REGIONAL CHECK-UP 2017

Transcription

1 REGIONAL CHECK-UP 2017 Kootenay Development Region CPABC An Economic Regional Analysis Check-Up for the 2016 Region bccheckup.com 1

2 Nechako Kootenay Development Region (KDR) HIGHLIGHTS FORECAST Favourable weather conditions Population: KDR s new residents are mostly from Alberta 149,263 and other provinces +? = Increasing tourism activity residents or+0.2% Recovering mining activity Tariff on softwood lumber Uncertain global trade climate Kootenay Cautious optimism for economy WORK Unemployment: 8.0% > 6.0% KDR BC Job Losses: -1,600 Employment reached a 12-year low of 67,400 jobs Youth Unemployment: 18.6% > 8.7% KDR Highest in BC BC Industries with the Most Job Losses: #3 #1 #2 Trade (-3,600) Construction (-1,300) Finance, Insurance, Real Estate & Leasing (-700) INVEST Major projects data is based on Q /- are in comparison to Q data. Value of Major Projects: -4.6% to $9.1 billion Business Bankruptcies: Under ~2/5 ~1/3 +2 to 2 construction on hold reports LIVE Educational Attainment: 67.7% of labour force has a post-secondary certificate/diploma or higher (-1.4 ppt) #3 after Mainland/Southwest and Vancouver Island/Coast for educational attainment Consumer Insolvencies: Personal Bankruptcies: 1.5 per 1,000 adults or -16.7% Consumer Proposals: 1.2 per 1,000 adults or 0.0% bccheckup.com Source:. All numbers are from Increases/decreases are in comparison to 2015 data.

3 Executive Summary BC s economy expanded once again in 2016, fuelled by an increase in consumer spending, robust housing demand, and growth in exports. Renewed demand from the US and a weaker Canadian dollar drove an increase in the value of BC s exports. Softwood lumber remained the leading commodity, with about two-thirds of production destined for the US. Other top exports were coal, aluminum, and natural gas. A weakened Canadian dollar also led to a large increase of international visitors to BC in In the Kootenay Development Region (Kootenays), the resource sector was a solid contributor to the economy in 2016 due to a sharp rebound in global steelmaking coal prices and improved forestry sector demand. The East Kootenay coal mines, which account for most of Canada s coal production and exports, had a strong year and softwood lumber production increased in the Southern Interior. The tourism sector was also vibrant, with many Kootenay communities benefiting from increased cross-border visits. Despite strength in its resource and tourism sectors, the Kootenay Development Region was a challenging place to live, work, and invest for some in The Kootenays labour market deteriorated, as employment declined in both the goods and services sectors. The retail trade and construction industries were the hardest hit. Overall employment declined by 2.3%, which was the second-highest rate of job loss in BC and drove total employment to a 12-year low of 67,400. Consequently, the Kootenays unemployment rate rose for the third consecutive year to reach 8.0%, which was 2.0 percentage points (ppt) above the provincial average. The job market for the Kootenays young workers was even more depressing as employment opportunities dried up. The youth unemployment rate jumped by 4.1 ppt to an alarming 18.6%, the largest one-year increase in BC and the highest regional youth unemployment rate in more than a decade. Also of concern is last year s 1.4 ppt decline in the educational attainment rate of the Kootenays labour force. Investment indicators are negative as well. The value of major projects under construction declined by $148 million between the third quarters of 2015 and 2016, and the business climate deteriorated slightly as two businesses declared bankruptcy, following no reported business failures in The only positive indicator in 2016 was the consumer insolvency rate. Although the Kootenays labour market downturn reduced disposable income for some individuals, the region achieved the best one-year performance in BC as the insolvency rate declined by 12.9% to 2.7 per 1,000 adults. Initial indications suggest a better year for the Kootenays in Teck, which produces steelmaking coal and other materials, predicts coal production will be close to volumes achieved in 2016, and permits have been approved to begin mining in new areas to extend mine life and allow increased production if 1 Teck Resources Limited, Teck Reports Unaudited Fourth Quarter Results for 2016, news release, February 15, bccheckup.com 3

