Metro Vancouver has one of B.C.'s most diversified economies, almost every sector of which needs workers.
By 2020, the region needs to attract 666,250 people, of which close to 40% – or 259,430 – will be the result of expanding the Lower Mainland's economy.
But if the need is great, so are the challenges.
While other parts of the province face worker shortages or struggle to attract skilled workers to small communities without the allure of urban amenities, Vancouver faces the opposite predicament.
It ranks among the world's most livable cities, but its success depends on several external factors.While smaller communities need local industry to attract people and support growth, Vancouver enjoys the benefits of providing support services to smaller centres.
This, in turn, makes it vulnerable to the broader economic headwinds buffeting the economy as a whole.
While the downturn in a particular sector, such as mining or forestry, might hurt a single-industry town, Vancouver depends on macroeconomic fortunes – and the current outlook is far from certain.
"We're dependent on a lot of things in the overall economy," said Bryan Yu, an economist with Central 1 Credit Union in Vancouver, "what happens in the commodity sector and [its] impact on the localized economy, but we're also dependent on flows of immigration and population growth."
The global economic downturn has increased uncertainty and reduced the inflow of newcomers. Central 1 has reported "subdued in-migration" boosting the province's population by less than 1% annually for the foreseeable future.
Worse, much of the migration is made up of retirees from other parts of Canada.
By 2017, provincial projections show the demand for workers in the Mainland-Southwest development region outstripping supply by more than 11,000 annually.
You gotta be here
The warning isn't new.
While the 2010 Winter Olympics was touted as the province's welcome mat to the world – complete with the tag line "You gotta be here" – Conference Board of Canada economist Mario Lefebvre didn't mince words when he addressed the Downtown Vancouver Business Improvement Association on the first anniversary of the Games.
"The fundamental element that's in play here remains population," Lefebvre told his audience.
A resilient economy gives the region an edge in a business climate that's been challenging for centres elsewhere, but people are still needed to support the city's growth.
"True, Vancouver is a magnet to people around the world – [but there's] no place for complacency," Lefebvre said. "We're not the only country in the world that needs immigrants."
Lefebvre didn't mention housing affordability as one of the factors working against Vancouver, but the issue is top of mind for Lee Malleau, CEO of the Vancouver Economic Commission, the civic agency charged with strengthening the city's economy.
The city's housing is Canada's least affordable. According to the Canada Mortgage and Housing Corp., the average monthly costs for one- and two-bedroom apartments are $964 and $1,243, respectively.
Home ownership is equally hard on the pocketbook: RBC Economics reports that condo ownership requires 44.8% of the average household's monthly income, while a detached bungalow requires 86%.
"There's a definite relationship between the work that we do attracting new industry and new talent to Vancouver and ensuring that they not only have job space, which is a top priority, but they also have housing space," Malleau said.
Malleau added that some of the elements that distinguish Vancouver as a livable city work in its favour.
The success of the city's "living first" policy for the downtown peninsula makes it ideal for younger workers who want to be close to employment and entertainment opportunities.
Retaining families is a bigger challenge. Many move to other parts of the region for housing that fits their budgets.
And when their leases come up for renewal, companies move to where employees are.
Malleau believes this is where a regional approach to the jobs question is important.
"Businesses are going to where the talent is."
Or at least to where the transit infrastructure is.
Transit a key factor
While many companies take staff location into consideration when considering a move, many that opt to move choose a location along a SkyTrain line or a well-travelled transit corridor.
According to a Jones Lang LaSalle survey of Metro Vancouver office markets last year, office buildings within a half kilometre of rapid transit stations have an average vacancy rate of 4.8% compared with a market-wide rate of 12.3%.
While transit lines have made suburban locations appealing to some companies, Jon Bishop, vice-president and general manager of Devencore Co. Ltd., the Vancouver office of global tenant representation firm Newmark Frank Knight Devencore, said many companies still want a Vancouver address.
Lease rates at some properties have doubled, but Bishop said companies with a history of being downtown – particularly the professional firms servicing major international companies – aren't going anywhere.
McCarthy Tétrault's commitment to space in Bentall Kennedy LP's new tower at 745 Thurlow Street created an opportunity for KPMG to expand at 777 Dunsmuir Street, and a host of new office towers are providing further opportunities for tenants who want to be downtown.
"Your labour pool expects to be downtown," he said. "Ultimately, there's probably a greater impact moving out of downtown than to stay."
With 5.5 million square feet of office space now under development or planned for the city, including close to two million square feet downtown, businesses seem set to stay.
Whether workers find opportunities to do the same is another question, but it's one the city's 2011-21 housing strategy seeks to address.
"So long as there's global trade we'll continue to have a fairly strong sector," Malleau said. "The question for us is how do we continue to support the infrastructure those industries need?"
Growing companies, growing jobs
A parallel challenge Vancouver faces is ensuring companies are large enough to attract labour and afford the wages that match the local cost of living.
While the city makes much of the clusters of companies in the tech sector and offering professional services to resource companies, Vancouver Economic Commission CEO Lee Malleau said most Vancouver companies tend to be small to mid-sized entities.
"Our opportunity is to continue to grow those companies and support their growth and make sure they have every opportunity to stay rooted in Vancouver," Malleau said. "How do we keep our businesses at home comfortable, growing and creating that prosperity that supports other values that are important to us in our community, like social values and environmental values?"
The tech sector might have an answer.
An acute awareness of the need to grow local companies prompted the BC Technology Industry Association to launch the Centre4Growth in late 2010 to help expand local companies and, in turn, employment opportunities.
BCTIA figures indicated that of the province's 9,000 tech companies, just 3.5% have more than 50 people; the majority – approximately 70% – employ five people or fewer.
BCTIA president and CEO Bill Tam refers to the gap as "the absence of a middle class in tech."
Through a series of initiatives, particularly counselling initiatives that match promising companies with one of seven CEOs in residence, the Centre4Growth has helped participating tech companies add 140 positions and generate revenue growth and new investments totalling $29 million in its first 18 months of operation.
