppliers and workers, enabling them to buy and pay for imported goods and services in the form of business inputs, as well as a wide array of consumer products.
Resource goods make up about 75 per cent of B.C.’s merchandise exports.
Despite the lingering effects of the earlier commodity downturn, but aided by the competitive Canadian dollar, B.C.’s natural resource exports grew by over 10 per cent in 2016, led by wood products, agricultural products, metallurgical coal and some minerals. The export outlook for 2017-18 remains promising for most resource sectors.
3. B.C.’s natural resource sectors are reshaping relationships with First Nations, creating new partnerships and fashioning innovative models for engagement.
In recent years cross-sector initiatives have been undertaken between First Nations (often through economic development corporations) and existing non-aboriginal operators on the land, involving resource-management protocols, revenue-sharing and equity agreements, regulatory innovations and new stewardship models. These approaches to natural resource development support mutual goals: economically and socially sustainable revenue flows for all rights-holders and investors, with environmental protection at the core of project development.
The path we have walked together led to an unprecedented Memorandum of Understanding concluded in September 2016 between the B.C. Assembly of First Nations and the Business Council of B.C. At the core of this unique agreement is a commitment to pursue economic reconciliation, with the goal of eliminating over time the health, education and job-market gaps that many First Nations face, while bringing greater certainty to investors and operators.
The net result should be increased opportunities for First Nations to be full participants in the economic future of the province.
4. B.C.’s natural resource sectors are heavy users of technology and professional and technical services supplied by local firms.
The businesses that develop and produce B.C.’s natural resources have service and supply-chain relationships with many other local industries all across B.C. These suppliers include materials and equipment companies, processing and transportation providers, environmental consultancies, law and accounting firms, and financial advisers.
Beyond this, the competitiveness and long-term sustainability of B.C.’s resource sectors are assured by adopting advanced technologies into processes and production methods. At the business council we believe our natural resource sectors can build a deeper relationship with local technology firms and entrepreneurs to reduce or eliminate adverse environmental effects from industrial activity, to partner in research and development, and to generate innovations that solve problems and improve productivity and competitiveness.
For example, B.C. technology firms have pioneered methods to turn waste into usable products, to capture methane and carbon emissions, and to clean waste water so it can then be reused.
While not often visible to Lower Mainland residents, the natural resource sectors in B.C. sit at the heart of the provincial economy, fostering related manufacturing, supply, service and technology businesses, and directly supporting tens of thousands of skilled jobs as well as B.C.’s major ports.
A recent study by Resource Works illustrates the multiplier effect of natural resources on the broader B.C. economy: If the output in the resource sectors was to grow by 10 per cent, B.C.’s gross domestic product (GDP) would climb by 1.9 per cent ($3.7 billion — about the value of the province’s economic expansion in 2012). Of interest, more than half of the additional jobs generated by a 10-per-cent increase in resource industries’ collective GDP would be in Metro Vancouver, mainly in service industries that sell to natural resource companies.
As we begin 2017, B.C. is well-positioned to capitalize on the strength, expertise and diversity of our natural resource sectors, to return economic and social benefits to communities around the province and to First Nations partners, and above all, to do so while assuring the long-term sustainability of our environment.
Greg D’Avignon is president and CEO of the Business Council of B.C. and Karen Graham is policy consultant to the council.