4 desired. 1 Several major projects are scheduled to begin construction in 2017, the largest of which is a $370 million open pit coal mine near Sparwood. A weak Canadian dollar and high snowfalls created peak conditions for the Kootenays ski resorts and generated a significant boost to the tourism industry in early With no big improvement expected in the Canadian currency this year, Canadian residents will likely remain north of the border, while visitors, especially those from the US, will continue to take advantage of the currency exchange and enjoy the Kootenays tourism amenities. One area of concern is uncertainty in the forestry industry due to the absence of a new softwood lumber agreement with the US. The recently announced tariff on Canadian softwood exports and other trade barriers that may be erected during negotiations are definite threats to the industry. Given the weaker Canadian dollar and the expectation that new home construction in the US will rise steadily over the next two years, 2 BC s position as a key US lumber supplier is expected to remain intact. However, smaller Kootenay forestry companies, which export almost exclusively to the US market, are clearly most at risk as they may not have sufficient financial resources to sustain them over the course of the dispute. Labour market statistics for the first quarter of 2017 show an improvement already. The number of people employed increased by 11.1% from the 2016 annual average, and the unemployment rate declined by 1.6 ppt to 6.4%. 3 Industries that created the most jobs from January to March were accommodation and food services, trade, forestry, mining, and manufacturing. 4 2 TD Economics, Provincial Economic Forecast, March 27, Statistics Canada, Labour force survey estimates (LFS), by provinces and economic regions based on 2011 Census boundaries, 3-month moving average, unadjusted for seasonality, monthly, CANSIM Table Statistics Canada, Labour force survey estimates (LFS), employment by economic region based on 2011 Census boundaries and North American Industry Classification System (NAICS), 3-month moving average, unadjusted for seasonality, monthly, CANSIM Table

5 Table of Contents Executive Summary...3 Introduction...6 WORK Indicators...9 Job Creation...9 Unemployment Rate...12 INVEST Indicators...13 Business and Investment Activity...13 Bankruptcies...14 LIVE Indicators...16 Educational Attainment...16 Consumer Insolvencies

6 Much of the Kootenays population growth since 2013 has been due to an influx of interprovincial migrants, mostly job seekers from Alberta. In 2016, the Kootenays population grew by 0.2%, compared to a 1.2% increase at the provincial level. BC s GDP grew by 3.3% in 2016, well ahead of the Kootenay The Kootenay Development Region (Kootenays) is situated in southeastern British Columbia and includes the East Kootenay, Central Kootenay, and Kootenay-Boundary regional districts. With a total land area of 57,721 km 2, the Kootenay Development Region comprises 6.3% of BC. The region is one of the province s smaller population hubs, and was home to 149,263 residents in The Kootenays has seen a steady inflow of new residents since The Regional District of East Kootenay experienced the most population growth during this period, while population in the Regional District of Central Kootenay expanded to a lesser degree. In contrast, there was a net loss of residents in the Regional District of Kootenay Boundary. Canadian average for the sixth consecutive year. 5,6 Strong retail sales, robust housing demand, and an increase in exports drove provincial economic growth. The value of BC s exports rose by 9.9% or $3.5 billion in 2016, mainly due to renewed demand from the US and a weaker Canadian dollar. Softwood lumber remained the leading export, with about two-thirds destined for the US. 7,8 Other top-valued export commodities were coal, aluminum, and natural gas. 9 BC s economic strength in 2016 generated the province s highest rate of employment growth in more than a decade was a solid year for the Kootenays resource sector due to an improvement in some commodity markets. The Kootenays economy has always been, and continues to be, sensitive to global commodity price trends. In the Regional District of East Kootenay, coal, pulp, and lumber are the key resource products, while in the Regional District of Central Kootenay lumber and pulp dominate. Zinc and lead smelting and refining, and lumber, pulp, and wood products manufacturing drive the economy of the Regional District of Kootenay Boundary. 5 Estimate, TD Bank Economics, Provincial Economic Forecast, March 27, RBC Economics, Provincial Outlook, December BC Stats, Annual BC Origin Exports, March BC Stats, Exports, Issue 16-12, released February 7, BC Stats, Annual BC Origin Exports, March Statistics Canada, Labour force survey estimates (LFS), employment by economic region based on 2011 Census boundaries and North American Industry Classification System (NAICS), annual, CANSIM Table

