Canadians are becoming increasingly concerned about a looming recession.
In the wake of the financial crisis in 2009, it was clear that the Metro Vancouver region fared far better than other jurisdictions. This was at least partially attributed to a strong housing market in the region and strong regulations in banking across Canada.
But we should not assume we will automatically fare as well in 2023. The conditions are not the same as they were over ten years ago. To best position the Metro Vancouver region for any future economic downturn, we need to get clear on the resilient aspects of the fast-transitioning economy in order to bolster and safeguard them for the sake of all residents and industries.
At Invest Vancouver, part of what we do is to attract Foreign Direct Investment (FDI) in sectors that will increase the number of high quality, future-proofed jobs for Metro Vancouver residents.
In a report released by Invest Vancouver in collaboration with the UBC Sauder School of Business last month, we examined the downstream impacts of FDI in British Columbia in order to better understand the strengths and opportunities in more detail in a post-pandemic world.
The report found that foreign multinational enterprises account for more than 1 in 10 jobs province-wide, with the activity of foreign multinational enterprises representing nearly 12 per cent of the provincial GDP. The U.S., the U.K., Japan and France are ranked as the highest sources of multinational enterprise activity in this province – not to be confused with our largest trade partners.
Among the findings, there were two industries playing an increasingly significant role in the B.C. compared to the national average – one is seen as a challenge, the other as an opportunity.
Retail trade made up the largest category of jobs created by FDI in 2019. But while retail is a prominent sector, the pandemic revealed its vulnerability for many workers in the region. Wages in this industry fall below the national average, and workers are far more likely to be employed part-time or working more than one job at one time.
Separately, the report found that jobs in the professional, scientific and technical services sector are overrepresented in B.C. compared with Canada as a whole. That means a greater concentration of high quality jobs in the region such as engineering and computer services. Jobs which are more resilient to be in demand even in the face of economic downturn.
Statistics Canada routinely tracks the downstream impacts of FDI, though this report has for the first time presented a detailed breakdown of the data specific to British Columbia. The findings inform us on where to focus our investment attraction efforts to optimize prosperity for residents of the Metro Vancouver region.
In order to ensure our regional economy is resilient in the face of a looming recession, we need to invest in the key industries which we know to have a competitive capacity on a global stage. Within our nearly two years of existence, we’ve focused investment attraction efforts on sectors such as tech, cleantech, digital media and life sciences – industries where we see those regional advantages.
Our region is home to the world’s largest hydrogen and fuel cell industry, Canada’s largest life sciences institute, and one of North America’s fastest-growing digital media and entertainment hubs.
These industries can play a substantial role in the region’s future economy. But we need to ensure the policy is sound to allow for growth in these sectors, while removing barriers to employment in order to continue nurturing our talent pipelines. When we talk about FDI in this region, it’s imperative that we attract the right kind. In doing so, we increase the likelihood that our current and future residents will prosper in a highly dynamic, thriving economy less susceptible to strong downturns.
Jacquie Griffiths is president of Invest Vancouver.