Vancouver’s post-election economic engine needs attention

The most serious absence in the recent municipal campaign was a material discussion about how to attract and develop higher-paying jobs. It was as if there were no Vancouver economy to consider as part of the elected duty of service.

For politically expedient and attention-grabbing reasons, candidates looked at the most evident symptom of unaffordable Vancouver: our high housing prices. They ignored the more serious matter of our community’s shabby per capita income.

A city can do little on its own about the former, much about the latter.

The most recent data pegged Vancouver outside the top 10 in median Canadian household income: $65,327 in 2015, about $5,000 below the national average. It had not kept pace with provincial growth over the last decade, much less the country’s.

Under the last regime, municipal policy seemed to deny the existence of the resource sector, where many of the highest-paying jobs reside, mainly so as not to visibly dignify anything that might involve extraction or combustion. The mayor didn’t visit the Port of Vancouver for his first two terms, optics being what they may, and didn’t deign to speak at one of dozens of mining conferences in the city, even though we house dozens of head offices of that economic engine.

Instead we got and will likely continue to get a regular dose of the shiny new objects, including many prospective tech companies that all too often disappear or decline or a creative sector that is wonderful in principle but woefully underpaying in practice. Meantime, small businesses are shuttering or reeling under imbalanced local taxes.

If there is an economic strategy in the new mayor’s vision, or that of his council, it is well hidden.

Which brings me to the sense of relief we must have felt when we witnessed last week what New York and northern Virginia will fork out to bring Amazon’s next major offices, a kind of HQ2A and HQ2B, to Queens and Arlington.

The online behemoth staged a 238-city Canada-U.S. contest – Metro Vancouver was thankfully among the early cuts.

On the surface, Amazon appeared an attractive offer. But the stunt proved to be arguably the company’s best example of understanding consumer behaviour, something its recommendation engine might put as: “If you liked buying our products, you may like buying our presence.”

Communities trampled each other to proffer benefits to park what portends to be about 25,000 well-paying tech jobs and $25 billion in investment over the next decade. Some tax breaks and incentives dangled were obscene. The winning cities will saddle taxpayers with billions in expenses. Residents of losing bids can rightfully claim victory.

Research is overwhelming that tax incentives are inappropriate when luring businesses to town. They do not particularly change a community’s employment or income complexion. They bur-den taxpayers with additional debt. They only rarely influence the eventual decision.

It turns out that – surprise, surprise – location is the best asset any city has. And it helps to have infrastructure in place: transit systems, health care, good schools and recreation.

Of course, bestowing incentives to lure business is a politically popular thing to do – and not trying to bestow them is often highly unpopular. Still, America is getting schooled on how metropolitan lust has consequences. Cities and states now spend $90 billion annually to bring businesses their way. Wisconsin has walked into a nine-figure fiasco with its efforts to attract a Foxconn factory.

That being said, it isn’t as if cities ought to simply stand back and expect to win. In our case, the most significant thing we could have done over the last decade was to get our transit system shipshape, so that even if our Vancouver housing was pricey, workers would have access to the city on great transit lines.

We need to worry about what will fuel our economy if real estate is truly taking a time out, but without adequate infrastructure or enough high-paying jobs, our living costs will only feel more oppressive. •

Kirk LaPointe is the editor-in-chief of Business in Vancouver and vice-president, editorial, of Glacier Media.