7 A sharp rebound in steelmaking coal prices in late 2016 paved the way for an excellent year in the East Kootenay coal mines, which account for most of Canada s coal production and exports. 11 To help weather the downturn in the global coal market that closed mines in the Northeast Development Region in 2014 and 2015, the East Kootenay coal mines implemented a cost-reduction strategy. 12 This prudence paid off and effectively positioned the Kootenay mines to take advantage of improved prices in 2016, with mine production rising by 9.1% and revenue jumping by 36%. 13 The Kootenays other significant resource industry, forestry, also exhibited strength in Last year s increase in demand for softwood lumber by the US helped to boost lumber production in BC s Southern Interior Forest Region by 3.5%. 14 BC s tourism industry enjoyed a strong year in 2016, with traveller entries up 11% over Room revenue statistics for the first seven months of 2016 indicate that the Kootenays followed the same trend. 16 The region has seen an increase in US visitors during the last few years due to the weak Canadian dollar, but Canadian tourists, predominantly Albertans, are also regulars. The Kootenay Development Region offers numerous year-round tourism activities, that include downhill and Nordic skiing, golf, backcountry hiking, biking, snowmobiling, and camping. Despite strength in the resource and tourism sectors, the Kootenays labour market faded in 2016, with job losses spanning both the goods and services sectors. 11 F. Katay, British Columbia Ministry of Energy and Mines, Exploration and Mining in the Southeast Region, Provincial Overview of Exploration and Mining in British Columbia, Teck Resources Limited, Teck Reports Unaudited Fourth Quarter Results for 2016, news release, February 15, Teck Resources Limited, website, Note: There is one coal operation in Alberta that accounts for a portion of reported production and revenue. 14 Statistics Canada, Lumber production, shipments and stocks, by Canada and provinces, monthly, CANSIM Table BC Stats, Tourism Indicators, March Note: Traveller entries to Canada via BC. 16 BC Stats, Room Revenue Statistics, September bccheckup.com 7

8 Comparison between Development Regions DEMOGRAPHICS 90% of BC s residents live in Mainland/Southwest, Vancouver Island/Coast, and Thompson-Okanagan Population in BC: 4,751,612 residents or +1.2% Mainland/Southwest (+1.6%) Vancouver Island/Coast (+1.3%) Thompson-Okanagan (+0.7%) Northeast (+0.3%) Kootenay (+0.2%) Cariboo (-0.8%) Northwest BC* (-1.3%) FORECAST Uncertainty over commodity prices Potential international trade policy changes Slower housing market + + = Cautious optimism for BC s economy in 2017 WORK ~ 94% of new jobs created in Mainland/Southwest Unemployment in BC: New Jobs in BC: +73,300 Greatest job increase in at least 10 years -0.2% to 6.0% Youth Unemployment in BC: -1.2% to 8.7% Youth unemployment is highest in Kootenay, Northwest BC, and Northeast, due to job cuts Total Jobs in BC: 2.3 million Mainland/ Southwest 64.6% Other 9.5% 10.4% 15.4% Thompson- Okanagan Vancouver Island/Coast Unemployment Rate across BC: Change Northeast 5.9% 9.7% +3.8% Kootenay 7.4% 8.0% +0.6% Thompson-Okanagan 6.4% 7.8% +1.4% Northwest BC* 7.0% 7.7% +0.7% Cariboo 7.0% 7.4% +0.4% Vancouver Island/Coast 6.3% 5.8% -0.5% Mainland/Southwest 6.0% 5.5% -0.5% BC 6.2% 6.0% -0.2% *Northwest BC is made up of the Nechako and North Coast development regions. Source:. All numbers are from Increases/decreases are in comparison to 2015 data. 8

9 WORK Indicators Job Creation On the heels of a mild recovery in 2015, the Kootenays labour market weakened in The loss of 1,600 jobs, a decline of 2.3%, drove the overall employment level to a 12-year low of 67, While job losses occurred in both the Kootenays goods and services sectors in 2016, it was the service sector that suffered the brunt of the damage. A loss of 1,500 jobs reduced employment in services to 45,300, in contrast to the peak of 55,400 jobs reached just three years prior. In 2016, five Kootenay service industries reported employment declines, with most falling to five-year employment lows and many experiencing a second or third consecutive year of job loss. The trade industry incurred the greatest job losses in A sharp contraction of 32%, or 3,600 fewer positions, dwindled the industry s workforce down to 7,700. This was contrary to the trend at the provincial level where retail sales grew by 6.4%, prompting a 5% expansion in BC s trade employment. 18 Much of last year s decline in the Kootenays trade industry was at the retail level in the latter half of 2016, with employment hitting a low in October. 19 Job losses in ambulatory and health care services and nursing and residential care facilities resulted in 800 fewer jobs in the health care and social assistance industry. An employment decline of a similar magnitude was seen in the finance, insurance, real estate and leasing industry, where a loss of 700 jobs was reported. Employment in the Kootenays educational services industry continued its downward slide in 2016, with the loss of 500 jobs added to the 700 lost in The region s other educational service providers, which include a range of private instruction and training services and post-secondary institutions, accounted for last year s employment decline. 20 The loss of 500 jobs in accommodation and food services reduced employment in this industry to its lowest level in more than a decade. By the fourth quarter of 2016, however, employment began to rise as new workers were hired. 21 Last year s job loss occurred in food services and drinking places, while the number of jobs with the region s accommodation providers expanded due to an increase in visitors. Industries such as retail trade, and food services and drinking places are sensitive to changes in income levels and economic conditions. A decline in discretionary spending due to higher unemployment likely reduced demand for some services, triggering layoffs in these industries. 17 Statistics Canada, Labour force survey estimates (LFS), employment by economic region based on 2011 Census boundaries and North American Industry Classification System (NAICS), annual, CANSIM Table BC Stats, Issue 17-35, Infoline Blog, February 22, Statistics Canada, Labour force survey estimates (LFS), employment by economic region based on 2011 Census boundaries and North American Industry Classification System (NAICS), 3-month moving average, unadjusted for seasonality, monthly, CANSIM Table Ibid. 21 Ibid. bccheckup.com 9

10 On the positive side, several service sector industries reported notable gains in After languishing for two years, business, building and other support services reversed course, posting a net gain of 1,400 jobs. Much of this improvement was due to job creation in management and administrative specialized support services to Kootenay businesses. The public administration industry, which includes infrastructure development and maintenance and government administrative services, created 900 new positions, bringing industry employment to its highest level since Other significant job creation was reported in the information, culture and recreation industry, which saw an increase of 700 jobs, and the professional, scientific and technical services industry, which expanded by 600 workers. Employment in the Kootenays goods sector dipped marginally in 2016, reaching 22,100 due to a net loss of 200 jobs. Some substantial shifts took place within the sector, however, in response to changes in the local, national, and global economies. Construction industry employment tumbled by 1,300 jobs in 2016 in the wake of a solid year in While the value of building permits increased by $17.6 million in 2016, this was offset by a decline of $148 million in the value of major projects under construction as several projects wrapped up. 22,23 Furthermore, Alberta s sluggish economy prompted construction delays in that province, putting some migrant Kootenay trades workers out of work. The creation of 700 new jobs in both the forestry, fishing, mining, oil and gas, and manufacturing industries offset part of the contraction in construction. Employment in forestry, fishing, mining, oil and gas ramped up to its highest level in over a decade, due to a dramatic increase in mining employment. Coal production was up in the region s mines in 2016, and mining exploration continued in Southeast BC. Monthly labour market statistics show that employment in this industry built momentum through the latter part of the year. 24 In 2016, manufacturing industry employment reached its highest level in the past five years. Most of the gains were generated by the Kootenays wood products manufacturing operations, 25 driven by renewed softwood lumber demand from the US. At the provincial level, 73,300 new jobs were created in 2016, an increase of 3.2%, thanks to net employment gains in the Mainland/Southwest and Vancouver Island/ Coast development regions. BC s remaining regions experienced overall job losses. The Kootenays recorded the second-highest rate of job loss in 2016, after the Northeast Development Region. See our summary infographic for regional comparisons. 22 BC Stats, British Columbia Building Permits for Development Regions and Regional Districts, by Type , February 7, BC Ministry of Finance, Major Projects Inventory, September Statistics Canada, Labour force survey estimates (LFS), employment by economic region based on 2011 Census boundaries and North American Industry Classification System (NAICS), 3-month moving average, unadjusted for seasonality, monthly, CANSIM Table Data for paper, primary manufacturing, and other large manufacturing sub-industries in the Kootenays is suppressed so it is not known how they fared in

11 Table 1-1: Employment, Kootenay Development Region, 2011 to Job Creation (000) 5-Year TOTAL EMPLOYMENT (000) Year Goods-Producing Sector (000) Agriculture x x 1.6 x x x n/a n/a Forestry, fishing, mining, oil and gas Utilities x x x x x x n/a n/a Construction Manufacturing Services-Producing Sector (000) Trade Transportation & warehousing Finance, insurance, real estate & leasing Professional, scientific & technical services Business, building & other support services Educational services Health care & social assistance Information, culture & recreation Accommodation & food services Other services Public administration Source: Statistics Canada, Labour Force Survey Historical Review. 26 Industries with an x are estimated to have less than 1,500 employed at that particular point in time; as a result the numbers presented in the table may not add up to total sector figures, and job creation statistics cannot be calculated. bccheckup.com 11

12 Unemployment Rate The unemployment rate measures the share of the labour force that is unemployed and actively seeking employment. The Kootenays unemployment rate rose for the third consecutive year in 2016, by 0.6 percentage points (ppt) to reach 8.0%. An increase in the number of unemployed individuals combined with a reduced number of employment opportunities contributed to last year s deterioration. The Kootenays unemployment rate now sits 2.0 ppt above the BC average, a disparity that has not been seen in at least a decade. Despite 2016 s increased unemployment rate, the Kootenays bettered its regional ranking from 2015 by one place, to second-last position. This was due to a substantial increase of 3.8 ppt in the Northeast Development Region s unemployment rate. See our summary infographic for regional comparisons. Table 1-2: Unemployment Rate, Kootenay Development Region, 2011 to 2016 Region Percentage Point (ppt) Change 5-Year Year Kootenay ppt +0.6 ppt British Columbia ppt -0.2 ppt Source: Statistics Canada, Labour Force Survey, CANSIM Table Conditions in the Kootenays labour market for young workers were even more depressing in 2016, with youth unemployment jumping by 4.1 ppt to an alarming 18.6%. This marked the highest regional youth unemployment rate in more than a decade. A contraction of the youth labour force and an increase in the number of unemployed young people due to fewer employment opportunities both contributed to this unfortunate development. The Kootenays youth unemployment rate is now more than double the provincial average of 8.7%, cementing the region s last-place ranking. In contrast, the Kootenays boasted the lowest rate of youth unemployment in BC just two years ago, in See our summary infographic for regional comparisons. Table 1-3: Youth (Aged 19 to 24 Years) Unemployment Rate, Kootenay Development Region, 2011 to 2016 Region Percentage Point (ppt) Change 5-Year Year Kootenay ppt +4.1 ppt British Columbia ppt -1.2 ppt Source: Statistics Canada, Labour Force Survey, Custom Table 12

13 INVEST Indicators Business and Investment Activity Capital investment in industrial, commercial, and institutional infrastructure plays an important role in the economy. It boosts job creation, long-term labour productivity, and economic growth. Depressed oil prices and global uncertainty suppressed Canada s capital investment in In BC, overall investment in non-residential construction declined by 1.9% to $1.4 billion due to lower spending on institutional, governmental, and industrial projects. 27 Commercial building investment, however, increased. BC s Major Project Inventory reveals that overall capital investment in the province declined in Between the third quarter (Q3) of 2015 and Q3 2016, the estimated value of BC s capital investment projects in the proposal phase, under construction, completed, and on hold declined by 2.7% to $437.7 billion. 28 The Kootenays followed the same trend, with the total value of capital investment shrinking by $444 million, or 4.6%, from $9.6 billion in Q to $9.1 billion in Q Major project investment in the region has, in fact, been shrinking since September As of September 2016, there were 28 projects listed in the Kootenays inventory of major projects, a decline of two from the previous September. Six projects with a total estimated value of $2.3 billion were in the proposal stage, 15 estimated at $3.6 billion were under construction, and seven projects worth $3.2 billion were on hold. Between the third quarters of 2015 and 2016, the value of major projects proposed for the Kootenays declined by $451 million. Three valued at $470 million in total were moved from proposed to hold status, a result of challenging market conditions or insufficient financing. Selkirk College s $19 million Silver King Campus trades facility renewal in Nelson was added to the roster of projects proposed for the region. The Silver King project is scheduled to begin construction in 2017, along with NWP Coal Canada s $370 million Crown Mountain Coking Coal Project. Last year s rebound in global coal prices saw expansion plans for the coal industry moving forward, with several proposed projects reaching the pre-application stage of environmental assessment and one receiving conditional approval. 30 Between Q and Q3 2016, the value of the Kootenays major projects under construction declined by $148 million. Three projects were completed during this period a $123 million upgrade to the spillway gates at Hugh Keenleyside Dam in Castlegar, $50 million worth of improvements at the Elko Sawmill, and $20 million in upgrades at the East Kootenay Regional Hospital in Cranbrook. Only one project started construction in 2016, the $25 million upgrade and feeder addition to the Fernie Substation, which is anticipated to wrap up in early Statistics Canada, Investment in non-residential building construction, by type of building, province and Census Metropolitan Area, quarterly, CANSIM Table , February 16, Preliminary estimate. Q to Q Excludes engineering construction (such as for highways, sewers, bridges, and oil and gas pipelines). 28 BC Ministry of Finance, Major Projects Inventory, September BC Ministry of Finance, Major Projects Inventory, September 2015 and September F. Katay, British Columbia Ministry of Energy and Mines, Exploration and Mining in the Southeast Region, Provincial Overview of Exploration and Mining in British Columbia, bccheckup.com 13

14 Nearly half of the value of projects currently under construction in the Kootenays is due to six large tourism/recreation projects, including a ski resort expansion and golf course development, worth $2.6 billion. These are long-term projects that have been under construction for one to two decades. As such, it is difficult to gauge how much construction activity actually occurs on these developments from year to year. The Kootenays inventory of projects on hold relates to mining, accommodation, recreation, and utilities. Approval, financing, or the right market conditions may allow some of these deferred projects to move ahead in the future. Between September 2015 and 2016, the value of projects on hold increased by $155 million. Bankruptcies The trend in business bankruptcies is an indicator of a region s business climate. Low profitability in difficult economic times is the most common reason that businesses fail. After reporting no business failures for the first time in 2015, the Kootenays experienced a slight deterioration in the business climate in 2016, as two businesses declared bankruptcy. 31 This is not surprising given the slump in many of the region s service sector industries last year. The Kootenays long-term bankruptcy trend, however, is positive. During the past five years, business bankruptcies declined by five reports, and the number of business bankruptcies in 2016 was one of the lowest in the past decade. 32 At the provincial level, business bankruptcies declined by 3.2% in 2016, from 154 to 149 reports. This is the lowest level in the past five years and represents a 22.4% reduction from Aside from the Kootenays, three other regions in BC reported an increase in business bankruptcies in 2016 the Thompson-Okanagan, Nechako, and Northeast development regions. See our summary infographic for regional comparisons. Table 1-4: Business Bankruptcies, Kootenay Development Region, 2011 to Year Change Kootenay Year British Columbia % -3.2% Source: Office of the Superintendent of Bankruptcy Canada. 31 In BC s smaller development regions, the absolute changes in business bankruptcies are very small. Comparing them in percentage terms does not provide meaningful results. 32 Changes in 2009 to the federal Bankruptcy and Insolvency Act made proposals a more appealing insolvency choice to bankruptcy. This decreased the number of bankruptcies in BC and across Canada in subsequent years. 14

15 Comparison between Development Regions INVEST Business Bankruptcies in BC: 341 major projects valued at $76.6 billion are currently under construction (or -3.7%) -3.2% to 149 reports Value of all major projects in BC: -2.7% to $437.6 billion Thompson-Okanagan saw the highest increase in business bankruptcy reports Note: Major projects data isbased on Q /- are in comparison to Q data. LIVE Consumer Insolvencies in BC: Educational Attainment in BC: Personal Bankruptcies: 1.2 per 1,000 adults or -20.0% 69.4% of BC s labour force has a post-secondary degree certificate/diploma, or higher (-0.8 ppt) # 1 # 2 # 3 # 4 # 5 # 6 # 7 Mainland/Southwest (71.4%) Vancouver Island/Coast (69.7%) Kootenay (67.7%) Thompson-Okanagan (63.8%) Northwest BC* (62.9%) Cariboo (59.6%) Northeast (53.8%) Consumer Proposals: 1.6 per 1,000 adults or +6.7% The Northeast saw the largest increase in the number of consumer insolvencies *Northwest BC is made up of the Nechako and North Coast development regions. Source:. All numbers are from Increases/decreases are in comparison to 2015 data. bccheckup.com 15

16 LIVE Indicators Educational Attainment Obtaining a post-secondary or specialized education is an important step to becoming employable, and is regarded by many as essential to attaining a good quality of life. At today s high rate of technological growth, many workers are required to obtain a post-secondary education before entering the labour market and to continuously upgrade their skills throughout their careers. The BC government predicts that more than threequarters of projected job openings will require some type of post-secondary education by This will be discussed further in our BC Check-Up focus piece later in The Kootenays overall five-year trend in educational attainment is positive. Since 2011, the percentage of the labour force aged 25 to 54 with a post-secondary education increased by 4.2 ppt. A decline of 1.4 ppt in 2016, however, reduced the Kootenays attainment rate to 67.7%, partially offsetting the progress made in the past few years. The decline was due to an increase in the labour force of individuals without post-secondary credentials and fewer people with a post-secondary certificate or diploma. Although the Kootenays decline in educational attainment in 2016 widened the gap with the provincial average, the region maintained its third-place ranking amongst BC s development regions. The Mainland/ Southwest and Vancouver Island/Coast were the top-ranked development regions, at 71.4% and 69.7% respectively. At 53.8%, the Northeast Development Region had the lowest educational attainment rate in the province. See our summary infographic for regional comparisons. Table 1-5: Percent of Labour Force Aged 25 to 54 with a Post-Secondary Certificate/Diploma or Higher, Kootenay Development Region, 2011 to 2016 Region Percentage Point (ppt) Change 5-Year Year Kootenay 63.5% 57.3% 57.6% 69.0% 69.1% 67.7% +4.2 ppt -1.4 ppt British Columbia 65.9% 66.5% 67.9% 68.1% 70.2% 69.4% +3.5 ppt -0.8 ppt Source: Statistics Canada, Labour Force Survey, Custom Table. 33 Province of BC, British Columbia 2025 Labour Market Outlook, July

17 Consumer Insolvencies The consumer insolvency rate represents the number of personal insolvencies per 1,000 adults (aged 18 and over). An insolvent individual has two options: submit a proposal to creditors to renegotiate their payment conditions and reduce their debt load, or declare bankruptcy. A proposal is often the preferred option for people with assets or for those who earn an income. Over the past five years, the Kootenays consumer insolvency rate has varied, peaking at 3.3 insolvencies per 1,000 adults in 2012 and 2013, and subsequently declining. In 2016, the Kootenays insolvency rate declined by 12.9% to 2.7 per 1,000 adults. This was the best one-year performance in BC last year, and was due to a decrease in bankruptcies. The proposal rate was unchanged. These results are counterintuitive to the overall job loss and rising unemployment the Kootenays experienced in A significant increase of 15% in Employment Insurance beneficiaries points to many displaced workers taking advantage of the social safety net in an effort to ward off insolvency. 34 In addition, the economy began to show signs of a recovery in late 2016, creating new jobs for displaced workers, which also minimized the risk of insolvency for some individuals. In BC, the consumer insolvency rate declined by 6.7%, reflecting fewer insolvencies in the southern development regions. While the northern and central regions of the province reported increases in this indicator in 2016, the North Coast and Nechako development regions achieved the lowest insolvency rates in BC. The Kootenays ranked fourth lowest. See our summary infographic for regional comparisons. Table 1-6: Annual Consumer Insolvency Rate per 1,000 Adults (Aged 18 Years and Older), Kootenay Development Region, 2011 to 2016 Rate Percentage Change 5-Year Year Insolvency % -12.9% Kootenay Bankruptcy % -16.7% Proposal % 0.0% BC Insolvency % -6.7% Source: Office of the Superintendent of Bankruptcy Canada and Statistics Canada3 34 Statistics Canada, Employment Insurance program (EI), beneficiaries by province, census division, total and regular income benefits, declared earnings, sex and age, unadjusted for seasonality, monthly, CANSIM Table bccheckup.com 17

18 CPABC Regional Check-Up Kootenay As leaders in analyzing and validating information, CPAs are often called upon to provide independent, fair, and objective information to assist in decision-making. It s with this goal in mind that the Chartered Professional Accountants of British Columbia prepares the CPABC Regional Check-Up and BC Check- Up reports each year. It is our hope that the reports will make a positive public policy contribution to the province by stimulating debate and discussion about how to make BC a better place in which to live, work, and invest. The CPABC Regional Check-Up and BC Check-Up reports, as well as related information, are available online at bccheckup.com. Staff Kerri Wilcox, Vice President, External Affairs and Communications, CPABC Vivian Tse, Public Affairs Specialist, CPABC Economists Chisholm Consulting, in association with Gold Island Consulting. The Regional Check-Up Kootenay report is edited by Vivian Tse. Creative design was done by Linda Mitsui of Profile Design Group Inc. Opinions expressed in the CPABC Regional Check-Up Kootenay do not necessarily reflect those of individual chartered professional accountants. CPABC Regional Check-Up # West Hastings Street Vancouver, BC V6B 4N6 Tel: Fax: Toll free in BC: BC Check-Up, Chartered Professional Accountants of British Columbia 18